[Exclusive] Samsung Vice Chairman Lee Jae-yong to Be Promoted to Chairman on November 1st, Coinciding with Founding Anniversary

Vice Chairman Appointment After 10 Years
Attention on the Announcement of the 'Second Shin Management' Vision

Lee Jae-yong, Vice Chairman of Samsung Electronics, who was referred to prosecution on charges including accounting fraud and unfair merger, is attending the continuation of the first trial held at the Seoul Central District Court in Seocho-gu, Seoul on the 12th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Park Sun-mi] Samsung Electronics Vice Chairman Lee Jae-yong will be inaugurated as chairman on November 1, coinciding with Samsung Electronics' founding anniversary. This marks 10 years since his promotion to vice chairman in the year-end personnel reshuffle of 2012. It is expected that 'Lee Jae-yong's New Samsung' will begin to reveal its full identity.

According to business circles on the 31st, Vice Chairman Lee Jae-yong will assume the chairmanship on November 1 and announce the vision of the 'Second New Management.' The vision is said to include future development strategies in the system semiconductor sector and large-scale investments in the bio sector.

The 'New Management Declaration' began in June 1993 when the late Chairman Lee Kun-hee summoned all Samsung presidents to Frankfurt, Germany, and ordered a drastic innovation with the phrase, "Change everything except your wife and children." Since 2023 marks the 30th anniversary of the New Management Declaration, it is reported that along with his promotion to chairman, Lee will deliver a new message for the 'New Samsung' and begin full-scale internal reorganization.

Lee’s promotion comes after 10 years. After being promoted to vice chairman in 2012, Lee Jae-yong has effectively served as the head of Samsung Electronics since Chairman Lee Kun-hee suddenly collapsed in 2014, but due to judicial risks, he could not assume the chairman position. With his rehabilitation through a special pardon on Liberation Day this month, the restrictions on employment were lifted, opening the way for his full return to management and promotion to chairman.

Within Samsung, there was a growing sentiment that promoting Lee to chairman, rather than converting him from a non-registered executive to a registered executive who must go through the board of directors and shareholders' meeting, would enhance Samsung’s cohesion and accelerate the pace of change needed to overcome the crisis, given the judicial risks. Since the chairmanship is an internal appointment, no separate shareholders' meeting approval process is required.

In the business community, the possibility of Lee’s promotion to chairman within the year after his rehabilitation has been highly anticipated. Samsung Electronics has pledged to invest 450 trillion won over the next five years in future growth sectors such as semiconductors, bio, and new IT, and to hire 80,000 new employees over five years to expand youth employment. Therefore, it is urgent to prepare detailed strategies to implement these investment and hiring plans.

To overcome the limitations of being trapped in the business framework developed and grown by previous chairmen in home appliances, mobile phones, and semiconductors, a new direction that can transform Samsung into a 'New Samsung' is also necessary. The corporate governance reform, which was initiated in 2013 but stalled, is also considered a task that must accelerate after Lee’s inauguration as chairman.

A business insider said, "Samsung desperately needed change, but the management clock had stopped due to Lee’s absence," adding, "His inauguration as chairman means speeding up the major decisions that have been postponed so far."