Kakao founder vows to make fundamental change amid controversy

Kakao founder Kim Beom-su speaks during a meeting with employees at the company’s Pangyo headquarters in Seongnam, Gyeonggi Province, Monday. Courtesy of Kakao

Kakao founder Kim Beom-su vowed to implement a fundamental reform of the internet company to reconcile its internal and external conflicts and become a socially responsible organization in the AI age following the mobile era, the founder said Monday.

“I intend to reset the expansion-centric management strategy and focus on technology and the core businesses,” the founder said during a meeting with employees at its Pangyo headquarters in Seongnam, Gyeonggi Province. “We will review all businesses from the perspective of not only the current market advantage, but also the potential for future growth, focusing on strengthening the lack of fundamentals rather than quantitative expansion and finding a direction that can earn the trust of society.”

The meeting was held two years and 10 months since he last stood in front of employees. His move is interpreted as an attempt to reconcile conflicts. In October, Bae Jae-hyun, chief investment officer of Kakao, was arrested on suspicion of stock manipulation in connection with the company’s acquisition of SM Entertainment. Kim also had to appear at the Financial Supervisory Service to answer questions related to the case. Also, the company had an internal conflict recently as one of the executives on its alignment council used an offensive word in reference to the disabled during an executives' meeting.

Kim did not mention a specific action plan but said he would overhaul the company’s governance structure.

"I will lead the change to a new Kakao with the will as the head of the management innovation committee. I am prepared to even change the company's name, Kakao,” Kim said. “I will also reform the governance within the group. I will create a structure that strengthens the centripetal force to accelerate the new Kakao, breaking away from the loose autonomous management principle."

By doing so, he said Kakao will become a more socially responsible organization in the AI era following the mobile era and become a company that users can trust.

"I believe that this hard process now will be remembered as an opportunity for Kakao to leap forward one step further when looking back someday. Please gather your strength so that Kakao, which was loved in the mobile era, can once again be loved by the people and contribute to society in the AI era,” Kim said.