Overwhelmed by the unprecedented COVID-19 pandemic this year, South Korea’s conglomerates have gone all-out to overhaul their business structures in light of the crisis.
Additionally, key groups embraced leadership changes, with third or fourth-generation scions officially taking the front line, and appointed young talents to strategic posts -- signaling a new generation cycle in the business realm.
Stepping into the spotlight was Lee Jae-yong, chief of the No. 1 conglomerate Samsung Group and vice chairman of flagship Samsung Electronics, who officially succeeded to the throne when Chairman Lee Kun-hee died in October after several secluded years on his sickbed.
The leadership transition has been relatively smooth for the chaebol family as Lee has already served as the de facto top figure for years in the absence of his father.
But 2020 proved to be a demanding year for the Samsung heir, as the prolonged trial on his alleged involvement in the power rigging scandal of former President Park Geun-hye continued. The case, which had been sent back to the high court to reflect the increased bribery amount, is to close the pleading process on Wednesday and due to deliver a ruling in January.
Lee is also facing a record-high amount of inheritance tax, currently to be 11.03 trillion won ($10.1 billion), according to the bourse operator Korea Exchange and brokerage market officials. As the figure was based on the closing prices of the company’s stocks on Dec. 22, the final due payment is likely to rise even further, considering the bullish trend lately.
Notwithstanding such hurdles and the epidemic situation, Lee has continued to make active site visits for business inspections and employee communication. The difference this year was that he mostly focused on domestic locations, due to travel restrictions.
After visiting manufacturing facilities in Brazil in late January -- before the coronavirus started to spread across borders -- Lee has made trips to most of the group’s local laboratories and plants, especially those related to semiconductors and displays.
He also took the COVID-19 test several times in order to visit a semiconductor plant in Xian, China, in May, and to meet with Vietnamese Prime Minister Nguyen Xuan Phuc in October.
At the nation’s second-largest conglomerate Hyundai Motor Group, another third-generation owner scion Chung Euisun took control, rising from vice chairman to chairman in October.
His official promotion to the top post came as the group is gearing up to transform itself from carmaker to comprehensive mobility system operator.
One of the first major decision that followed his promotion was the group’s acquisition of robotics firm Boston Dynamics.
Chung was especially noted for his individual meetings with other conglomerate counterparts throughout the year, starting with Samsung chief Lee in May and sitting with Lotte Group Chairman Shin Dong-bin in late November.
His active networking gestured the automaker group’s aspiration to add fuel to its future mobility road by tightening the bonds with key tech groups and to have a presence in the post-coronavirus business world.
Other top-tier conglomerates that are already being run by third or fourth-generation scions -- SK Group and LG Group -- devoted themselves further to sustainable agendas in light of the prolonged epidemic fallout and anticipated market changes to come.
SK Group’s Chey Tae-won, who has been pushing ahead with ESG (environmental, social and governmental) initiatives, has recently added exclusive committees on governance and environment under the group’s decision-making body Supex Council.
Facing his fourth year at the top post, LG Group Chairman Koo Kwang-mo has brought the group’s battery business to the fore. The most notable move was LG Electronics’ decision to spin off its electronic automotive business as the new LG Energy Solution.
“The recently observed generation shift comes amid an unprecedented era, in which businesses are required to grow out of conventional customs and pioneer new global frontiers,” said a market observer.
“Relatively young leaders may contribute to building up the horizontal, cooperative relationships.”
By Bae Hyun-jung (
tellme@heraldcorp.com)
