[People人] Gu Ji-eun Becomes First Female Head of LG Family, Breaking the Principle of Primogeniture Succession

Restructuring a Shaken Organization, Testing Management Skills
The Only One Among Four Siblings to Work at Ourhome for 10 Years

[Asia Economy Reporter Lim Hye-sun] The first female CEO has emerged within the LG Group family. Gu Ji-eun, the youngest daughter of Gu Ja-hak, chairman of Ourhome, and former CEO of Calisco (pictured), broke the glass ceiling of the LG Group family and was appointed CEO of Ourhome on the 4th. After Gu Bon-seong, vice chairman of Ourhome, was sentenced to prison for retaliatory driving, the next day at the board meeting, Gu Ji-eun, the youngest sibling of Vice Chairman Gu, took control of Ourhome’s actual power.

Breaking the Glass Ceiling

The LG Group family strictly adheres to the principle of primogeniture, adopting relatives as heirs if the owner has no sons. Gu Ji-eun is the first to break through this solid wall. She is the third daughter of Gu Ja-hak, chairman of Ourhome and the third son of the late Gu In-hoe, founder of LG Group, and Lee Sook-hee, the second daughter of the late Lee Byung-chul, chairman of Samsung Group. Above Gu Ji-eun are her older brother Gu Bon-seong, vice chairman, and two older sisters, Gu Mi-hyun and Gu Myung-jin. Ourhome was launched in 2002 when LG Distribution’s food material sales division was separated, and it ranks second in the group meal market following Samsung Welstory.

The opportunity was provided by her older brother, Gu Bon-seong. In the LG family atmosphere that values character, it was likely difficult to keep Gu, who caused social controversy due to retaliatory driving and was sentenced to six months in prison with a two-year probation, as CEO. Gu Ji-eun (20.7%), eldest daughter Gu Mi-hyun (19.3%), and second daughter Gu Myung-jin (19.3%) together hold a 59.6% stake and successfully proposed 21 new directors at the shareholders’ meeting. Immediately after the shareholders’ meeting, the board dismissed Vice Chairman Gu from the CEO position and appointed Gu Ji-eun as CEO.

A Veteran with Over 10 Years at Ourhome

Among the four siblings, Gu Ji-eun is the only one who has worked at Ourhome for over 10 years and has been recognized for her management skills. She graduated from Seoul National University’s Business Administration department and earned a master’s degree from Boston University in the U.S. After working as a senior consultant at Samsung Human Resources Development Institute and Watson Wyatt Korea, she joined Ourhome in 2004 as head of the purchasing and logistics division. She expanded Saboten stores and pioneered the Japanese-style pork cutlet market, also leading the franchise business of global dining company Taco Bell. Six years after joining, in 2010, she was promoted to executive director and laid the groundwork for overseas market expansion including China. During the 10 years since her joining, Ourhome’s sales nearly tripled, growing from 532.4 billion KRW in 2004 to 1.3045 trillion KRW in 2014.

Recognized for her contributions, she was appointed head of the purchasing and food materials division at the vice president level in 2015. At that time, Gu was expected to become a female executive in a major conglomerate alongside her cousin sisters Lee Boo-jin, CEO of Hotel Shilla, and Chung Yoo-kyung, chairwoman of Shinsegae, but she was dismissed from the position after five months. In 2016, she returned as vice president of the purchasing and food materials division but moved to become CEO of the subsidiary Calisco after about two months. In June of that year, in accordance with the LG Group family’s primogeniture principle, Chairman Gu handed over management rights to his son, Vice Chairman Gu.

Email to All Employees Upon Arrival

On the 7th, Gu Ji-eun immediately began reorganizing the company upon arriving at work. She sent an email to employees stating, “I will create a work environment where many talents can demonstrate their abilities.” She emphasized, “We will revive the fair and transparent traditions and philosophy of Ourhome while discovering future growth engines to develop into a global company. We will boldly change wrong practices.”

After reorganizing the organization, Gu plans to focus on improving Ourhome’s performance. Due to the impact of COVID-19, demand for catering plummeted, causing a sharp decline in performance. Ourhome’s sales in the first half of last year fell by 12%, and it recorded an operating loss. Since the group meal and food material distribution divisions contribute more than half of the total performance, the company is evaluated as having weaker crisis response capabilities compared to competitors.

Internal conflicts within the owner family also remain a challenge for Gu. Although Vice Chairman Gu stepped down as CEO, he still holds a position as an inside director. Removing an inside director requires approval from shareholders holding more than two-thirds of the shares, and Vice Chairman Gu’s stake (38.56%) exceeds one-third, raising the possibility of him attempting to regain management control. Therefore, it is also known that Gu Ji-eun may pursue an initial public offering (IPO) and capital increase of Ourhome to reduce Vice Chairman Gu’s shareholding ratio.