Kakao names first female CEO as part of reform to overcome challenges

Chung Shina

Kakao Corp. named Chung Shina, chief executive officer and managing partner at Kakao Ventures Corp., as its new chief, in the South Korean platform giant’s first appointment of a female CEO.

On Wednesday, Kakao named the 48-year-old head of its venture arm as its new CEO as it strives to overhaul the company that is currently facing multiple challenges, including allegations over stock manipulation.

The rapid announcement of a leadership change by Kakao Founder Kim Beom-su, who also chairs the management innovation committee, is a testament to the urgency and necessity of organizational reform.

The nomination marks the beginning of a comprehensive transformation, ranging from leadership changes to restructuring the company, organizational culture, and business practices.

Chung will take on the role of strengthening the headquarter-centric influence based on powerful authority and responsibility, moving away from Kakao’s loose autonomous management style.

As Kakao entered its seventh consecutive week of an emergency management system that has been in place since October 2023, there has been continuous criticism both internally and externally.

Chung will lead the innovation task force that will set the direction for substantial innovation at Kakao and oversee specific tasks. She will also align with Kim to drive an innovation initiative.

The new Kakao CEO has been involved in key business restructuring and innovation agendas since September 2023, serving as the head of business general affairs within the CA consultative body, an independent group within the Kakao Group.

The most urgent task is to streamline the Kakao organization, consisting of over 4,000 employees, and focus on nurturing future core businesses such as artificial intelligence (AI).

Despite being one of Korea’s leading information technology (IT) platform companies, Kakao faces the urgent challenge of innovating its internal systems and managing various risks such as investigations and internal conflicts.

Externally, restoring the company’s image, which has plummeted, is a significant responsibility for Chung.

Anticipation is high for a change in Kakao’s identity, and there are expectations that the company will abandon its previous growth strategy of expanding subsidiaries and delegating substantial authority to subsidiary executives.

There is also speculation about significant personnel changes, including CEOs of subsidiary companies, as multiple Kakao executives, including those from Kakao Entertainment Co. and Kakao Mobility Corp., will finish their terms in March and April 2024.

Addressing the deteriorating profitability of Kakao and devising a strategy to foster future growth drivers such as AI is also an urgent task.

“I will focus more on future core business areas,” Chung said.

With two female CEOs at the head of the country’s two platform giants Naver, which Choi Soo-yeon has headed since March 2022, and Kakao, the competition between the two will continue.

Meanwhile, Hong Eun-taek, the CEO of Kakao who took over as the sole CEO in October 2023 due to the KakaoTalk service disruption, is expected to resign in March 2024.