Samsung Compliance Committee Chair: "Role May Change Depending on Lee Jae-yong Trial Outcome"

Next Month's Verdict on Accounting Fraud and Unfair Merger
Chairman's Reappointment "Board of Directors to Decide"
3rd Term Tasks "Control Tower and Governance Improvement"

Lee Chan-hee, Chairman of the Samsung Compliance Monitoring Committee (CMC), stated on the 23rd that the role of the CMC will change depending on the trial outcome of Samsung Electronics Chairman Lee Jae-yong in early next month.

Before the regular meeting in the afternoon, Chairman Lee told reporters, "Although the basic tasks of compliance monitoring will not be affected (after the chairman's trial), there will be some consideration and changes regarding which areas the CMC should focus on," adding, "Since we do not know what the actual outcome will be, it is premature to speak definitively."

The judiciary will deliver a verdict on Chairman Lee's accounting fraud and unfair merger charges on the 5th of next month. Previously, the prosecution sought a sentence of five years in prison and a fine of 500 million won against Chairman Lee.

Chairman Lee cited the establishment of a 'Samsung compliance culture' as the greatest achievement of the CMC's second term. The second term of the CMC ends in early next month.

He said, "If the first term was like an emergency major surgery, the second term was a time to recover stamina and improve the system," adding, "The overall compliance management culture at Samsung has been established, and we were able to make people recognize that compliance is truly important."

Lee Chan-hee, Chairman of the Samsung Compliance Monitoring Committee (Jun-gamhoe), getting out of a car to attend a regular meeting held at the Samsung Life Insurance building in Seocho-gu, Seoul, on the afternoon of the 19th of last month.
[Photo by Yonhap News]

The follow-up tasks for the third term of the CMC are the establishment of a Samsung control tower and governance restructuring. Chairman Lee said, "There will be further progress in all areas," and added, "Efforts to establish a control tower and improve governance will continue."

Regarding whether he will serve a consecutive term as chairman, he said he would follow the independent decision of the board of directors. Chairman Lee stated, "The healthiest way for the company to operate is to guarantee the independence of the board," and added, "If I express my intention to serve another term, it might affect the board's independent decision-making, so I will not comment." He further said, "I believe the board will evaluate the second term of the CMC from the most objective standpoint."

The decision on Chairman Lee's reappointment will be made by the boards of directors of Samsung's seven affiliates (Samsung Electronics, Samsung C&T, Samsung SDI, Samsung Electro-Mechanics, Samsung SDS, Samsung Life Insurance, and Samsung Fire & Marine Insurance). According to regulations, reappointment of the chairman (a two-year term) is possible.

After appointing the chairman for the third term, the committee formation process will proceed immediately. Some members of the second term may be reappointed. The chairman has the authority to nominate members. After candidates are recommended through verification from various sectors of society, the third-term chairman will begin the selection process.