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.
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“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.”
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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.
