[Editorial] What The Market and Investors Want From Hyundai

The behavior of the Hyundai Automotive Group ahead of the arrest of chairman Chung Mong Koo was, frankly, disappointing. It spread exaggerated talk about a crisis in management in an urgent attempt to save its chairman. It went beyond calls for the law to take circumstances into consideration and went on about how the company would be in a serious state of crisis without Chung. Which was quite unsightly, because by doing so it was advertising its own outdated management structure. A normal company should declare that it would continue operations without major hitches even without its chairman around.

When Chung was taken into custody, top executives met and announced that the group's subsidiaries would be made responsible for their own operations, without forming an emergency task force to oversee the group as a whole. Perhaps it would be far too much to expect Hyundai to immediately introduce entirely new methods of management. But they considered having someone act as something close to acting chairman, and that is enough to make you wonder if executives have no intention of ever graduating from the group's one-man rule. They are ignoring the lesson to be learned here, if the idea is to maintain a temporary system of management then return to the old ways when Chung is released.

If Hyundai Automotive wants to turn this its misfortune into an opportunity to better itself, it should take into consideration what the market, investors, and the public wants to see from it. That would also be a way to prevent the entire group from being thrown into a state of confusion again just because of one person. The market and investors want to see the group's management structure made transparent and have expertise and a sense of responsibility. Put simply, it has to stop being a company that exists for a single "emperor." That would have the additional benefit of helping it become a truly global company. It needs to think about why its shares and foreign investment are remaining stable despite Chung's arrest. Naturally investors are hoping to see real reform in how it is managed.

The Hankyoreh, 1 May 2006.

[Translations by Seoul Selection]