Koo Bon Moo
Investors frustrated by the lack of chaebol reform in South Korea can find hope in Koo Bon Moo's bold move in March. The 55-year-old chairman of LG Group, Korea's third-largest conglomerate, agreed to fill half the eight-member boardroom at its Internet and telecom flagship, Dacom Corp., with independent directors. It's the first time outsiders have had a say in the management of an LG company. To make sure Dacom is run as an accountable, independent company, Koo also agreed to let the outside directors control its audit committee, with power to block transactions with its affiliates.
Dacom stands out as a model for improving corporate transparency and shareholder rights. By bringing in outsiders, Koo is sending a strong message that there will be an end to a chaebol practice that's outrageous to Western investors: shifting money from a profitable unit to bail out weak affiliates controlled by founding families. "Dacom will continue to better its governance system and management transparency," Koo pledges. "Other LG Group units will take similar steps in the future."
Koo, who prefers to dress casually and is generally media-shy, is an avid bird watcher who keeps a telescope in his office so he can peer at the birds on a tiny islet in the Han River that runs through Seoul. He studied business administration at Ashland University in Ohio, and then honed his management skills for 20 years at LG Chemical and LG Electronics before he took over LG's helm in 1995. He immediately pledged to promote openness and transparency. A year later, he unveiled a reform plan placing emphasis on profitability and shareholder value, instead of expansion at any cost.
Koo has followed through at Dacom, which he took over in January after a fight for control with another chaebol. He immediately set up talks with shareholder activists to hear and accept their recommendations aimed at establishing a "global-standard" corporate governance system. Explained Koo shortly after taking the helm: "Our society has learned a lot of lessons from the recent economic crisis. But what we businessmen must pay attention to is changing the corporate governance system."