센터소개

leader's column

Making Tough Choices as a CEO of a Global Business

Registered Date December 11, 2017 Read 488

Lately, I have been receiving an increasing number of requests from multinational companies (MNCs) doing business in Korea to lecture on the local business environment. In September alone, I have had the opportunity to address a sizeable audience at least once or twice a week including institutions such as the Korea-German Chamber of Commerce and Industry (KGCCI) and the Seoul Japan Club (SJC).

 

The most prevalent topic amongst the CEOs of MNCs these days is, not unexpectedly, the state of security on the Korean Peninsula. The escalated war of words between Kim Jong Un and Donald Trump, the reaction from Japanese Prime Minister Abe Shinzo, combined with the coverage by international media which tend to inflate the extent of the threat make an imminent war on the Peninsula seem highly plausible.

 

On 7 September, the Greater China and North Asia (GCNA) Regional Management Team meeting of Standard Chartered Bank (SCB) was held in Seoul. As an independent non-executive director and Audit Committee Chairman of SCBK, I made a brief presentation on the state of affairs on the Korean Peninsula and the policy agenda of the new government. I was seated alongside Benjamin Hung, the CEO for the GCNA Region as well as the CEOs of Hong Kong, China, Taiwan and Korea.

 

Benjamin Hung was born in Hong Kong and his family moved to Canada when he was 10 years old. After years of success, Benjamin decided to return to Hong Kong in 1992, five years prior to the Hong Kong handover to China, a time when people were leaving Hong Kong. Benjamin decided to make a u-turn and searched for a job. Out of the four companies that offered him a job, he chose to work at Standard Chartered Bank. Since then, Benjamin led a successful career in the bank, including the CEO of SCB Hong Kong and finally, his current role, the CEO of the GCNA Region. As you may be aware, in Hong Kong, banknotes are not issued by the central bank but three commercial banks, namely Bank of China, HSBC and Standard Chartered Bank. He has worked his way up to become the CEO of a note-issuing bank, thus his signature currently appears on the official currency of Hong Kong. At a time of uncertainty, his firm decisiveness to come back to Hong Kong has led him to be exceptionally successful.

 

I usually close my lecture by putting forward a straightforward question to the audience – is it time to invest further or to pull out of Korea, specifically mentioning the increasing pressure to convert non-regular workers to regular status, sharp rise in minimum wage, every court ruling varying trial by trial when it comes to the scope of ordinary wages, the potential rise in price of electricity following the government’s plan to pivot away from nuclear energy and so forth. I also cite Benjamin’s unusual u-turn when more people were leaving the country. In the current business environment, CEOs are required to make tough decisions on whether to increase investments in Korea, to maintain the status quo or to pull back. I believe that Benjamin’s experience of making a firm decision that had set him apart from others to eventually become exceptionally successful is relevant for all of us.

 

The 1997 Asian Financial Crisis that started in Thailand and gradually spilled over to South Korea is another example I draw. The Thai government warned Korean financial institutions operating in Thailand at the time that those who withdraw from the market will not be allowed back but most of the Korean companies already had enough problems of their own and decided to leave. Almost 20 years later, there are only three Korean financial companies doing business in Thailand. What those companies have gained from trusting the government’s commitment and taking on the risks cannot be measured in terms of money.

 

Yes, it is a fact that there is uncertainty on the Korean peninsula which could be a recipe for crisis. Nevertheless, history has proven that Koreans have turned crisis into opportunity time and again since its economy started to grow in earnest. There will be significant challenges that lie along the road, but when we come out of it, I have both faith and hope that we will make another step forward as a country and as an economy. Making this happen is answering the call of history before our generation.