SM Entertainment “Introduction of corporate governance that meets global standards”
SM Entertainment (SM) announced on the 15th that it has decided to introduce a global high-level corporate governance structure suitable for a global content company on the 13th.
In order to reorganize it into a transparent and highly professional board-centered management structure, SM Entertainment will review the board structure of global companies with leading global advisory bodies and introduce a board structure optimized for SM.
First of all, the proportion of existing outside directors will be greatly expanded from the current 25% to a majority. In addition, the composition of the board of directors has been changed to strengthen the independence of the board of directors by changing the regulations that require the current CEO to chair the board of directors.
Currently, the board of directors consists of three in-house directors and one outside director, but the number of outside directors will be four, and the board will be composed of a majority of the board of directors.
In order to further strengthen the independence and professionalism verification of outside directors, the committee will be introduced to recommend candidates for outside directors (hereinafter referred to as the private committee). The recommendation of outside directors, scheduled to be appointed in March 2023, will be carried out by launching a “temporary private committee” consisting of more than two-thirds of outside directors, and after this shareholders’ meeting, the independence and expertise of outside directors will be strengthened.
In order to more efficiently support the authority and operation of the board of directors, three or more specialized committees in each field under the board of directors, such as the ESG Committee and the Internal Trade Committee, will be introduced to operate the board more finely. In order to support outside directors’ practical participation in management, the company will also introduce a system in which outside directors receive help from external advisory institutions and support the costs.
For all transactions with producers, affiliates and subsidiaries, Lee Soo-man will establish an internal transaction committee consisting of more than two-thirds of the total members of outside directors to reinforce them through close and transparent review by the committee.
In addition, SM Entertainment plans to actively recommend female experts and overseas entertainment industry experts to increase the diversity of the composition of the board of directors.