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Kolon Group Chairman Lee Woong-yeol
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Group likely not to appoint new chairman for some time
“Being born with a silver spoon, the life I’ve lived has been more special than other people, but that made me feel the weight of my responsibility, too. Having that silver spoon in my mouth has apparently caused my teeth to crack, and now I’m going to be laying down both my privileges and my responsibilities.” On Nov. 28, Lee Woong-yeol, chairman of the Kolon Group, announced that he will be resigning from all positions in the group as of Jan. 1, 2019. Grandson of group founder Lee Won-man and son of Honorary Chairman Lee Dong-chan, Lee Woong-yeol started working at the group in 1977 and has been at the helm as chairman since 1996. After Lee steps down, the group seems likely to maintain a system of professional management and not appoint a new chairman for some time. Lee came to the podium toward the end of a session called the “puzzle of success,” which was held at the Kolon One and Only Tower in the Magok neighborhood of Seoul’s Gangseo District on Wednesday morning. With more than 200 staff and executives looking on, Lee said, “Next year, I will be leaving the company to which I have belonged. Moving forward, I won’t be involved in the management of the group.” Lee’s remarks were broadcast live to executives and employees of the group, and Lee made his resignation official through a letter that was posted on the group’s intranet. Stepping aside to let the company “undergo genuine change” “I will now be returning to the Lee Woong-yeol of my youth and walking down the path of new entrepreneurship. When I became the chairman of the group on Jan. 1996, at the age of 40, I made a vow to remain at the group’s helm for just 20 years, but I’ve stuck around for three more years. This is my only chance—if I don’t leave now, I don’t think I’ll have the courage to take on a new challenge,” Lee wrote in his letter. “If you don’t ride the wave of change in the completely unpredictable industrial ecosystem, you get left behind. It occurred to me that I need to get out of the way to allow [the company] to undergo genuine change.” After getting a job at the Kolon Group, Lee mostly worked at overseas offices in New York and Tokyo while taking classes in management. He was promoted to the board of directors just twelve years later, in 1985, and then made vice chairman in 1991 and chairman in 1996. Almost immediately, in 1997, Lee had to deal with the Asian financial crisis, which impelled a harsh restructuring of the group in which its 26 affiliates were pared back to 15. Lee faced another trial in Apr. 2016 when he was reported to the prosecutors after the group was audited by the fearsome fourth bureau of the Seoul Regional Tax Office. Lee’s decision stands in stark contrast to other Korean chaebols Lee’s decision to relinquish control of management without passing the mantle to a member of his family stands in contrast to what happens at other chaebols in Korea. Lee opted for an early retirement, unlike other corporate leaders who have only passed along control of the company to a relative upon their death or when they are no longer physically able to manage the company. The Kolon group has adhered to a clear principle of “primogeniture,” according to which only the eldest son participates in management, to the exclusion of daughters and sons-in-law. In the company’s regular executive reshuffle that was also announced on Wednesday, Lee’s eldest son Lee Kyu-ho was promoted from managing director to executive director and tapped as chief operating officer for Kolon Industries’ FnC division. The younger Lee reached the position of executive director after just six years in the company and one year as managing director. “Lee Woong-yeol’s father Lee Dong-chan stepped down in his seventies and passed away in his nineties, and he had regularly said he would step down once his son [Lee Woong-yeol] turned forty. Lee Woong-yeol had also intended to step down from management at the age of 60, but he stayed on as chairman for about four more years because of his son’s youth,” said a spokesperson for Kolon. Lee Woong-yeol ultimately decided to step down early from management while allowing his eldest son to acquire experience in management by appointing him as the head of the group’s key fashion division. In the future, major management issues at the Kolon Group – including long-term management direction, large-scale investment and cooperation and conflicting interests between group affiliates – will be handled by the One and Only Council, which functions as a deliberating body for presidents of group affiliates. The council will be chaired by Yoo Seok-jin, who was promoted from vice president to president of the Kolon Corporation. Yoo was recruited to join Kolon as executive director in 2013 and handled the group’s strategy and planning until last year, when he was selected for promotion to vice president. “Personnel assignments over the past few years represent a generational transition that has created a lineup of young and dynamic CEOs. These young CEOs will lead change and innovation in the group,” the Kolon Group said. By Choi Ha-yan, staff reporter, and Kwack Jung-soo, business correspondent Please direct comments or questions to [english@hani.co.kr]
