hankyoreh

LG Honorary Chairman Koo Ja-kyung at a factory in Gwangju in April 1985. 

The LG Group has passed into its fourth generation of management while continuing to abide by a conservative rule of succession to the oldest son, from the foundation of Lak Hui Chemical Industrial in 1947 and GoldStar in 1950 to its current incarnation with LG Chem and LG Electronics. The ruling Koo family is also noted for the relative lack of conflict when it spun off with its industry partners in the Huh family into LG and GS.

LG Honorary Chairman Koo Ja-kyung, who passed away on Dec. 14, became the group’s second chairman in 1970, shortly after its founder and inaugural chairman Koo In-hwoi passed away in December 1969. The oldest male among six sons and four daughters, Koo Ja-kyung turned 45 that year. Twenty-five years later in 1995, he declared at the age of 70 that he was stepping down as chairman to make way for a changing of the generational guard. It was a refreshing development for the business world -- the first-ever “unblemished” succession at one of South Korea’s chaebol groups. He was joined in stepping down by veteran members of his team who had been chosen as “founding members.” It was a gesture intended to reduce the burden on his successor.

Koo was replaced as third chairman by his oldest son Koo Bon-moo, who passed away in May 2018. Koo Bon-moo started as a department director and acquired over two decades of practical experience before becoming chairman in 1995. In 2004, he adopted current LG Chairman Koo Kwang-mo, the son of his own younger brother, Heesung Group Chairman Koo Bon-neung. His aim was to uphold the Koo family’s rule of succession to oldest sons after losing his own only son in a 1994 accident. Koo Bon-moo also had two daughters. After his death last year, Koo Kwang-mo became the fourth chairman at the age of 40. LG’s rule of succession to oldest son has been both lauded as the reason the group has avoided the kind of strife seen with other chaebol families and denounced as a “backward” and “anachronistic” practice that excluded women from a management role -- a case of conservative traditions receiving greater emphasis in the “bloodline-centered” management practices of South Korea’s chaebol families.

In 2004, the Koo family spun off LG and GS as separate entities after an industry partnership with the GS Group’s Huh family that had lasted since Koo In-hwoi’s time as inaugural chairman. The arrangement was one where the Koos assumed responsibility for electronics, chemicals, and communications, while the Huhs took on areas including oil refining, distribution, home shopping, and construction. Their industry partnership was considered unusual enough, but the lack of animosity in the spinoff process drew major attention in the business world. LG explained that it was in keeping with the wishes of Koo In-hwoi, who declared, “Once you have a friend, you should not part -- and if you must part, do not become enemies.”

By Song Gyung-hwa, staff reporter

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