“Lee Jae-yong, Chairman of the Board of Directors instead of Samsung Chairman Special Lecture by Samsung Compliance Committee

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The first message that Samsung Electronics Vice Chairman Lee Jae-yong, who was imprisoned at the ruling and repatriation of the Gukjeong Nongdan, was’supporting the continued activities of the Samsung Compliance Committee (Compliance Committee)’ last month. At the time, through the lawyers, Chairman Lee said, “I will continue to support the activities of the Compliance Committee,” and urged the compliance committee chairman and members to continue to fulfill their natural roles in the future.

While the Compliance Committee, which celebrated its 1st anniversary, is scheduled to hold a regular meeting on February 16th, in order to establish long-term growth and compliance management of the Samsung Group, after expanding its authority and converting the Samsung Group into a holding company, Vice Chairman Lee became the Chairman of the Board It was argued that it was the best way to take on it.

Lee Han-sang, a professor at the Department of Business Administration at Korea University, made such a claim by recently revealing the contents of a lecture by the Samsung Compliance Committee (Compliance Committee) held on the 11th of last month. In a lecture at the time, Professor Lee shared his thoughts on the improvement of Samsung’s governance structure, limitations of the Compliance Committee, and the role of Vice Chairman Lee for about 40 minutes. On the 18th of last month, a week after the lecture, the court of revocation of the revocation court evaluated the ineffectiveness of the Compliance Committee and sentenced Vice-Chairman Lee to two years and six months in prison.

First, he pointed out that the compliance committee, which was created at the request of the judges, should have clear legal authority and grounds for the far range. Professor Lee said, “In order for the Compliance Committee to prevent and monitor illegal acts related to succession of management, it must be able to define possible misconduct and take appropriate measures if the possibility is recognized.” “There is no way to make it effective except for political gestures such as public opinion and pressure to resign.”

In addition, he insisted that core affiliates, such as Samsung Biologics, Samsung Bioepis, and Samsung Securities, who are in charge of succession and merger related affairs should be included in the scope of affiliates of the Compliance Committee. The establishment of the Compliance Committee is based on agreements made by seven affiliates, including Samsung Electronics, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung C&T, Samsung Life Insurance, and Samsung Fire & Marine Insurance.

In the end, in order for the compliance committee’s decision to take effect, all the compliance committee members must be outside directors and audit committee members of each affiliate, including Samsung Electronics and Samsung Biologics. Professor Lee said, “With the revision of the Commercial Law, the audit committee members can freely engage in independent activities relatively free from the breath of the largest shareholder,” said Professor Lee. “After the compliance committee became an outside director and audit committee member of each affiliate, the chairman of the Compliance and Governance Committee “You have to have a practical legal authority to take on the job,” he argued.

What’s eye-catching is the proposal that Vice Chairman Lee should serve as the chairman of the board of directors of the holding company and conduct board-centered management. “I disagree with the universal theory of chaebol reform that the chaebol are the cause of all problems, and I disagree with the idea that good standards exist in corporate governance,” he said. “The chaebol are not a target to overthrow or dismantle, but are used well for the national economy. It started with the premise that it was a strategic asset that should be done.

In the long term, after organizing the Samsung Group in the form of a holding company and a business company, Vice Chairman Lee suggested that the board of directors-centered management should be considered as chairman of the board of directors of the holding company. First of all, Professor Lee said, “There are few options left for Vice Chairman Lee, and it would be a difficult choice to endure the stake and maintain the succession structure.” “He said.

What Professor Lee emphasized is a method in which Vice Chairman Lee serves as the Chairman of the Board of Directors and reorganizes the former offices and current project support TFs into the Secretariat of the Board. He said, “In the past few years, the role of Vice Chairman Lee was essentially like the representative of the shareholders in that he could not be responsible for making management decisions,” he said. “Vice Chairman Lee does not have to be the management of the business company.” He said, “If you become the chairman of the board of directors and operate a powerful board secretariat, you can thoroughly monitor various projects, as well as major decisions, namely investment decisions and business acquisition decisions,” he said. In addition, “The transition to a holding company is easy because the corporate value of Samsung Electronics has grown too large, the demand for ownership of the holding company has increased, and even if you want to use Samsung Life as an intermediate holding company, the Samsung Life Insurance Act can hold back any time. “It’s not a job,” he said. “It can be the best way to promote the long-term growth of the company, support the maintenance of the family, and exert influence without succeeding as Vice Chairman Lee promised.”

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