Samsung Group bolsters role of outside directors

Samsung Group is accelerating efforts to strengthen the role of outside directors in line with the intention of Lee Jae-yong, executive chairman of Samsung Electronics and de facto leader of Samsung Group, who has emphasized responsible management centered on the board of directors, the group said Thursday.

The nation’s largest conglomerate said Samsung SDI and Samsung SDS decided to introduce a system of senior outside directors at their board meetings held on Thursday.

Samsung said this system selects a senior outside director who represents the external directors of its affiliates to ensure an appropriate balance of management when a CEO or an inside director also plays the role of board chair.

The group added that the system is expected to enhance the independence and status of the board of directors as senior outside directors have the authority to convene and preside over meetings of outside directors, and they may also request reports from management on major issues.

Samsung affiliates that do not currently have outside directors as board chairs are also considering introducing the system of senior outside directors.

Eight affiliates ― Samsung Electronics, Samsung Electro-Mechanics, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Securities, Samsung Card, Samsung Asset Management and Samsung C&T ― already have outside directors as board chairs and are not subject to the introduction of the system of senior outside directors.

Samsung's introduction of the senior outside director system is a step towards improving corporate governance, enhancing transparency and expanding communication with the board of directors.

“The senior outside director system is not currently mandatory for non-financial companies under the law here, but Samsung proactively adopted the system in order to actively accept diverse opinions from outside,” the group said.

Introduction of the system is also seen as a reflection of the management philosophy of the Samsung leader, who has emphasized board-centered responsible management. Lee will celebrate his first anniversary as executive chairman of Samsung Electronics on Friday.