Samsung separates board chairman and CEO roles
Kwon Oh-hyun, outgoing chairman of Samsung Electronics' board of directors, speaks during a general meeting of shareholders at Samsung headquarters in Seocho, Seoul, Friday. / Courtesy of Samsung Electronics
By Jun Ji-hye
Samsung Electronics has decided to separate the roles of chairman of the board of directors and chief executive for the first time since its foundation, in a bid to enhance board independence.
The decision was made during a general meeting of shareholders in Seoul, Friday.
About 400 stockholders and major executives, including Kwon Oh-hyun, outgoing vice chairman and CEO of the tech giant, who has chaired the board, attended.
Vice Chairman Lee Jae-yong, heir apparent of the Samsung conglomerate, did not attend. He has remained low key since being released from prison in early February after an appeals court reduced his prison sentence to a suspended term on corruption charges. A Supreme Court trial is expected to take place this summer at the earliest.
During the gathering, Kwon said: “We plan to separate the board chairman and the CEO roles to strengthen responsible management, with the board as the center, and boost independence of the board.”
Through the measure, the board would be able to assess management performance more objectively and raise trust among shareholders, Kwon said, noting that this would make the board a more efficient decision-making body.
Toward that end, the meeting of stockholders approved the appointment of former Chief Financial Officer (CFO) Lee Sang-hoon as board chairman succeeding Kwon.
Lee assumed the CFO position in 2012 but stepped down on Oct 31. Though he took a step back from management at the time, he was recommended as Kwon's successor by outside directors.
The meeting also named the new heads of the three divisions _ Kim Ki-nam, CEO of device solutions; Kim Hyun-suk, CEO of consumer electronics; and Koh Dong-jin, CEO of IT & mobile communications _ to the board.
The three were appointed to the posts late last year when Samsung announced the appointments of executive-level positions, replacing Kwon, Yoon Boo-keun and Shin Jong-kyun. The new leadership was seen as a symbolic shift in generations through the replacement of longtime loyalists to Samsung Chairman Lee Kun-hee.
The appointment of three new outside directors, including a foreigner and a woman, was also approved at the shareholders' meeting, a move construed as the company intending to secure diversity and international competiveness.
The three are Kim Jeong-hoon, a Korean-born U.S. technology entrepreneur who currently serves as executive chairman of Kiswe Mobile; Kim Sun-wook, a law professor at Ewha Womans University; and Park Byung-gook, a professor of electrical engineering at Seoul National University. This increased the number of Samsung Electronics' independent directors to six from five.
Born in 1960 in Seoul, Kim Jeong-hoon moved to the United States in 1975 and acquired U.S. citizenship. He served in the U.S. Navy for seven years and as president of Bell Labs from 2005 to 2013.
During the Park Geun-hye government, he was nominated to head the Ministry of Science, ICT and Future Planning, the predecessor of the Ministry of Science and ICT, but stepped down due to a controversy at the time over his dual citizenship.
Kim Sun-wook was the nation's first female government legislation minister who served under the Roh Moo-hyun administration. She also was president of Ewha Womans University.
The shareholders' meeting also approved a 50-to-1 stock split, which the company said will boost shareholder value and allow easier access for retail investors.