Samsung Introduces Senior Outside Director System to Strengthen Responsible Management

Introduction of Senior Outside Director System at Samsung SDI and Samsung SDS
Expansion to Samsung Affiliates

Samsung is strengthening board-centered responsible management by introducing the senior outside director system.

On the 26th, Samsung announced that Samsung SDI and Samsung SDS held board meetings and decided to introduce the 'senior outside director' system. Professor Kwon Oh-kyung of Hanyang University’s Department of Convergence Electronic Engineering and Professor Shin Hyun-han of Yonsei University’s Business School will each serve as senior outside directors. The senior outside director system allows for the election of a senior outside director to represent outside directors and ensure proper balance and checks when the CEO or an inside director chairs the board.

Samsung expects that the introduction of the senior outside director system will further enhance the independence and status of the boards of Samsung SDI and Samsung SDS.

Besides Samsung SDI and Samsung SDS, Samsung affiliates where outside directors do not currently chair the board will also consider adopting the senior outside director system. This applies to companies such as Samsung Biologics, Samsung Heavy Industries, and Hotel Shilla, where the CEO or inside directors chair the board. Meanwhile, eight companies including Samsung Electronics, Samsung Electro-Mechanics, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Securities, Samsung Card, Samsung Asset Management, and Samsung C&T already have outside directors chairing their boards and are therefore not subject to adopting the senior outside director system.

Samsung introduced the senior outside director system to reorganize its governance structure, enhance management transparency, and expand communication with society. A Samsung official explained, "Although the senior outside director system is not mandatory under current Korean Commercial Act for non-financial companies, Samsung proactively decided to adopt the system to actively incorporate diverse external opinions. By adding this system to the existing practice of appointing outside directors as board chairs, Samsung can apply two 'standard models' for establishing 'board-centered responsible management' and reorganizing the governance structure across its major affiliates."

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