President Cho Hwan-eik of Korea Electric Power Corp. (KEPCO) is certain to be reelected for one more year for the second time after finishing his initial three-year term at a regular meeting of KEPCO’s board of directors slated for March 21.
When KEPCO President Cho took office in December 2012, the power company posted a poor business performance, chlaking up 11 trillion won in accumulative loses over five consecutive years.
If President Cho is reelected at the shareholder’s meeting, he will take the helm of the nation’s largest public entity until February 2018, becoming the longest-ever serving CEO of KEPCO with a term of five years and two months. Cho’s reelection is owed to his innovative leadership to overcome a crisis, industry analysts say.
In an effort to rescue KEPCO, which had been weighted down with snowballing debt standing at 11 trillion won, President Cho adopted the so-called S.O.S Management – summed up with such catchphrases as “Soft,” “Open” and “Speed” – to expedite organizational innovation and the restructuring of the businesses. His strategies paid off: KEPCO succeeded in turning the power company, fraught with hefty debt, around in one year.
KEPCO, which posted 3.2 trillion won in losses in 2012, turned a 200 billion won in the following year before logging its then best-ever business performance in 2015, an 11.3 trillion won in operating profit. The power company renewed the best-ever business performance with 12 trillion won in operating profit in 2016, surpassing the 10 trillion won barrier in operating profit for the second straight year.
KEPCO’s global standing has surged due to its charming business performances. A Forbes’s survey ranked KEPCO first in the power field, the first Asian company to top in the global power field. The power company saw its global ranking jump from 30th in 2012 before his inauguration, to 4th in 2015 and 1st in 2016. According to the Forbes’s survey, KEPCO saw its overall industry ranking surge from 580th in 2012 to 171th in 2015 and 97th last year, a jump of about 400 places since Cho’s inauguration.
The power company saw its debt ratio plunge from 135.8 percent in 2013 to 99.9 percent in 2015, gaining the credit rating of “AA” from the global credit companies Moody’s, S&P and Pitch.
On top of his capabilities to overcome a crisis, his site communication management leadership is extraordinary, observers say. Before taking office, KEPCO was struggling with power supply emergency woes, conflicts over the installation of a power transmission line in Milyang, and issues over the disposing of KEPCO’s headquarters site in Samseong-dong, Seoul.
Unlike previous CEOs who resigned in disgrace over disagreements over electricity charge hikes with the government, President Cho has managed to employ his skillful bargaining power to tackle such issues to raise electricity rates and overhaul the progressive electricity charging system. Cho himself toured the site in Milyang more than 33 times to persuade the residents and negotiate with them with a sincere attitude, leading to solutions. Cho demonstrated his own amicability as he managed to have KEPCO adopt a merit-based compensation system. KEPCO made a list of top-ranked companies in customer satisfaction for the 16th consecutive year last year.
Under his stewardship, KEPCO poured 6.9 trillion won last year into exploring and fostering new energy industries for the future of the Korean energy industry and KEPCO. The power company is developing such segments as new and renewable energies, energy storage systems (ESS) and advanced metering infrastructure (AMI).
KEPCO Asked to Tide over Challenges and Brace for Uncertainties
KEPCO President Cho Hwan-eik called for his workers to overcome challenges and brace for uncertainties in the months to come. In his speech at a ceremony to kick off the 2017 business year at the KEPCO headquarters in Naju, Jeollanam-do on Jan. 2, KEPCO President Cho said, “A climate change deal in Paris in 2015 declared the end of the fossil fuel era, but as Trump was elected as U.S. president, fossil fuels are exacerbating uncertainties. A failure to overcome changes could lead to gridlock or even extinction.” The company may be faced with different challenges and demands if and when the Korean government changes, he added. President Cho warned against “being complacent.”