Kakao Introduces Executive Ranks for the First Time Since Founding... "Recognizing the Need for Work Authority and Responsibility"

[Asia Economy Reporter Kang Nahum] Kakao has introduced executive ranks for the first time since its founding. This is interpreted as a determination to overcome controversies over platform monopolies through changes in governance and business operation methods.

According to industry sources on the 7th, Kakao appointed 10 non-registered executives as of the 1st. Included were Hong Eun-taek, Head of Commerce CIC; Kwon Dae-yeol, Chief Relationship Officer (CRO); Jung Eui-jung, Chief Technology Officer (CTO); Bae Jae-hyun, Chief Investment Officer (CIO); Lee Sung-ho, Chief Financial Officer (CFO); Kim Taek-soo, Chief Product Officer (CPO); Kang Hyung-seok, Chief Creative Officer (CCO); and Kim Yeon-ji, Chief Privacy Officer (CPO).

A Kakao official explained the reason for introducing executive ranks, saying, "As the company has grown rapidly, issues regarding the decentralization of authority and responsibility across various organizations have emerged, making it necessary to have executives who oversee and take responsibility for each business division."

Non-registered executives are required to disclose their holdings of company shares periodically. Accordingly, these executives disclosed their specific securities ownership status the day before.

Since its founding, Kakao had no non-registered executives except for the seven mandatory executives under the Commercial Act, such as registered directors and outside directors. This was to maintain a horizontal organizational culture. Although some employees used executive titles externally, internally there was no distinction between non-registered executives and regular employees.

The introduction of executive ranks is seen as Kakao's determination to overcome the current crisis by changing its governance and business operation methods. On a conference call in May, Kakao co-CEO Yeo Min-soo hinted at organizational changes, stating, "We are reviewing various options regarding the operation methods and governance of community businesses to strengthen synergy among communities and enhance the value of the headquarters."

Many in the industry analyzed that Kakao’s crisis stemmed from the absence of a control tower to guide the company’s direction. Kakao’s unique organizational structure, which is horizontal and allows each affiliate to operate independently, is said to have caused the current crisis. Recently, Kakao has faced criticism for its aggressive business expansion, labeled as "octopus-like expansion," drawing backlash from regulatory authorities, politicians, and public opinion. Ultimately, Kim Beom-su, Chairman of Kakao’s Board of Directors, was summoned to a National Assembly audit, where lawmakers intensely questioned him about allegations of infringing on small businesses and tax evasion.

Meanwhile, Chairman Kim will once again appear as a witness at the National Assembly’s Industry, Trade, and Small and Medium Enterprises Committee audit on the same day. The committee is expected to focus its questioning on issues related to online platform monopolies. Also attending as a witness alongside Chairman Kim will be Ryu Geung-seon, CEO of Kakao Mobility, which has been embroiled in controversy over the increase in Kakao Taxi’s smart call fees and market monopoly concerns.