More Power to BOD?
As Samsung Electronics vice chairman Kwon Oh-hyun’s announcement of his resignation on October 13, is expected to change Samsung Electronics' management structure considerably. Like Silicon Valley companies, the Korean electronics giant is more likely to give more power to its board of directors. There is also a prospect that an American may be appointed as the chairman of the board of directors after vice chairman Kwon next March.
"Vice Chairman Kwon will visit vice chairman Lee Jae-yong behind bars and ask for Lee’s understanding of his decision to resign and discuss his successor before long," said an official of Samsung on October 14. Unlike former vice chairman Choi Ji-sung (former head of the Future Strategy Officer) and former president Chang Chung-ki (who dealt with issues related to the government), Kwon was brought in to Samsung shortly after he received his doctorate degree (electrical engineering) from Stanford University near Silicon Valley in the US in 1985. In 1992, when Samsung first developed a 64-megabyte (MB) DRAM, overtaking Japan, he was the leader of the development team in the field.
"It seems that Kwon thought that he has done his part by growing Samsung through semiconductor development and asked his remaining staff members to take Samsung to the next new level with various new technologies such as cloud technology," said an official of the Korean business world.
In the nick of time, Samsung held 'Samsung CEO Summit' in San Francisco on November 11, two days before vice chairman Kwon announced his resignation. At the conference hosted by the Samsung Strategic Innovation Center (SSIC) in Silicon Valley in 2012, Samsung said that the company invested US$ 1.8 billion in 60 companies through three in-house venture capital firms. It is the first time Samsung disclosed the names of all companies they invested in and investment amounts. "Samsung which makes various data storage devices including semiconductors is now a data company," declared Sohn Young-kwon, president of SSIC. Sohn is also chairman of the board of directors of Harman acquired by Samsung in December of last year.
The next chairman of Samsung Electronics’s board of directors who will be elected next March may be an outside director rather than an inside one. Samsung Electronics revised its the articles of incorporation in March last year, allowing it to appoint an outside director as its chairman of the board of directors. "Did vice chairman Lee pursue board-based management such as that of Google and Facebook?" said an official of the Korean information technology. “If vice chairman Lee is found guilty, he will head up the chair of the board. Otherwise, a professional manager with a global reputation and ability may be appointed as board chairman.".
Speculation is rising that Kim Ki-nam, the president of the semiconductor division, will succeed vice chairman Kwon as head of the DS Division. Kim served as the CEO of Samsung Display for two years from 2012. Samsung SDI president Jeon Yeong-hyun, who once served as a manager at the Memory Business Division, is also a strong candidate.