November 25, 2024

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Kakao's CEO nominee Chung Shin-a (Kakao)

While the South Korean IT industry has historically been dominated by male leadership, leading internet giants Naver and Kakao are seeing a new wave of young female leaders taking the helm and steering the ship through challenging waters and toward new horizons.

Kakao named its first female CEO last week as it faces urgent challenges in revamping its corporate culture and management. Industry watchers are paying keen attention to how crucial a role the company's first-ever female leader will play in raising the stakes. Its crosstown rival Naver already made the leap toward female leadership after the management crisis.

Kakao tapped Chung Shin-a, head of Kakao’s venture capital unit Kakao Ventures, as the sole candidate for the top spot. Kakao’s first female CEO nomination shows how desperate the company is for corporate reform, as it faces the worst management crisis since its foundation in 2006.

The 48-year-old Chung will become the new chief if she receives approval from the board of directors and gains a nod from shareholders at a separate meeting slated for the end of March. Chung, together with Kakao founder Kim Beom-su, is known to be meeting with employees starting next month and focusing on hearing about their struggles and suggestions for fundamental reforms.

Industry watchers have a positive view of Chung, since they believe in the importance of a leader who has accumulated experience within the company and for stability amid the current volatility. Since the CEO nominee has a good understanding of Kakao’s circumstances, joining Kakao Ventures in 2014 and being a member of the company's Corporate Alignment Council, she will likely lead the company’s overall makeover.

Observers also projected Chung’s leadership to be a major turning point for Kakao, as Naver succeeded in making a major shift in its management by appointing two female chiefs -- the former CEO Han Seong-sook, who took office in 2017, and the incumbent CEO Choi Soo-yeon.

“Kakao seems to have benchmarked Naver's successful cases. Kakao, which had (previously) insisted on male-dominated leadership, seems seeking innovation outside of its traditional management pattern. It appears to be trying something very new to the firm by welcoming its first female leader,” said Kim Yong-hee, a business professor at Soongsil University.

But some question the agenda behind bringing on a female leader at a time of crisis -- a common strategy known as the “glass cliff,” where women are given jobs in high but precarious positions. Chung should play a role as a “catalyst” for reform, not a “scapegoat,” they say.

“Concerns arise as there have been several cases of appointing female chiefs and passing on responsibility in times of crisis in the global IT industry,” an industry source said, citing Elon Musk’s latest CEO pick for X, formerly known as Twitter, where Linda Yaccarino could be seen as possibly facing such a situation.

"Chung is known to have good capabilities and a reputation for corporate management," the source said.

Naver was the first domestic IT firm to have a female CEO. Starting with former CEO Han Seong-sook for seeking a business settlement in 2017, Naver once again vowed to undertake radical reforms in 2021 after an employee's death due to a workplace bullying incident. Lee Hae-jin, the founder of the nation's largest web portal, suggested bringing in "younger and new leaders" lead the firm as a fundamental and essential solution.

In March of the next year, the company appointed its current CEO Choi, then 40 years old, as its new head. Although prior to her appointment she was not placed in any major executive positions, the CEO prioritized restructuring the corporate culture.

Choi established human rights tasks to systematically manage employees' risks and actively communicate with them. She also introduced a new work system that allows employees to choose their work type as well as set up an in-house psychological counseling center.

"Female leaders often have the advantage of being more fair and transparent. It was a good attempt for Naver to pursue changes using (women leaders') strengths to address the limitations of existing companies where men took leadership. ... Naver's two female CEOs had a clear vision in common, and are leaders of fairness and principles, which was at the forefront of the successful corporate reform measures," said Oh Il-sun, head of the Korea CXO Institute.

By Jie Ye-eun (yeeun@heraldcorp.com)