Samsung Electronics has agreed to separate the roles of CEO and chairman of its board of directors for the first time in the company’s history, in a decision made on Friday at its general meeting of shareholders in Seoul, South Korea, the company said.
Former Chief Financial Officer Sang-Hoon Lee will be elected to the board and take the role of chairman. The move is intended to enhance board independence and comes as part of a broader shakeup intended to temper the influence of the founding Lee family.
Some 400 shareholders and major executives, including Kwon Oh-hyun, outgoing vice chairman and CEO of the tech giant, attended.
Notable by his absence was Vice Chairman Lee Jae-yong, heir apparent of the sprawling conglomerate, who was released from prison in early February after an appeals court reduced his prison sentence to a suspended term on corruption charges.
He remains on the board, despite a conviction for giving bribes worth more than $3m to a senior presidential aide in a case that brought down President Park Geun-hye.
The company will focus on delivering shareholder value by increasing dividends for 2018 to 2020, it reported in a release.
“I believe this is the right time for a younger leadership to take the helm of the Company to better respond to a rapidly changing global IT industry,” said Chairman Kwon. “I sincerely hope that our shareholders will continue to show unwavering interest and support our new management team.”
The company has come under sustained pressure in recent years to improve board oversight, including from activist shareholder Elliott Singer.
Park Ju-geun, head of watchdog CEO Score, told the FT: “Samsung cannot declare transparent management while [Mr Lee] remains on the board.”
the smartphone-to-chips maker posted a fourth-quarter operating profit of 15.1 trillion won ($14 billion) in Q4 2017, up 64 percent year-on-year, but faces the headwinds of a strong Korean won and ongoing criticism of a top-down management style.