16.10.17

Samsung Board May Be Given More Power Amid Leadership Crisis

The Board of Directors of Samsung Electronics may be given more corporate power amid a major leadership crisis within the company, BusinessKorea reported on Monday, citing officials from the Seoul-based conglomerate. With Samsung Group Chairman Lee Kun-hee being in a comatose state since 2014 and his son and Vice Chairman Lee Jae-yong (Jay Y. Lee) being incarcerated since February and recently sentenced to five years in prison, the leadership situation at Samsung was already alarming when the company’s Chief Executive Officer Kwon Oh-hyun revealed his intention to resign and retire come early 2018 when his current term comes to an end. The sudden announcement came as a shock to many industry watchers and Samsung investors, with Mr. Kwon admitting that the company is going through an unprecedented crisis but stating this is still the right time for Samsung to transition to a younger leadership.

Samsung’s departing CEO is now set to visit Vice Chairman Lee in prison to discuss his potential successor and ask for understanding regarding his decision, one Samsung employee was cited as saying, suggesting that the de facto leader of the chaebol wasn’t aware of Mr. Kwon’s decision to resign in advance. The current president of Samsung’s semiconductor unit Kim Ki-nam is rumored to be one of the most likely candidates to succeed the departing chief, with some insiders saying that an outside expert may still be appointed to lead the company’s Board of Directors which could be given more power as a result of recent developments, signaling Samsung’s transition to a more democratic corporate leadership model utilized by Silicon Valley giants like Google and Facebook.

The current CEO of the company used to be heavily involved in its DRAM advancements in the early ’90s, having led the team which created the first commercial 64MB DRAM chip 25 years ago. While Samsung has a long history of appointing long-term executives to top C-suite positions, the company’s management hiring policies were changed in early 2016 to allow for an outside expert to be appointed to lead its board. No major changes are likely to take place if Mr. Lee successfully appeals his prison sentence and is released by next February, with semiconductor chief Kim being set to take over Mr. Kwon’s duties in that scenario, as suggested by recent reports.

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