Large Corporations Advance Year-End Personnel Moves to Address Crisis Early

Early Personnel Moves Starting Late This Month to Proactively Address Internal and External Uncertainties
Hanwha Group Kicks Off on the 28th... Chairman Kim Seung-yeon's Eldest Son Promoted to President

[Asia Economy Reporter Sung Ki-ho] Major domestic conglomerates in South Korea are advancing their year-end personnel appointments to proactively respond to internal and external uncertainties such as the resurgence of COVID-19 and the three major corporate regulation laws. While major conglomerates typically conduct executive and president-level personnel changes from late November to late December, this year they have initiated the first personnel moves by the end of this month, earlier than the timing for establishing next year's business plans.

According to the business community on the 29th, Hanwha Group took the lead among major groups by making a sudden president-level personnel announcement on the 28th. Hanwha Group usually announces its regular president-level personnel changes around October, but this year it conducted early personnel moves to proactively establish next year's business strategies and stabilize the organization.

This year's personnel changes are notable for officially launching the "third-generation management" through the promotion of Kim Dong-gwan, the eldest son of Chairman Kim Seung-yeon and Vice President of Hanwha Solutions, to president. Among the newly appointed heads of 10 affiliated companies, besides President Kim, three representatives in their 40s were selected, and the group also appointed its first female representative. It is also noteworthy that those appointed come from affiliates related to the solar power business led by President Kim. As Hanwha Group embarks on a generational shift centered on President Kim, this trend is expected to continue in subsequent executive appointments.

With Hanwha advancing its president-level personnel moves by more than a month compared to previous years, expectations are growing that other major conglomerates such as Samsung and Hyundai Motor Group may also initiate early personnel changes.

Samsung Group, which has traditionally conducted personnel changes in December, is now expected to bring forward its regular appointments due to recent judicial risks. The prosecution has indicted a large number of current executives from Samsung Group’s major affiliates, including Vice Chairman Lee Jae-yong, over allegations of illegal succession of management rights. Given past cases where Samsung Group executives resigned taking responsibility after trials, the scale of generational change could be much larger than anticipated.

Hyundai Motor Group, which switched from year-end regular executive appointments to an ad-hoc personnel system last year, conducted one round of appointments in July and is currently recruiting future talent. On the 24th, Hyundai Motor Group announced the recruitment of Professors Tomaso Poggio and Daniela Rus from the Massachusetts Institute of Technology (MIT), renowned scholars in artificial intelligence (AI), as technical advisory members. The following day (25th), Allen Raposo, who has over 30 years of experience in the powertrain field at PSA and Renault, was appointed Vice President of Hyundai-Kia Motors’ Research and Development Headquarters. Hyundai Motor Group is accelerating related personnel recruitment ahead of the launch of the dedicated electric vehicle platform brand "Ioniq" next year.

SK Group’s personnel changes are scheduled for December, following the annual CEO seminar planned for the third week of next month. There are expectations that the scale of personnel changes at SK Group could be substantial. In particular, Chairman Chey Tae-won presented "enhancing corporate value" as the group’s management theme for this year at the "2020 Expanded Management Meeting" held at the SKMS Research Institute in Icheon in June, so depending on the seminar results, significant reshuffling and large-scale appointments are anticipated.

LG Group may also see large-scale renewal personnel changes similar to last year. Especially with LG Energy Solution set to launch in December as a spin-off from LG Chem’s battery division, this will likely be heavily reflected in personnel decisions. Additionally, with last year’s CEO of LG Electronics, Vice Chairman Jo Seong-jin, stepping down and top management changes occurring, attention is focused on how follow-up personnel changes for generational transition will be carried out this year.