Voices of Responsible Management Rang Out at Shareholders’ Meetings of Samsung Group’s Subsidiaries

South Korea’s 54 listed companies closing their books in December, including major subsidiaries of Samsung and Hyundai Motor Group, held their annual shareholders’ meetings on March 11. At the meetings, many of them, who fear about the economic recession, fixed the limit of remunerations and strengthened the rights of outside directors to step up the responsible management of executive directors.

Samsung Group’s subsidiaries, such as Samsung Electronics Co., Samsung C&T Corp., Cheil Industries Inc., Samsung Electro-Mechanics Co., Samsung SDI Co. and Samsung SDS Co., also held their annual stockholders’ meetings at the same time. On the same day, some subsidiaries, including Samsung Electronics and Samsung C&T, changed its bylaws, allowing outside directors to chair their boardroom meetings. Until now, chief executive officials automatically and singularly co-headed the board of directors at Samsung Group affiliates. At the board of directors meeting after the annual general shareholders meeting, Samsung Electro-Mechanics appointed Han Min-koo, Samsung Electro-Mechanics outside director and Seoul National University professor emeritus as its new chairman of the board. It is the first time for a Samsung Group subsidiary to open up the board chair position to outside members.

 A heated debate over the election of executive and non-executive directors took place at the Samsung Electronics’ shareholders’ meeting, while complaints of Samsung C&T’s minority stockholders poured in at the first general stockholders’ meeting after the merger. In particular, there were unprecedentedly four rounds of electronic voting for three hours and 20 minutes to elect outside directors at the meeting with Samsung Electronics’ shareholders, questioning the qualifications of the candidates who were former high-ranking government officials. Some shareholders criticized outside directors for being a yes man for the company. Moreover, Samsung C&T minority stockholders complained about suffering losses due to the fall in stock prices at the first general meeting after the merger with Cheil Industries. One of them, who said he has 36,000 shares, expressed strong dissatisfaction about Samsung C&T’s stock prices after the merger.

Contrary to expectations, nobody asked questions about the overseas sell-off at the Cheil Worldwide shareholders’ meeting. Previously, Cheil Worldwide’s major shareholders publicly announced, “We are talking about various cooperation measures with global agencies but nothing is confirmed yet.”