We met with the management of South Korea’s Samsung Electronics to discuss its improvements to board oversight after an embezzlement case involving one of the country’s top politicians engulfed the company.
Company management provided an update on the addition of directors with government, audit, and legal experience and members who broadened the board’s gender and regional diversity. Of particular note was the appointment of the company’s first independent chairman. The company also shared details about a new enterprise-wide advisory compliance committee that serves as a consultant to directors on certain governance issues. Although we consider these appropriate measures to begin regaining shareholder trust, in our next discussion we hope to engage with board members who can provide details on board operations.
Given Samsung Electronics’ stature, it has an opportunity to set an example for governance best practices in Asia. The company has taken initial positive steps, but we will look to hear from board members in the future about additional measures they have taken to improve governance.