Since the 1930s, control over Samsung has been a birthright, passed down from founder Lee Byung-chull to his descendents. That changed in a big way this week.
In a surprising revelation, Samsung's heir-apparent Lee Jae-yong said that he won't pass the reins to his children when his time comes to retire. The 51-year-old Lee made the comment alongside an apology for getting caught up in a succession plot that included a bribery conviction after he allegedly attempted to ensure control of Samsung would pass from his father and chairman Lee Kun-hee.
"I will not pass the company's managerial rights to my children," he said in an interview with The Korean Herald. "I have thought about it for a long time, but was hesitant about making it public."
Lee was convicted of perjury, embezzlement, and bribery in 2017 and served one year of a five-year sentence before the ruling was overturned. The court is now planning to make a decision on whether the ruling should be upheld and if Lee should be returned to jail.
Still, the implications of Lee's comments are major. Samsung, which is the largest company in Korea with a slew of divisions across a variety of industries, is critical to the country's economic success. It's also been managed and operated by the Lee family since it started as a grocery store in the 1930s.
Lee didn't say why he wouldn't pass control over the company to his children, but the decision is instructive for business owners considering their own succession planning. For some CEOs, it's may be desirable to consider giving the reins to one's children, but there are clearly times when that decision isn't right. And one could argue that the Lee family's recent scandals make passing the power to the next generation generally unpalatable.
Indeed, for companies as big and as important as Samsung, making sound decisions on succession are crucial, but the stakes are just as high in smaller companies.
Looking ahead, it's unclear what Lee's decision will mean for Samsung and who may ultimately take over the top job. At 51, Lee doesn't seem to be planning to leave Samsung anytime soon. And while his comments suggest a shift in strategy, he could easily revert back to family control in the future.