Expanding Recruitment of Legal Professionals for Business Growth and Regulatory Response
Major Tech Companies Also Reappoint Legal Experts as Outside Directors
Lawyer Kim Seon-wook (left) and Lawyer Kim Chang-bo (right), who are scheduled to be appointed as outside directors of Kakao and SK Telecom at this month's shareholders' meeting.
Domestic tech companies are expanding their business areas and increasingly appointing professional legal experts as outside directors to respond to regulations. Last year, Kakao and SK Telecom, which operated their outside boards without legal professionals, decided to include legal experts specializing in healthcare and fair trade, respectively, in their outside boards starting this year.
Kakao will propose an agenda at the shareholders' meeting on the 26th of this month to appoint Kim Seon-wook, the representative lawyer of the law firm Sesung, as an outside director and a member of the audit committee. Lawyer Kim has built his career as a medical law specialist. He completed a doctoral course in Medical Informatics at Seoul National University Graduate School and served as an advisor and legal counsel for Seoul Asan Medical Center, Samsung Seoul Hospital, and Yonsei University Medical Center.
His background aligns with Kakao's recent focus on the healthcare business. Kakao Healthcare launched the AI-based blood sugar management application "Pasta" last year and has been operating the business with a focus on user acquisition. Recently, it agreed with AIA Life to build a digital healthcare solution.
Despite technological advancements in the digital healthcare market, there are high entry barriers such as legal regulations on personal medical data collection and issues related to the application of health insurance medical fees. At this point, advice from legal professionals is necessary to respond to such medical regulatory environments. Kakao explained, "The recruitment of Lawyer Kim will reduce management risks and help with compliance management."
SK Telecom will also appoint Kim Chang-bo, a fair trade expert, to replace Kim Seok-dong, the former chairman of the Financial Services Commission, whose term as an outside director expires at the shareholders' meeting on the 26th. Lawyer Kim served as the presiding judge for fair trade cases at the Seoul High Court. SKT's recruitment of him is interpreted as a response to the environment where regulations by the Fair Trade Commission have become a management risk factor for telecom companies.
On the 12th, the Fair Trade Commission imposed a fine of 114 billion KRW on the three mobile carriers for collusion, claiming that the sales incentives paid to customers under the Mobile Device Distribution Improvement Act (DanTong Act) created by the Korea Communications Commission were collusive acts. SKT, KT, and LG Uplus are preparing administrative lawsuits against the Fair Trade Commission.
A tech industry insider said, "It is noteworthy that both companies did not have legal professional outside directors for some time," adding, "By adding legal expertise to boards previously composed mainly of technology and management experts, it appears to be a strategy to proactively manage legal risks that may arise during business expansion."
The trend of mandatorily appointing legal professional outside directors can also be seen in other tech companies. Naver reappointed Roh Hyuk-jun, a professor at Seoul National University School of Law; LG Uplus reappointed Nam Hyung-doo, a professor at Yonsei University School of Law; and NCSoft reappointed Jung Kyo-hwa, a lawyer and former judge of the Seoul Administrative Court, as outside directors.
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