By Kim Hyun-bin
LG Group Chairman Koo Kwang-mo has made major changes to the governance structure of key affiliates to give their management more independent authority. The group has drastically reduced the number of concurrent positions for vice chairs on their boards of directors and instead has appointed outside directors to head the boards for the first time, so as to strengthen the affiliates' independence, according to group officials, Tuesday.
LG Group Chief Operating Officer (COO) Kwon Bong-seok will concurrently be the chairman of the board of directors at LG Electronics (LGE). His predecessor, LG Group Vice Chairman Kwon Young-soo, the current CEO of LG Energy Solutions (LGES), had previously chaired the boards of directors for numerous key affiliates such as LGE, LG Chem, LG Display and LG Uplus.
However, with the changes, the CEOs of LG Chem, LG Display and LG Uplus will concurrently chair the boards of their own respective firms.
LG Group Chairman Koo Kwang-mo
LG Chem CEO Shin Hak-cheol, LG Display CEO Jeong Ho-young and LG Uplus CEO Hwang Hyeon-sik each currently chair their own firms' respective boards. In the case of LGES, Vice Chairman Kwon Young-soo was appointed as the company's CEO last November, and he is also chairman of the company's board of directors.
The holding company, LG Corp., and its vice chairman have had their authority significantly reduced from before, in a bid to strengthen affiliates' independent management.
The decision to transition the power of the boards of directors from LG Group to key affiliates appears to have been backed by Chairman Koo, as the organization has stabilized under his leadership. After taking office in June 2018, Koo appointed executives and Vice Chairman Kwon Young-soo as the group's second-in-command. Afterwards, Kwon took on the role of chairing the boards of major affiliates, shaping the future growth of the group.
After three years, he helped established Koo's management structure, and was appointed to head LGES last November.
Some affiliates have appointed outside directors to chair their boards of directors, for the first time since LG Group was founded. LG Innotek elected outside director Chae Jun, a professor of business administration at Seoul National University, as their chairman. LG HelloVision also appointed former D Live Vice President Ko Jin-woong, who was another outside director.
"This year, changes have been made so that the boards of directors can operate more efficiently under the principle of responsible management centered on the board of directors of each company," an LG Group official said. "We have also strengthened the diversity of the boards of directors by appointing outside directors as their chairmen."
