[Innovation Lost at Kakao] ④ CEO Jeongsin-a Bearing the 'Chairman Arrest' Crisis... Can He Overcome the Challenge?

Entering Emergency Management System... Questions Raised on Leadership
"Hard to Ignore Major Shareholders... Consider 'Erasing Kim Beom-su'"

Attention is focused on Jeong Sin-ah, CEO of Kakao, who stepped up as a relief pitcher amid the greatest crisis of the arrest of the group head. CEO Jeong plans to activate an emergency management system and push forward reform efforts, but concerns have also been raised about the loss of momentum due to the absence of the founder.

According to industry sources on the 31st, Kakao has entered an emergency management system centered on CEO Jeong, who also serves as co-chairman of the CA Council. CEO Jeong will also act as the head of the management reform committee, a position previously held by former CA Council co-chairman Kim Beom-su. He intends to proceed smoothly with the reform project and the development of artificial intelligence (AI) services.

Kakao put CEO Jeong at the forefront to minimize the leadership vacuum, but there are many voices expressing skepticism about his leadership. Even when CEO Jeong was appointed as Kakao's new head, there were differing opinions on whether he was the right person for reform. This was due to his background as CEO of Kakao Ventures since 2018 and his role as a non-executive director at Kakao. Questions were raised about whether an insider could improve the company’s structure and bring about a fundamental transformation.

Since taking office, CEO Jeong has shown actions that do not align with reform. Kakao officially appointed Jeong Kyu-don, former CTO of KakaoBank who sparked controversy over stock option exercises labeled as 'eat-and-run,' as Kakao’s CTO. Jeong served as CTO of KakaoBank from 2016 until February last year and sold 106,000 shares just three trading days after KakaoBank’s IPO, earning about 6.6 billion KRW in profits. Two weeks later, he sold the remaining 11,234 shares at 91,636 KRW per share, pocketing over 1 billion KRW. This personnel decision drew criticism as a 'revolving door appointment' and was seen as inconsistent with the large-scale personnel reform CEO Jeong had promised.

Moreover, there have been few notable achievements through the external body for compliance and ethical management monitoring, the 'Compliance and Trust Committee,' and the group control tower, the CA Council. At a public event at the Kakao Data Center in Ansan last June, CEO Jeong said, "If the first half of the year was about preparation for reform, the second half will be about solidifying it further."

Considering his past actions and Kakao’s current situation without a group head, there are concerns that reforms centered on CEO Jeong may have limitations. With the possibility of selling off Kakao’s key subsidiaries being discussed, worries have been raised about whether CEO Jeong can ultimately make important management decisions in place of the group head.

Professor Hwang Yong-sik of Sejong University’s Department of Business Administration said, "It is difficult for professional managers to act independently without considering the major shareholder’s views," advising, "For Kakao to overcome this crisis, a resolute will for a second founding and even efforts to 'erase Kim Beom-su' should be considered."