JY’s Board-based Management
Samsung C&T has decided to bring in a French executive who served as a top-level executive at General Electric as a new outside director. Analysis says that the move signaled the full-scale start of an improvement in corporate governance and management led by boards of directors. Earlier, Samsung Electronics recruited Kim Jeong-hoon, chairman of Kiswe Mobile, a Korean-American famous for his venture myth as a board member.
Samsung C&T announced that the company appointed Philippe Cochet, a former chief productivity officer (CPO) of GE as an outside director during a board meeting at its Pangyo Headquarters in Gyeonggi Province on February 28. The CPO position is responsible for taking the lead in the innovation of production, operation, services and prices at GE's business divisions in about 170 countries around the globe, thereby boosting business competitiveness and productivity.
Former GE CPO Cochet who had been the head of power generation in France's Alstom, a global energy company, since 2011, worked as a member of the GE Enterprise Management Committee after GE acquired Alstom in 2015. Cochet is a highly-qualified executive who reported directly to John Flannery who took office as CEO of GE last October.
It is said that Choi Chi-hoon, president of Samsung C&T evaluated to have a 'global mindset' emphasized by vice chairman Lee, played a major role in leading Cochet to join the board of directors. Choi is also from GE like Cochet. "I expect that Cochet will spare no advice about our core business such as construction and bio," said an official of Samsung C&T.
The appointment of Cochet as an external director of Samsung C&T means more than merely adding a foreigner to the board to ensure diversity. Especially his appointment mattes more since vice chairman Lee wanted to transfer the advanced governance structure of a sustainable and longstanding global company to Samsung. Cochet had worked as a professional manager in France, Germany, and the United States so is familiar with their decision-making and governance structures. Samsung C&T expects him to provide professional advice about governance as well as business.
The decision to preclude the CEO from becoming the chairman of the board is the result of the vice chairman's intention to improve the governance of the board, the highest decision-making body. Samsung C&T appointed Choi Chi-hoon, who stepped down as head of the Construction Division last year as chairman of the board of directors, and Samsung Electronics picked Lee Sang-hoon, a former CFO of the company as chairman of the board of directors. Before these moves, all CEOs served as chairmen of the board of directors.
"We will actively implement measures to enhance the diversity and professionalism of the board regardless of nationality and gender, not making it a one-time event," a Samsung C&T official said. "We will increase shareholder value by creating a virtuous circle system that improves governance with the board taking the lead."