On the evening of Jan. 15, LG chairman Koo Bon-moo appeared as determined as ever.

“Let the brand LG become the symbol of innovation, the true ‘first class’ that lives forever,” he told a group of company executives at a dinner party.

“We have had hard times but managed to overcome them. Let that become our motive for a better future,” he said. Koo led 40 top executives of the group on a two-day training session before the dinner and stressed innovation. 

This is his 20th anniversary at the helm of the country’s fourth-largest business conglomerate by asset. This year also marks the company’s 20th anniversary of changing its name to LG from Lucky Goldstar.

Innovation seems to have been the key to Koo’s management from the start.

LG may have started as a household goods company in 1941 by his grandfather Koo In-hoe and his business partner Hur Jun-koo, but it turned into a trend-setting high-tech empire with 150 trillion won ($138 billion) in sales reported last year under Bon-moo’s leadership.

After announcing a 60 trillion won investment into the so-called future business in 1997, LG Display has stepped up to the No. 1 position in the large LCD manufacturing industry and LG Chemical is also showing remarkable success in the mid to large secondary cell business. The company has seen electric vehicle battery sales grow tenfold in five years, posting 600 billion won in 2014 from 60 billion won in 2009.

In 2003, he set up a holdings company for the first time in Korea’s large business conglomerate’s history to get rid of the group’s cyclical shareholding system, a scheme that is often blamed for the chaebol’s lack of management transparency.

Koo also announced that he would hire professional CEOs rather than his kin. Except for his younger brother Koo Bon-joon, who is vice chairman of LG Electronics, nearly all CEO positions are held by professional managers.

But this doesn’t mean that everything has been rosy for Koo.

The company’s semiconductor unit, in which Koo planned to pour 18 trillion won of the 60 trillion won investment announced in 1997, was sold to then Hyundai Electronics as part of the government’s chaebol streamlining and efficiency project. The semiconductor unit has constantly been linked to LG over the past 17 years but has finally landed with SK, another business empire.

“The loss of the semiconductor unit will forever be a scar for Koo,” a business insider said.

The slow growth of the telecommunications and mobile phone markets is also painful.

LG Uplus has remained the weakest of the three domestic telecommunications service providers. In smartphone hardware, LG’s global market share slipped to fifth place in the third quarter of 2014 following Samsung, Apple, Xiaomi and Lenovo, from the previous third place a couple of years ago, according to IDC research firm.

Koo is now 70, the same age as his father when he passed on the business empire to him. Bon-moo’s son Kwang-mo was recently promoted as senior executive and emerged as the crown prince.

“When LG Group was divided largely into pan-LG companies owned by the Lee clan and pan-GS businesses taken by the Hur family in 2005, not many people thought LG would go this far. Continuing this success will be the key for Koo Bon-moo and his son,” an LG insider said.

By Bae Ji-sook (baejisook@heraldcorp.com)