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| ▲This photo provided by SM Entertainment show the logo of SM Entertainment. (PHOTO NOT FOR SALE) (Yonhap) |
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| ▲This photo, provided by SM Entertainment show executive producer Lee Soo-man. (PHOTO NOT FOR SALE) (Yonhap) |
SEOUL January 20 (Yonhap) -- SM Entertainment has decided to reorganize the structure of the board of directors and switch to a "Multi-producing system" by accepting the proposal of Align Partners Capital Management (shortened as Align Partners), which represents small shareholders.
SM Entertainment addressed Friday, "In order to become a global company trusted and respected by shareholders, executives and all stakeholders, we decided to accept the plan provided by Align Partners, who have led the campaign to improve SM's governance structure and enhance shareholder value since February of 2022."
Previously in December of 2022, Align Partners addressed SM to establish a compensation committee within the board of directors, announce future production plans, organize a majority of the board of directors as outside directors and more.
Throughout the regular shareholders' meeting scheduled for March 2023, SM Entertainment decided to form a board of directors with three in-house directors, three outside directors and one other non-executive director.
In particular, the three new in-house directors will consist of one in house director one from outside director and one appointed by Align Partners.
For the non-executive director role, representative Lee Chang-hwan, the CEO of Align Partners.
Moreover, SM Entertainment plans to separate the CEO and the chairman of the board of directors after the shareholders' meeting, and appoint one of the outside directors as the chairman of the board. Continuing on, a "candidate recommendation committee" which will consist of all outside directors will be established, and candidates for outside directors will be recommended by this committee in the future.
In addition, SM Entertainment announced their plans to set up an Internal Trade Committee, Set up a compensation committee within the board of directors, Reinforce the communication line between IR and shareholder, and more
SM Entertainment did not make any particular statement regarding the future of their executive director Lee Soo-man, the founder of the company.
However, by officially announcing the "transition into a multi-production system" SM Entertainment opened the way for other potential producers to list their names within the album besides Lee Soo-man.
Towards the end of 2022, the executive producer Lee Soo-man announced the termination of the production contract between SM Entertainment and Like Planning which is executive producer’s private company.
"For the past 26 years, we have built the unique identity possessed by SM Entertainment based on the producing of Lee Soo-man," adding, "However in the future, several talented producers will inherit and continue on improving and developing the unique identity of the SM Entertainment throughout the newly introduced multi-producing system." addressed SM Entertainment.
Along with the announcement, SM Entertainment and Alain Partners agreed upon resolving the conflict they had over the past year. Align Partners withdrew all of the lawsuits filed against SM Entertainment.
"We will try our best to lift all the negative image that has been piled throughout the year by showcasing sustainable multi producing system, reorganizing the corporate governance, and strengthening the channel for communication between he company and the shareholders and more" addressed Lee Sung-soo and Tak Young-joon, the co-CEOs of SM Entertainment.
(This article is translated from Korean to English by Joonha Yoo)
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