In the End, Kim Beom-su Steps In Personally... Kakao No Longer Has 'Autonomous Management'

Kakao Accelerates Reform by Restructuring CA Council
Co-Chaired by Kim Beom-su and Jung Shin-ah
Directly Takes Over Control Tower Previously Ineffective

Kim Beom-su, the founder of Kakao, has taken a front-line role in management by serving as co-chairman of the group control tower alongside Jeong Sin-ah, the appointed CEO of Kakao. This signals his intention to directly operate on Kakao as if performing surgery. The fact that he has taken the helm of the group control tower, which had shown limitations despite various reorganizations, has been interpreted as him making a decisive move. It is expected that he will lead the overall management strategy of the group beyond short-term reform efforts.

Strengthening the Control Tower as a Focal Point

The core of the new CA (Corporate Alignment) council announced by Kakao on the 2nd is to serve as an independent body within the group that coordinates internal interests and forms consensus. This outcome came after long meetings between founder Kim and the CEOs of 13 affiliated companies. The council’s co-chairs are Kim and Jeong Sin-ah, the appointed CEO of Kakao. This marks a departure from the past by emphasizing a control tower with strengthened centripetal force rather than loose autonomous management.

Co-chair Kim stepped down from frontline management in March last year. However, as judicial risks stemming from SM Entertainment’s stock manipulation allegations spread throughout the group, he took on the role of chairman of Kakao’s management reform committee from November last year. While that role was focused on short-term reform, this time he intends to directly oversee major issues of affiliates in the mid-to-long term. In particular, the founder will personally oversee the management reform committee and establish a strategy committee to review key performance indicators (KPIs) and investments of each affiliate. This contrasts with the previous loose management of affiliates.

At a meeting, co-chair Kim stated, "A growth direction and management system that meet society’s expectations and trust are necessary," adding, "We will lead reforms in areas including personnel renewal, governance, branding, and corporate culture."

From the Symbol of Autonomy to a Control Tower Gripping the Reins

There is analysis that co-chair Kim is taking a somewhat firm grip and has made a decisive move. This is because the group has abandoned the autonomous management policy of affiliates, which aimed to cultivate "100 CEOs."

Kakao has operated a group control tower since 2017 but it failed to fulfill its role. It began as the "Community Growth Center," established to oversee more than 60 affiliates and enhance synergy. The first center head was Song Ji-ho, CEO of Crust Universe. Song, an investment expert, had participated as CFO when co-chair Kim founded Kakao’s predecessor, iWilab. The core role of the Community Growth Center was to build profit models for each affiliate and attract investment. At that time, Kakao was preparing to spin off major business units like Kakao Pay and Kakao Games from the parent company for IPOs. The plan was to grant autonomy to affiliates while generating synergy with headquarters through the Community Growth Center, in line with co-chair Kim’s intention to cultivate 100 CEOs.

In 2022, the Community Growth Center was transformed into the Community Alignment Center (CAC). This was a measure taken after co-chair Kim faced criticism at a National Assembly audit over allegations of harming small businesses. Additionally, the "stock option exit" scandal involving Kakao Pay’s management led to a determination to strengthen internal controls. Previously, the Community Growth Center only coordinated opinions among affiliates but did not exercise control.

It is reported that at the highest-level meetings, many affiliate internal strategies proceeded despite opposition from co-chair Kim. Former Kakao co-CEO Yeo Min-soo, who headed the center, created "stock sale guidelines" for the community C-level executives. Later, Kim Sung-soo, CEO of Kakao Entertainment, and Hong Eun-taek, CEO of Kakao, served as co-center heads. While Kim coordinated overlapping businesses, Hong was responsible for social contribution fulfillment. Although the CAC Center was positioned as the group’s focal point, co-chair Kim stepped back. In March 2022, he resigned as chairman of the board to focus on discovering future businesses.

The industry views Kakao’s situation as a tug-of-war between autonomy and control. However, the affiliate autonomous management system, which emphasized growth, remained resilient. A representative example is the CAC Center’s consideration and subsequent withdrawal of the sale of Kakao Mobility amid monopoly concerns. Although the community tried to halt business expansion, it faced opposition from affiliate employees. Kakao Mobility promised to strengthen social responsibility but still struggles with monopoly and startup idea theft controversies.

After renaming to the CA council early last year, the CAC Center was reorganized into a four-person executive system in September. Newly appointed members included Bae Jae-hyun, Kakao’s head of investment; Kim Jeong-ho, co-CEO of Bear Better and chairman of the Brian Impact Foundation (in charge of management support); Jeong Sin-ah, appointed CEO of Kakao (in charge of business management); and Kwon Dae-yeol, head of Kakao Policy Center (in charge of crisis management).

However, limitations in risk management persisted. CEO Bae is under prosecution investigation for SM’s stock manipulation allegations. Crust Universe, led by CEO Song, was reported to prosecutors for embezzlement and breach of trust involving the virtual asset "Klay." Amid this, Kim, who was pushing group reform, faced internal resistance and was embroiled in a verbal abuse controversy. The restructuring of Kakao Mobility, the first reform task co-chair Kim took on, also failed to bear fruit.

An industry insider explained, "One cause of this crisis is that major affiliates remain at a stage where they consider themselves venture companies," adding, "The plan is to manage and supervise affiliate issues at the group level centered on a control tower, like a large corporation."

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