Short-term disruptions inevitable in M&A drive, global outreach: experts
Following the sudden passing of Samsung Electronics Vice Chairman Han Jong-hee, concerns are rising over the impact of a leadership vacuum in the company’s electronics and consumer device business -- now left under the sole leadership of its semiconductor chief.
Industry experts say the unexpected absence of one leader in Samsung’s two-CEO system will inevitably present immediate challenges. However, they believe the impact is likely to be short-term, as the company is expected to appoint a successor.
At the same time, some suggest that Samsung should consider restructuring its “two-pillar” management system—in which two top-level CEOs oversee separate business sectors — to reduce the risk of future leadership voids.
On Tuesday, Han passed away from a heart attack, prompting shock and sorrow over the loss of a towering figure in Korean tech. In response, Samsung announced via a regulatory filing that Vice Chairman and Co-CEO Jun Young-hyun will now serve as the company’s sole CEO.
The late Han led Samsung’s Device eXperience (DX) Division, overseeing its electronics and consumer device businesses, including TVs and smartphones. Jun, meanwhile, leads the Device Solutions (DS) Division, which encompasses Samsung’s semiconductor operations.
“Since Han was one of the two CEOs, a leadership gap is inevitable. But the overall impact will likely be limited, as Samsung is expected to have contingency plans in place,” said Park Joo-geun, head of corporate tracker CEO Score.
Oh Il-sun, director at the CXO Research Institute, echoed that view, noting that Samsung likely maintains a “pipeline” of CEO candidates through its internal leadership development program.
“When Apple’s late founder and CEO Steve Jobs passed away in 2011, many believed he was irreplaceable. Yet Apple has continued to thrive under Tim Cook, the professional executive who succeeded him,” Oh said.
“Samsung may not find someone who fully matches Han’s capabilities, but as a global company, it should have a suitable replacement. If the vacancy leads to serious problems, it suggests a failure in talent development.”
Starting his career at Samsung Electronics as an engineer in 1988, Han rose through the ranks to become vice chairman and head of the DX division in 2021. He was named Co-CEO in 2022, alongside Kyung Kye-hyun, then head of the DS Division.
Analysts expect short-term disruptions, especially given Han’s active role in representing Samsung and engaging with key partners. He was known for his packed overseas schedules, reportedly attending three to four business meetings during dinner hours alone.
The company’s merger and acquisition efforts could also lose momentum, as Han was seen as a key figure spearheading those plans. At last week’s regular shareholders’ meeting, he had reaffirmed the company’s commitment to pursuing a large-scale M&A deal to fuel future growth.
Oh suggested Samsung consider restructuring its two-CEO system by appointing multiple CEOs for each major business segment — such as smartphones, TVs, memory chips, and foundry operations — while placing a top executive above them to oversee group-wide management. This model was used by the late Chairman Lee Kun-hee during his tenure.
Currently, the DX Division consists of several business units, including TVs and other home appliances, smartphones, and medical devices.
The DS Division also includes various units focused on memory chips, logic chips, and foundry businesses.
These units are overseen by president-level executives, who report to their respective division CEOs.
“Samsung has such diverse businesses under one roof that a leader from one area might not fully grasp the complexities of another,” Oh said.
“Appointing multiple CEOs with a top leader to oversee them can reduce the risk of leadership gaps.”
How Samsung weathers this leadership crisis may ultimately depend on its leader, Chairman Lee Jae-yong.
“Under Korea’s chaebol system, owners are often said to handle about 15 percent of actual management responsibilities — including making key executive appointments,” Oh said.
herim@heraldcorp.com
