Samsung Compliance Chief Lee Chanhee: "Labor-Management Relations Are a Major Hurdle Samsung Must Overcome...We Will Strengthen Communication"

Presents governance restructuring plans as fourth term begins
Announces plans to strengthen communication with the union
"The Compliance Committee is a springboard for corporate growth"

On the 24th, Lee Chanhee, chair of the Samsung Compliance Committee, once again expressed the view that it would be desirable, from a corporate governance perspective, for Samsung Electronics Chairman Lee Jae-yong to return as a registered board director. He cited close communication in labor-management relations and improvements to the vertical governance structure as key tasks for the fourth-term Compliance Committee, which was launched on the 5th.

Lee Chanhee, chair of the Samsung Compliance Committee, is answering reporters' questions as he attends the committee's regular meeting on the 26th at Samsung Life Seocho Tower in Seocho-gu, Seoul. Yonhap News

"Chairman Lee Jae-yong should, in principle, be at the forefront of management"

Meeting with reporters on this day at Samsung Life’s Seocho office building in Seocho-gu, Seoul, Chair Lee commented on the fact that Chairman Lee’s return as a registered director did not materialize, saying, “Personally, I think it would be better for him to take the helm at the forefront of management as a registered executive.” He added, “There may be various considerations within the company, but from the standpoint of corporate governance, I continue to believe that it is desirable for him to step directly into the front line of management as a registered executive and practice responsible management.” The agenda item regarding Chairman Lee’s return as a registered director was not submitted to the 57th Samsung Electronics shareholders’ meeting to be held on March 18.

However, Chair Lee noted that this discussion is still only a matter being discussed within the committee, and has not yet reached the stage of being formally resolved and delivered to Samsung. He explained, “Many committee members have formed a certain level of consensus,” but added, “We have not yet decided internally to make this an item for resolution and convey it to the company; we are in the process of gathering opinions individually.”

"Labor-management relations are a major hurdle Samsung must overcome"...signals stronger communication

He also emphasized the role of the Compliance Committee regarding the new phase in labor-management relations, following the recent formation at Samsung Electronics of the first single majority labor union. Chair Lee said, “Among the many hurdles Samsung must overcome, a major one is labor-management relations,” and stressed, “During the fourth term, we will strive to communicate more closely with the union.”

In particular, regarding the current deadlock in negotiations over wages and collective bargaining agreements, he said, “Mutual concessions are necessary,” and added, “We will work closely with the union and study ways to bridge the gap in positions.” He explained that the decision to bring in a large number of new committee members who are experts in labor, human resources, and organizational affairs for this fourth-term Compliance Committee was also aimed at strengthening expertise to resolve these labor-management issues.

Chair Lee also presented a concrete blueprint for how the fourth-term Compliance Committee will be run. He plans to continue strengthening the independence of the board of directors and enhancing the substance of the work performed by compliance officers, while also tackling the issue of governance restructuring head-on. He stated, “We will continue to seek solutions for the vertical governance structure that is linked through the Insurance Business Act.”

On the question of whether the Compliance Committee should continue to exist, he made it clear that it is “an essential body for corporate growth.” Chair Lee said, “There was once a view that the Compliance Committee was merely an organization to defend against litigation, but its scope of work is now expanding and becoming more substantive,” and emphasized, “It will not function as a body for litigation, but will serve as a platform for corporate growth through compliance management.”