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| A Samsung flag is seen at the company's headquarters in southern Seoul / Korea Times file |
By Kim Bo-eun
Samsung has a number of urgent tasks to address, such as pursuing sizable acquisition deals to maintain its competitiveness and investing to scale up its foundry production in the U.S.
But beyond a business standpoint, another key task is to change its governance structure, not only to boost efficiency but also to ensure Samsung's leadership abides by the law.
Samsung faces greater legal scrutiny due to a major scandal involving impeached President Park and her confidant Choi Soon-sil that was unveiled in 2016, for which Samsung chief Lee Jae-yong was imprisoned but released on parole last month. Lee had been convicted of bribery in return for the former president's help in smoothing his leadership succession from his late father Lee Kun-hee. All eyes will be on Lee following his release on parole to ensure the company complies with the law.
Samsung's corporate strategy office, better known as its "control tower" that took control of all matters relating to Samsung's owners, was disbanded following the scandal.
Dozens of Samsung affiliates operate without official centralized control. Three key affiliates ― the main electronics unit, the life insurer and construction arm C&T ― each operate a taskforce that partly takes the role of the control tower. This has posed difficulties for the group. Samsung is now reviewing setting up another control tower.
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| Samsung Electronics Vice Chairman Lee Jae-yong / Korea Times file |
Samsung last year requested Boston Consulting Group (BCG) to provide assistance for the possible reorganization. BCG is known to have referred to overseas cases of large businesses overhauling their governance.
A compliance committee set up last year to comply with a court order is also looking into the matter to ensure legal violations do not arise.
"Issues related to succession are one of the three key areas we are monitoring," a spokesperson for the committee said Monday. "The committee's role is to ensure that ownership matters are decided within the frames of abidance to the law."
Given Lee stated in May last year he would not have his children succeed his leadership, the vice chairman is seeking to find a way for Samsung's leadership and ownership structure to be changed going forward.
The committee is set to review BCG's proposal once it is completed. The committee also requested Korea University's Governance Structure Research Institute to publish a study on the risks of top executives violating the law, to utilize this in its advisory activities.
The committee is overseeing legal matters of seven affiliates ― Samsung Electronics, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung Life, Samsung C&T and Samsung Fire & Marine Insurance. It is comprised of one Samsung executive and six outside figures, including those with legal backgrounds and those representing academia.
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