Prepared Multilateral Recommendations in Just Three Meetings... Samsung Compliance Committee's Aggressive Moves

Kim Ji-hyung, Chairman of the Samsung Compliance Committee, is presiding over the '1st Meeting of the Samsung Compliance Committee' held on the 5th at Samsung Life Seocho Tower in Seocho-gu, Seoul. The Samsung Compliance Committee is an external independent organization established to eradicate illegal activities by executives and employees, including CEOs of major Samsung affiliates, and to strengthen compliance management. Photo by Kang Jin-hyung aymsdream@

The Samsung Compliance Committee, launched earlier this year, is making rapid progress by preparing multifaceted recommendations on labor unions, succession, and communication with civic groups after just three meetings.

This proactive approach is interpreted as the Compliance Committee members’ intention to dispel concerns from some civic organizations and political circles about whether the committee would operate properly and to stabilize its activities.

The Compliance Committee plans to make various efforts to maintain its independence and activate its monitoring functions going forward.

Samsung's 2020 Focus 'Compliance Management'... Compliance Committee Achieves Group-Level First Apology After Two Meetings

Samsung Group’s focus this year is compliance management. In January, Samsung Electronics Vice Chairman Lee Jae-yong visited the semiconductor research center at the Hwaseong plant in Gyeonggi Province as his first management activity of the new year, saying, “Let us boldly discard wrong practices and incidents and pioneer a new future,” and “Let us remember that sharing with our neighbors and society and growing together is our mission and the path to becoming a 100-year company.”

A few days later, Samsung established a Compliance Committee for compliance management of its major affiliates and appointed former Supreme Court Justice Kim Ji-hyung as chairman. Chairman Kim immediately joined forces with experts from the legal profession, civil society, and academia. External members include ▲ Ko Gye-hyun, founding secretary-general of the Citizens' Coalition for Consumer Sovereignty ▲ Kwon Tae-seon, co-representative of the Civic Solidarity Alliance ▲ Kim Woo-jin, professor of business administration at Seoul National University Graduate School of Business ▲ Bong Wook, former deputy chief prosecutor at the Supreme Prosecutors' Office ▲ Shim In-sook, professor at Chung-Ang University Law School. Internal members include Lee In-yong, Samsung Electronics CR officer, who was appointed as the inaugural Compliance Committee member and is actively participating.

At the first and second Compliance Committee meetings held on the 5th and 13th of last month, respectively, the committee finalized internal regulations and conducted pre- and post-review of Samsung’s external sponsorship funds and internal transactions. To lay the groundwork for its activities, the Compliance Committee is also actively working on staffing the secretariat and developing a website to receive reports related to compliance issues. Previously, the committee formed the secretariat and appointed Shim Hee-jung, a lawyer from the law firm Jipyung, as the secretary-general, and Park Jun-young, CEO of Cross Culture, as the media communication officer to promote and communicate the committee’s activities. In particular, to protect whistleblowers’ anonymity, the committee plans to outsource the anonymous reporting system on the website to an external specialized company for operation.

Notably, at the second meeting, the Compliance Committee secured a group-level apology regarding the unauthorized review of civic group sponsorship funds by employees of Samsung’s Future Strategy Office in 2013. Samsung’s 17 affiliates apologized to progressive civic groups and their members, who had been labeled as employees and subversive organizations, stating, “We will take responsibility from the management and lead the establishment of countermeasures to ensure that such incidents never recur, thoroughly and sincerely implement them, and fundamentally change our internal structure and culture.”

Compliance Committee Approves Multifaceted Recommendations at Third Meeting... Aims to 'End Concerns' and 'Settle Monitoring Functions'

At the third meeting held on the 7th of this month, the Compliance Committee set a plan to make recommendations to Samsung management regarding labor unions. Labor unions have recently been actively established within the group, including Samsung Electronics, Samsung C&T, and Samsung Display. Chairman Kim is preparing recommendations that include specific measures for cooperation with labor unions.

The Compliance Committee is also preparing recommendations to improve communication with civic groups, which it found lacking. According to a committee official, “The Compliance Committee judged that incidents such as the unauthorized review of civic group sponsorship funds by the Future Strategy Office in the past stemmed from a lack of communication with civic groups.” Additionally, the committee plans to issue recommendations related to Samsung’s succession. These recommendations are expected to be disclosed as early as next week.

Within the Compliance Committee, there is an opinion that activating recommendations and monitoring functions early can reduce concerns raised by some civic groups and political circles. Some civic organizations view the Compliance Committee negatively, seeing it as a tool linked to the sentencing hearings of Samsung Electronics Vice Chairman Lee Jae-yong’s retrial. Aware of this, the Compliance Committee shared concerns about the perception that the committee’s independent activities might influence trial outcomes, stating, “The committee will remain faithful to its original mission and duties without being influenced by the ongoing criminal trial of the group head or other surrounding circumstances.”

Furthermore, the committee believes that activating its functions is essential to maintaining its role even after the terms of the inaugural chairman, members, and secretariat staff end. Previously, the terms of the Compliance Committee chairman, members, and secretariat staff were set at two years. The committee also plans to hold a workshop next month to secure Samsung’s cooperation. About 30 people, including Chairman Kim, committee members, secretariat staff, and compliance officers from Samsung affiliates, will gather in April. A committee official said, “We expect sincere discussions on various cooperation measures for Samsung Group’s compliance support activities.”

This content was produced with the assistance of AI translation services.