Regular Meeting at Seocho Headquarters on the 20th "Continued Discussion on Governance"
Speculation Grows Over Inclusion of 'Control Tower' Content
Lee Chan-hee, the newly appointed chairman of the Samsung Compliance Committee, speaking at a press conference held at the law firm Yulchon in Gangnam-gu, Seoul, on the morning of January 26. (Photo by Yonhap News)
[Asia Economy Reporter Moon Chaeseok] The Samsung Compliance Committee will hold its September regular meeting at 2 p.m. on the 20th at the Samsung Seocho Building. Attention is focused on whether there will be any mention of the reconstruction of the 'control tower,' which is regarded as a key part of Samsung Group's corporate governance restructuring efforts. There is speculation that the control tower might be included as a 'special agenda item' rather than a 'general agenda' such as internal transactions. There is also an optimistic outlook that the independent Compliance Committee, separate from the group, will help strengthen the group's organizational reconstruction by addressing judicial risks related to the control tower, similar to the former Future Strategy Office (Mijeonsil).
According to sources in the business community on the day, the Compliance Committee will hold the September regular meeting with Chairman Lee Chan-hee and other members in attendance. They plan to review and provide opinions on the approval of internal transaction agendas and the handling of reports and tips. Since the Compliance Committee's launch, Samsung Group has been following a prior approval procedure from the committee for internal transactions between affiliates exceeding 5 billion KRW.
There is also interest in whether special agenda items such as the reconstruction of the control tower will be discussed. Speculation is rising that Samsung Group will accelerate merger and acquisition (M&A) discussions following Vice Chairman Lee Jae-yong's pardon and reinstatement on Liberation Day, amid business community opinions emphasizing the necessity of a control tower to enhance the efficiency of future business investments and decision-making for Samsung, which oversees about 50 affiliates. The Compliance Committee also stated at its first regular meeting after Lee’s reinstatement last month that it would "listen to diverse advice from external experts and internal members and propose reasonable solutions" regarding Samsung Group's corporate governance improvement.
However, when asked by reporters whether special agenda items such as the control tower reconstruction would be discussed at the regular meeting, a Compliance Committee official said, "It is difficult to confirm," adding, "As Chairman Lee mentioned, issues like the control tower and corporate governance improvement are ongoing topics that need continuous discussion, regardless of whether they are included in the agenda for the day."
The official added, "Currently, a judicial support task force (TF) has been established, and we are aware of the business community's claims that a comprehensive control tower like the Mijeonsil is necessary," and said, "While the Compliance Committee is not in a position to dictate whether the group should establish such a structure, since it relates to the overall governance restructuring of the group, discussions will continue."
According to Samsung Group, three companies?Samsung Electronics, Samsung C&T, and Samsung Life Insurance?have formed a TF and requested consulting from Boston Consulting Group (BCG) on a sustainable management system. A Compliance Committee official responded regarding the BCG consulting report, saying, "The full version has not yet been released." There is speculation in some business circles that BCG has already delivered a report to the Compliance Committee, but the committee did not confirm whether this was the case on the day.
Regarding the question of whether Samsung Group or the Compliance Committee commissioned BCG, or whether BCG independently included the control tower consulting, a Compliance Committee official stated, "There is no need for Samsung Group or the Compliance Committee to follow the consulting contents 100%; it is only a reference," adding, "Samsung's top management will discuss the contents, and the Compliance Committee will properly perform its compliance monitoring function to ensure there are no legal risks during that process." The official further said, "At this point, since the full text of the BCG consulting report has not been released, it is difficult to confirm whether it includes control tower content."
The second-term Compliance Committee, launched in February, has identified "realizing ESG (environment, social, governance) management through corporate governance improvement" as one of its three main focus tasks and is currently promoting Samsung Group's corporate governance improvement efforts. Chairman Lee also emphasized at the launch press conference that "corporate governance improvement is a task Samsung must solve to leap forward." Discussions on Samsung Group's corporate governance restructuring are divided into ownership structure reform and succession methods, and the Compliance Committee plans to strengthen its role in monitoring compliance management in preparation for the corporate governance restructuring work that is expected to accelerate following Vice Chairman Lee’s reinstatement.
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