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Chung Yong-jin, chairman of Shinsegae Group, will step to the front of accountable management by taking on registered director roles at key affiliates Emart and Shinsegae Property. The move is unusual at a time when other conglomerate chiefs avoid registered directorships to sidestep laws such as the Commercial Act and the Serious Accidents Punishment Act. The decision is read as Chung's determination to personally lead reform and boost performance amid turmoil inside and outside the group stemming from a Starbucks Korea marketing fiasco. Shinsegae Group also named Shin Dong-woo, head of Shinsegae Property's support division, as the new CEO of Starbucks Korea, a position that had been vacant.
On the 8th, Shinsegae Group announced it had named Chung as a co-CEO of both Shinsegae Property and Emart. First, Shinsegae Property will convene a board meeting as early as this month to recommend Chung as a registered director. It then plans to appoint Chung as co-CEO through a shareholders' meeting and board session. Shinsegae Group also named Lee Hyung-cheon, former head of the development division, as a co-CEO of Shinsegae Property. The new co-CEO Lee will lead pressing projects such as Starfield Cheongna alongside Chung.
Chung is also expected to take the post of Emart CEO early next year. The group will name Chung as co-CEO of Emart in regular executive reshuffles to be carried out from September to November this year, and finalize the appointment through next year's shareholders' meeting. Once the procedures are completed, Chung will serve as co-CEO alongside Emart CEO Han Chae-yang. "I take seriously the market's demand to bear clear responsibility for the company's management," Chung said. "Going forward, as CEO, I will be evaluated by the board and shareholders."
As a result, Chung will personally lead both Emart, the group's current cash cow, and Shinsegae Property, a core pillar of future growth in areas such as artificial intelligence (AI). Shinsegae Property is the affiliate driving the group's major development projects; in March this year it signed a memorandum of understanding (MOU) with U.S.-based Reflection AI and is leading the practical work of building an AI data center. The data center, with a capacity of 250 MW, can supply enough power for about 250,000 households to use simultaneously. The industry expects more than 10 trillion won to be invested in building the infrastructure.
Shinsegae Group explained, "Chung personally signed the MOU with Reflection AI, and by taking the helm of Shinsegae Property he will be responsible for both the future and the present of the business portfolio for growth," adding, "If he also takes the title of Emart CEO, the group's foundation, he will be standing in a position that leads and is evaluated on both the group's present and future."
Chung's dual CEO roles also carry the meaning of taking responsibility for the turmoil inside and outside the group caused by Starbucks Korea's "Tank Day" marketing. Emart is the largest shareholder, holding a 67.5% stake in Starbucks Korea. During a public apology on the 26th of last month, Chung urged an end to criticism of Starbucks store employees and stressed, "All responsibility lies with me."
In business circles, reactions to Chung's CEO move have called it unusual, as the number of registered directorships held by conglomerate owner families has been declining. According to a Leaders Index report, registered executive posts held by chiefs of 49 domestic groups fell 14.5% from 117 in 2020 to 100 last year. This is because legislation strengthening the legal liability of registered directors over accidents and shareholder protection issues has come one after another in recent years.
Once Chung becomes CEO of Emart and Shinsegae Property, the number of group affiliates whose boards he sits on will increase to three in total, including AG Global Holdings, the largest shareholder of Gmarket. Shinsegae said, "An owner's dual CEO role is not something that can be decided in a few weeks, so we have been reviewing it for a long time," adding, "After the Starbucks incident, we made the final judgment that it was time to strengthen accountable management."
Shinsegae Group named Shin Dong-woo, head (executive director) of the finance division in Shinsegae's strategy office, as CEO of Starbucks Korea. After the Starbucks marketing fiasco, Chung reportedly chose Shin as the right person after searching for someone with both the ability to manage internal cleanup and the external sales capability to respond to customer churn. Working in Shinsegae Group's strategy office, Shin is regarded as someone who closely understands Chung's management philosophy. He served as head of strategic planning at Starbucks Korea from November 2023 to February last year, making him well-versed in internal affairs. During his time at SSG.com in 2022, he also led sales.
