[People人] A Prepared Executive Who Took Out the 'Basic'... Kim Nam-ho, Chairman of DB Group

[Asia Economy Reporter Ki-min Lee] The phrase "second generation" is always attached before the name of Kim Nam-ho, the newly appointed chairman of DB Group (46, photo). Second-generation business leaders are often praised for having higher educational backgrounds and global sensibilities than their predecessors, but they are frequently criticized for lacking leadership or a spirit of challenge compared to the founding generation. This is because, unlike the founding generation who built companies in a fierce jungle, successors inherit management rights through "succession." Additionally, occasional reports of some owners' children's misconduct contribute to social prejudice against them. This is why the saying "defending is harder than founding" remains an old adage in the business world.

"For a company, defense (守城) is harder than founding, and challenge and success beyond defense are even more difficult." On the first day of the generational change achieved after 50 years since the establishment of DB Group, Chairman Kim recalled this saying as a reminder of the "basics of management."

Chairman Kim, who cited this long-standing lesson of the business world as his inaugural message emphasizing the "basics among basics," is regarded as a second-generation leader who has solidly built his foundation. He earned a bachelor's degree in business administration from Westminster College in the U.S. and an MBA from the University of Washington. After completing a finance course at the University of California, Berkeley (UC Berkeley), he returned to Korea. Breaking the usual convention where successors start as executives, Kim joined Dongbu Steel, a DB Group affiliate, in 2009 as a deputy manager and worked at the Dangjin plant. According to DB Group insiders, during his time at Dongbu Steel, he mingled well with field employees, so most colleagues did not even know he was the eldest son of former Chairman Kim Joon-ki.

In the business community, Chairman Kim is seen as having crisis management skills, having navigated DB Group through restructuring. DB Group, started by former Chairman Kim Joon-ki in 1969 as Miryung Construction, expanded into materials, agriculture, logistics, steel, and finance after successfully entering the Middle East construction market in the 1970s. Thirty years after its founding, in 2000, it ranked among the top 10 business groups in Korea. However, after large-scale investments in steel and semiconductors, it faced a liquidity crisis and underwent restructuring. DB Group's business and scale were reduced to two pillars: finance and manufacturing, and as of May this year, its business ranking dropped to 39th.

Chairman Kim began to actively engage in group management in 2015, when restructuring was in full swing, by moving to the DB Financial Research Institute. He played a significant role in resolving the liquidity crisis of DB Inc., the holding company for the manufacturing sector, during the group's restructuring process. He was also deeply involved in the sales of Dongbu Farm Hannong and Dongbu Daewoo Electronics, and recently successfully led a capital increase for DB Metal, which had been under joint management (workout) by creditor financial companies. Additionally, Chairman Kim has been working on setting the mid- to long-term vision for financial business at the DB Financial Research Institute, the control tower of the financial sector, and making efforts to respond accordingly.

Facing a challenging management environment due to the aftermath of COVID-19 and other factors, Chairman Kim is seeking to revitalize the atmosphere shortly after his inauguration. Within two weeks of his appointment, he carried out executive personnel changes, signaling a full-scale generational shift. On the 13th, DB Group promoted Koo Kyo-hyung, head of Group Management Planning, Lee Sung-taek, president of DB Financial Research Institute, Kim Jung-nam, CEO of DB Insurance, and Choi Chang-sik, CEO of DB HiTek, to vice chairmen. Former Chairman Kim Joon-ki and Chairman Choi Yeon-hee of DB Inc., who led management alongside him, and Yoon Dae-geun of the Financial Research Institute retired in line with Kim's inauguration.

Chairman Kim is expected to continue efforts to strengthen the market competitiveness of DB Group's financial affiliates and seek new breakthroughs. Financial affiliates such as DB Insurance, DB Life, and DB Financial Investment account for more than 90% of the group's total sales. In particular, DB Insurance, which recorded a net profit of 372.9 billion KRW last year, maintains its position as the second-largest in the industry after Samsung Fire & Marine Insurance. However, due to market saturation and low interest rates, the management conditions of insurance companies are worsening. Accordingly, DB Group's financial affiliates are also devising various services to prepare for the Ontact (online face-to-face) era. For example, DB Insurance Direct introduced "Direct Talk," the first of its kind in the insurance industry, last year.

In the manufacturing sector, Chairman Kim may present mid- to long-term plans to enhance the capabilities of foundry (semiconductor contract manufacturing) companies such as DB HiTek. The recent promotions of Koo Kyo-hyung, head of Management Planning and a DB HiTek alumnus, and Choi Chang-sik, CEO of HiTek, to vice chairmen are seen by the business community as a prelude to expanding the foundry business. DB HiTek achieved record-high sales of 807.4 billion KRW and operating profit of 181.3 billion KRW last year. This year, semiconductor demand is expected to increase further due to the activation of untact (non-face-to-face) services amid the COVID-19 aftermath, improving performance. However, in absolute terms, DB HiTek still falls short of global foundry companies, and investment is necessary to maintain the company's growth trajectory.

Attention is focused on whether Chairman Kim can restore DB Group's past glory and realize his dream of making it a sustainably growing company that overcomes any environmental changes, as stated in his inaugural speech. A business insider said, "Chairman Kim, an expert well-versed in finance, is expected to strengthen the competitiveness of financial affiliates while dedicating efforts to investing in the foundry business for the success of manufacturing affiliates."