Former Constitutional Court Justice Kang Il-won: "Samsung Compliance Committee Generally Positive"

Samsung Electronics Vice Chairman Lee Jae-yong is entering the Seoul High Court in Seocho-dong, where the retrial for the 'state affairs manipulation' case is being held on November 9. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Changhwan Lee] Amid conflicting evaluations from expert advisors on the activities of Samsung's Compliance Committee, it has been confirmed that former Constitutional Court Justice Kang Il-won, appointed by the court, gave a positive assessment.

Since the Compliance Committee is a major factor in determining the sentencing in Samsung Electronics Vice Chairman Lee Jae-yong's 'state corruption' trial, attention is focused on the impact of the expert advisors' evaluations, selected by the court's authority, on the trial.

According to the legal community on the 16th, the three expert advisors who evaluated the Compliance Committee's activities submitted a final report totaling 83 pages to the court on the 14th. The advisors are former Justice Kang, recommended by the court; accountant Hong Soon-tak, recommended by the special prosecution; and lawyer Kim Kyung-soo, recommended by Lee's side.

They each expressed their opinions on the effectiveness and sustainability of the Compliance Committee, the effectiveness of compliance monitoring organizations within affiliates, the system for preventing and monitoring illegal activities, the effectiveness of post-violation measures, and the business support task force (TF), among other topics.

As expected, accountant Hong, recommended by the special prosecution, generally expressed a negative view of the Compliance Committee, while lawyer Kim, recommended by Lee's side, conveyed a positive opinion.

Among them, former Justice Kang, expected to play the role of a casting vote, gave an overall passing grade to the committee's activities. Kang divided his detailed evaluation into three categories: the effectiveness of the compliance monitoring system under the law, the effectiveness of the Compliance Committee, and the sustainability of the strengthened compliance monitoring system.

Regarding the effectiveness of the compliance monitoring system under the law, he emphasized, "As the compliance monitoring system has been strengthened and the activities of compliance monitoring organizations have become more active, it is clearly more difficult than in the past to commit illegal acts using internal company organizations," adding, "The launch of the Compliance Committee, which actively conducts compliance monitoring activities in organic connection with internal compliance organizations, also plays a role in supplementing the limitations of internal organizations."

While pointing out limitations in defining new types of risks and in proactive prevention and monitoring activities, he introduced that, following the Compliance Committee's recommendations, Boston Consulting Group (BCG), one of the world's top three management consulting firms, is conducting related consulting work. However, he noted limitations such as the lack of fact-finding investigations related to the Samsung C&T merger case and the Samsung BioLogics evidence destruction case, as well as passive measures against reported executives.

Regarding the effectiveness of the Compliance Committee, he evaluated that its independent operation has a positive effect on improving Samsung's compliance culture and has achieved results such as prompting Lee Jae-yong's public press conference.

Former Justice Kang diagnosed, "The Compliance Committee performs extensive compliance monitoring and control duties over affiliated companies that have joined the agreement and top management," adding, "Overall, it is conducting strengthened compliance monitoring activities, such as monitoring and supervising top management, which are difficult for internal organizations to perform."

Although he pointed out passivity regarding merger-related cases, he elaborated, "These are cases with significant controversy over the appropriateness of prosecution and unclear facts, making it difficult to take active measures."

He also expressed a generally optimistic outlook on the sustainability of the strengthened compliance monitoring system. He stated, "The compliance monitoring system under the law will certainly continue unless the law is amended," and added, "If the Compliance Committee maintains its organization and composition, support from top management, internal compliance culture, and public interest at the current level, there will be no problem with sustainability."

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