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Shareholders at annual meetings of LG Group affiliates seemed to agree that the necessary groundwork for reorganizing group-wide decision making has been accomplished when they approved of chief operating officer (COO) Kwong Young-soo's expanded role to support Chairman Koo Kwang-mo.
On Friday, LG Chem shareholders approved the appointment of Kwon to head its board of directors; meaning he will manage the boards of the group's four core affiliates as he is already board chairman of LG U+, LG Display and LG Electronics.
Usually, a company's board chairman leads in efforts to advise on core business strategies, while monitoring the company's performance, overseeing finance and evaluating overall management. A CEO sets up the company's shared values and common goals while implementing and articulating its strategic plans. The board chairman must often collaborate with the CEO to move forward with such strategies thoroughly.The approval means a lot as the COO is considered to be a top confidant of the group's young chairman.
The four LG affiliates that Kwon is now chairman of the boards of are important growth drivers for the group; however, investors were disappointed about their worsening financial results. They ere also disappointed at how LG's top management handled their concerns as they were unable to see signs of growth.
LG officials remained cautious about any changes Kwon might make after taking the board chairman at the four tech affiliates. But some say he will have more open and candid communication with the CEOs of the units to boost possible synergy effects more systematically and accelerate decision making.
"LG is seeking to make the entire group more focused and efficient. The COO will stick to supporting Chairman Koo. However, he will be quite aggressive in strategizing and exploring what new businesses LG can pursue with more candid communication," one LG executive said.
Kwon is a veteran businessman and a rare but necessary breed for LG. His outspoken and "no fear" style has helped him expand his global network. He has been the CEO of LG Display and LG Uplus, handled LG's battery business and was the finance chief at LG Electronics.
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| LG Corp. Vice Chairman Kwon Young-soo |
Under him, LG Chem's battery business saw a massive increase in clients as sizable business agreements were signed with General Motors and other leading carmakers. Now, LG Chem is the world's leading battery supplier. He was also the driving force behind a billion dollar investment from Philips of the Netherlands to create a joint investment LG Philips LCD a few decades ago.
"LG Chairman Koo needs to buy time before taking control of the group which means Kwon's support could continue until then. Given the COO's rich experience in finance and strategy, it's worth seeing what Kwon and the four technology affiliates CEOs' focus and deliverables will be," another LG executive said.
LG Display is currently nowhere to be seen amongst its competitors with regards to market share and profitability; and LG Chem is also expected to see a drop in profits in the fourth quarter of the year. LG U+ and LG Electronics are also facing deep challenges to dig themselves out of the ongoing stagnant business environment.
