[25 Years of Business Upheaval] Special Mission 'Future Food Source' The 80s-born Owner Is Coming

<3> Business Groups, 3rd and 4th Generation Management Take Center Stage
Owners Born After the 1970s Become Executives
197 Out of 270 Are President Level or Higher
Chairmen and Vice Chairmen Total 50
Extensive Overseas Experience and Leading MZ Communication
Focus on Bold New Business Discovery and Investment

[Asia Economy Reporter Choi Dae-yeol] "Just as our founders and predecessors overcame all trials and hardships to build today's proud Samsung, I will embark on a second founding based on the spirit of youthful vigor and progressive ambition." (Late Samsung Chairman Lee Kun-hee, December 1, 1987 inauguration ceremony)

In April 1987, the government designated large business groups for the first time to curb the exaggerated management practices of chaebols. In November of the same year, Lee Byung-chul, the founder of Samsung, passed away, and according to his will, his third son Lee Kun-hee took office. At the age of 46 by Korean age, he became the head of the group ranked third in the business world with sales exceeding 13 trillion won. The late Choi Kwan-sik, then 58, president of Samsung Heavy Industries, who had the earliest employee number among the presidents, handed over the company flag to Chairman Lee.

Earlier, in 1981, Kim Seung-yeon became chairman of Hanwha Group at the age of 30, and Chey Tae-won became chairman of SK Group in 1998 before turning 40. Although this was partly due to the sudden absence of the previous generation of management, the appearance of these young leaders in their 30s and 40s was unusual given the deep-rooted Confucian seniority system. Decades later, the perception of young owner-managers has somewhat changed.

Generational Change in Business Circles... Younger Owner Families

In May 2019, the Fair Trade Commission newly designated fourth-generation business leaders such as Koo Kwang-mo of LG and Park Jung-won of Doosan Group, as well as third-generation leaders like Cho Won-tae of Hanjin Group, as the same person (head of the group). The commission explained, "It appears that structural changes in governance are becoming more active, with the emergence of fourth-generation successors after the founders."

This means that the first and second generations are stepping back from frontline management, and the third and fourth generations are actively pursuing their own agendas. Although not owner-managers, several professional managers born in the 1980s have emerged in the IT and gaming industries, such as Choi Soo-yeon, CEO of Naver; Kim Il-doo, CEO of Kakao Brain; and Kim Min-gyu, CEO of Line Games.

Comparing the average age of heads of the top 20 groups, it remains around the early 60s, similar to 25 years ago, but recently, it is different that the previous generation leaders are still active or have already taken the lead in management during their lifetime. According to a survey by the Korea CXO Institute targeting the top 200 major groups and key medium and small enterprises, 270 owner-managers born after the 1970s have been appointed as executives.

Among them, 21 hold the title of chairman, and including vice chairmen, the number reaches 50. There are 147 at the president level. Chung Eui-sun, chairman of Hyundai Motor Group born in 1970, was promoted to group chairman in 2020 and was designated as the head of the group last year following honorary chairman Chung Mong-koo. Chung Ji-sun, chairman of Hyundai Department Store Group, has held the chairman position for over 10 years since his father, honorary chairman Chung Mong-geun, stepped down in 2007. Oh Il-seon, director of Korea CXO Institute, said, "As young owners born after 1970 take on executive roles, the 2023 general executive appointments may see a surge in executives born in the late 1970s and early 1980s."

Rapidly Changing Management Environment... MZ Generation Owners Leading New Businesses

With young leaders taking charge of groups, management styles have also changed. They are boldly investing in new growth businesses and taking on challenges. Hyundai Heavy Industries Group, ranked ninth in the business world and celebrating its 50th anniversary this year, changed the name of its holding company to HD Hyundai (formerly Hyundai Heavy Industries Holdings) earlier this year. Jeong Ki-sun, eldest son of Jeong Mong-joon, chairman of the Asan Foundation and the largest shareholder, joined the company in 2013 and within about ten years became CEO of the holding company and its key affiliates.

While focusing on shipbuilding and refining, they have ventured into future growth areas such as hydrogen and robotics. The new business promotion office within the holding company is supported by young overseas-trained executives including Vice President Kim Wan-soo, Executive Director Kim Jong-chul, and Managing Director Lee Seong-bae. Both Kim and Lee were born in the 1970s and serve on the boards of group affiliates related to new businesses such as Hyundai Global Service, Hyundai Future Partners, Asan Kakao Medical Data, and Hyundai Robotics.

Kim Dong-kwan, president of Hanwha Solutions' Strategy Division, also officially joined the board of directors of the holding company Hanwha Corporation this year as its general president. Like Jeong, he is dedicated to discovering and nurturing new businesses at the group level. Considering the group's existing business capabilities, energy and space businesses are his main interests. He leads the Space Hub team, composed mainly of engineers from affiliates related to space businesses such as Hanwha Aerospace, and joined the board after acquiring Setrec Eye, the only satellite system developer in Korea. Since overseas business accounts for a larger portion than domestic, Kim works without pay, believing his overseas network will aid business expansion.

Choi Sung-hwan, eldest son of former SK Networks chairman Choi Shin-won, joined the board at this year's shareholders' meeting. While Choi Tae-won, chairman, Choi Jae-won, senior vice chairman, and Choi Chang-won, vice chairman of SK Discovery, all actively participate in frontline management, Choi Sung-hwan is the most advanced among the third generation of SK owners. The company, which used to focus on general trading, is being reorganized into a business investment company, and the industry expects Choi's management skills to be tested during this process. He has consecutively invested in blockchain, eco-friendly materials, and electric vehicle charging businesses.