Samsung affiliates to beef up compliance teams under CEOs

 

Samsung Group on Thursday announced follow-up measures to “effectively beef up” compliance monitoring teams across its affiliates, including placing them under chief executives, with the intention of displaying its efforts to improve governance.

A total of 11 affiliates -- including Samsung Electronics, Samsung SDI, Samsung C&T, Samsung Life Insurance and Samsung Heavy industries -- will introduce in-house compliance units at CEOs’ offices away from the current legal offices, which they said would ensure greater independence and power.

“The conventional role of the legal team is technically different from the compliance team,” explained a Samsung official.

“By placing the compliance teams under the CEOs of the affiliates, the plan is aimed at holding them more accountable for compliance issues.”

It is a follow-up to the conglomerate’s announcement earlier this month to launch an external committee led by former Supreme Court Justice Kim Ji-hyung to monitor the business empire’s compliance with its own internal governance-related rules and other laws.

The Samsung affiliates that don’t have any kind of in-house compliance teams -- Samsung Biologics, Cheil Worldwide, Hotel Shilla and Samsung Asset Management -- will create new teams, the companies said.

All affiliates will hire lawyers as compliance heads.

The measures were announced after the Seoul High Court on Jan. 17 ordered another legal expert group to monitor the effectiveness of the external compliance committee of Samsung during the fourth retrial of Samsung heir Lee Jae-young.

The judge said that if the court finds that compliance functions at Samsung affiliates are effective, a decision on Lee’s sentence could be considered.

By Song Su-hyun (song@heralcorp.com)