A stone to strengthen the independence of the board of directors
Requirement of ESG Management Committee
Hanjin “I will decide after review”
Photo = Yonhap News
The Korea Development Bank demanded that Hanjin Group’s holding company, Hanjin Kal, be separated from the general shareholders’ meeting in March. KDB explained that this is a measure to prevent the management of Hanjin Group owners from interfering with the family and to strengthen the independence of the board of directors.
On the 10th, KDB announced that it had sent a shareholder proposal to Hanjin Kal to exercise the shareholders’ proposal right at the shareholders’ meeting held in March. In December of last year, KDB became the third largest shareholder with a 10.66% stake in Hanjin Kal through a paid-in capital increase of 500 billion won to a third party. Hanjin Group chairman Cho Won-tae and related persons own 36.66%, and the trilateral association such as KCGI owns 40.41%.
The core of the shareholders’ proposal sent by the Bank on the same day is the institutionalization of the separation of the CEO and the chairman of the board of directors. Until last year, Chairman Cho also served as the chairman of the board of directors. However, in the wake of a dispute over management rights with the trilateral association, the board changed the rules to elect the chairman of the board, which was supposed to be the first representative director in February of last year. The current Chairman of the Board of Directors is Kim Seok-dong, former Chairman of the Financial Services Commission.
KDB went one step further and demanded that the representative director be stipulated so that he could not serve as the chairman of the board of directors. KDB said, “It is necessary to institutionalize the separation of the CEO and the chairman of the board of directors to enhance management transparency and soundness through strengthening the independence of the board of directors.”
Along with this, the KDB prohibited the composition of the board of directors of the same gender and proposed a plan to establish an ESG (Environmental, Social, Governance) Management Committee within the board of directors. In order to expand women’s participation in management, all directors were not made up of men. It was proposed to calculate the limit of compensation for directors and to reflect the establishment of a compensation committee for monitoring in the articles of association.
The Bank of Korea plans to play a role as a faithful shareholder to fulfill Hanjin Kal’s sound and ethical management and social responsibility. There is also an analysis that is a follow-up measure to dispel the controversy over preferential treatment raised by the politicians and civic groups. Some ruling party lawmakers raised suspicion that they were giving preferential treatment to Chairman Cho in the process of Korean Air’s acquisition of Asiana Airlines at a discussion meeting held on the 3rd.
A KDB official said, “The content of the proposal is an agenda that other shareholders have also proposed in the past.” Han Jin-Kal did not make an official position on the shareholders’ proposal of San Eun. Hanjin Kal plans to make a decision after carefully reviewing the shareholders’ proposals of Saneun.
Reporter Kang Kyung-min [email protected]
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