Will a 'Cold Wind' Blow During the Business World Personnel Season... Choices Amid Crisis

Following Hyundai Motor, Samsung, SK, and LG Announce Regular Personnel Changes

Following last week's announcement of executive and president appointments by Hyundai Motor Group, LG is expected to conduct its year-end executive reshuffle this week, with Samsung and SK scheduled to follow in early next month. Reflecting the corporate trend of selecting talent based on ability rather than age, tenure, or gender, it is anticipated that this year’s year-end personnel changes will see a significant rise in the appointment of young executives born in the 1980s and female executives.

LG Group is highly likely to carry out its year-end executive reshuffle on the 23rd or 24th. Last year, LG also conducted its executive reshuffle at the end of November. The broad personnel direction, including whether to retain each company’s CEO, has already been decided. The final approval will be given by each company’s board of directors on the 23rd or 24th, after which the announcements will be made public. The reason LG Group decided on the major executive personnel direction in advance is believed to be because Chairman Koo Kwang-mo is expected to be overseas at the time of the reshuffle. Ahead of the Expo host country decision scheduled for the 28th of this month, all major corporate heads have boarded planes to support the final bidding efforts. Chairman Koo departed for the UK on the 20th, accompanying President Yoon Suk-yeol.

This year, external risks such as the US-China hegemonic rivalry and the Russia-Ukraine war, combined with the triple challenges of high interest rates, high inflation, and high exchange rates, have created a difficult management environment, and this trend is expected to continue into next year. In LG’s case, it is assessed that stability will be favored over drastic reform. It is highly likely that the three vice chairmen?Kwon Bong-seok of LG Corp., Kwon Young-soo of LG Energy Solution, and Shin Hak-cheol of LG Chem?will be retained, and CEOs of key business units are also expected to keep their positions rather than be replaced. This year’s year-end reshuffle is expected to see multiple promotions in the battery and automotive electronics (electric and electronic components for vehicles) sectors, which are expanding business areas. This reflects Chairman Koo Kwang-mo’s intention to share the fruits with those who have actually developed the future growth engines he envisioned.

The Samsung reshuffle scheduled for early next month is widely expected to involve more significant changes compared to last year. Last year’s year-end reshuffle coincided with Chairman Lee Jae-yong’s inauguration, making major reforms difficult. However, this year, Samsung Electronics’ performance has plummeted, and the first trial regarding Chairman Lee’s allegations of unfair mergers and accounting fraud, which has been ongoing for over three years, is expected to conclude in January next year, increasing the likelihood of a group-wide organizational restructuring.

Attention is also focused on whether the current 'two-top' leadership system at Samsung Electronics, led by Vice Chairman Han Jong-hee overseeing smartphones and home appliances and President Kyung Kye-hyun heading the semiconductor (DS) division, will change. Since Vice Chairman Han’s and President Kyung’s terms run until March 2026 and March 2025 respectively, replacement is less likely, and the revival of the previous three-person leadership system comprising mobile, home appliances, and semiconductors remains a possibility.

Moreover, if the control tower for Samsung’s future business initiatives is reinstated, the currently separated task forces?Business Support TF in the electronics division, EPC Competitiveness Enhancement TF in the construction division, and Financial Competitiveness Enhancement TF in the financial division?may be integrated into one, potentially leading to subsequent personnel changes. Although the number of executive promotions is decreasing, Samsung Electronics, which has been increasing the appointment of young executives such as those in their 30s as managing directors and 40s as vice presidents every year, is expected to continue this trend. Chairman Lee Jae-yong, who flew to the UK a day earlier on the 19th, is also likely to promote female and foreign employees to executive positions to strengthen competitiveness based on diversity and inclusion.

SK Group plans to conduct its president-level reshuffle in early next month. Chairman Chey Tae-won has repeatedly emphasized the crisis situation, increasing the likelihood of replacing existing management. In his closing speech at the 'SK CEO Seminar' held in Paris, France, last October, Chairman Chey stated, "If we do not change quickly and decisively amid rapid internal and external environmental changes, we cannot survive," referring to the concept of 'sudden death.'

What draws attention is that Chairman Chey has brought up 'sudden death' again after seven years. In 2016, at the SK Group expanded management meeting, he warned, "Under the current management environment, companies that do not change will not just be left behind but may face 'sudden death' and disappear at any time." This is interpreted as Chairman Chey viewing the current management environment very seriously. Accordingly, unlike last year’s personnel reshuffle, which emphasized 'stability amid crisis,' this year’s reshuffle is expected to be broader. There is speculation about the possible replacement of long-serving vice chairmen such as Cho Dae-sik, chairman of the SUPEX Council; Jang Dong-hyun, vice chairman of SK Corp.; Park Jung-ho, vice chairman of SK Hynix and SK Square; and Kim Jun, vice chairman of SK Innovation.

This content was produced with the assistance of AI translation services.