There’s bad news for Samsung – it seems the company’s board chairman Lee Sang-hoon has resigned after reports came out of Samsung executives violating labor laws and disrupting activity by labor unions within the company.
Sang-hoon’s widely reported 18-month prison sentence for such activities, imposed by a South Korean court, shows how much more seriously that country takes union meddling than the United States, where such sentences are relatively unheard of.
Sang-hoon, who rose from CFO to board chair in 2018, is now out, but his marring of Samsung’s reputation might last a while, especially in a day and age when reports of anti-labor practices are harming big tech companies.
For example, earlier this week, we reported on the repositioning of Google’s HR chief Eileen Naughton, and similar suggestions that some labor policies at that company have not been kosher either.
“Google is profitable, largely due to its dominance in search advertising,” wrote Jason Aten at Inc. days ago in analyzing Google’s problems. “When all of the numbers are trending up, it can be easy to overlook how to adapt and change your culture as you scale. Remember, profits don’t drive culture– people do.”
As for Samsung’swoes, the company is circling the wagons.
“Samsung has not yet commented on the ruling,” wrote a BBC reporter at the time of Sang-hoon’s sentencing.” Seoul Central District Court said plans to stop union activities had been masterminded by executives in the firm’s now-defunct elite strategy group.”
Regardless of “whodunit,” this upheaval is a black eye for the top smartphone maker in a world where bad press matters. Look for the fallout in the telecom sector.