Chairman Kim Taehyun "Doubt Over Outside Director Reappointment"
The National Pension Service (NPS) has once again put a brake on the POSCO Holdings board of directors. It raised concerns about the reappointment of some outside directors who were involved in the controversy over attending a 'luxurious board meeting,' drawing attention to whether this will affect the final hurdle for POSCO chairman candidate Jang In-hwa.
Kim Tae-hyun, chairman of the NPS who criticized the reappointment of outside directors, did not respond on the 29th to Asia Economy's question, "Do you think the POSCO chairman selection process was appropriate?" Previously, after sending a text message criticizing the reappointment of outside directors as a personal opinion, he did not respond to further requests for answers.
There are various interpretations of Chairman Kim's silence. Opinions range from "targeting the outside directors directly" to the possibility of showing it through votes at the upcoming shareholders' meeting. The day before, Chairman Kim also did not express any position on the POSCO chairman selection during a phone call with some media outlets.
The influence of the NPS in POSCO Holdings is considerable. As the largest shareholder holding 6.71% of shares, it can sway the votes of major institutional shareholders, including the Government of Singapore Investment Corporation (GIC), as well as foreign and minority shareholders.
If a brake is applied to the final candidate's appointment in the POSCO chairman selection process, the repercussions will be significant. Suspicions of government interference in the POSCO chairman election may arise, and the selection process might have to be redone. Although Chairman Kim was reserved in his remarks on this day, the possibility remains that the NPS may expand concerns about transparency and fairness in the board of directors to the chairman selection process in the future.
Chairman Kim stated, "There are doubts about whether past outside director activities were truly independent and whether there were conflicts of interest, especially related to luxurious board meetings during their tenure as outside directors." His criticism points to POSCO's corporate governance report core principles, which specify 'persons responsible for damaging corporate value or infringing on shareholder rights' as disqualifications for outside directors, questioning whether this decision aligns with that principle.
The outside directors whose reappointment Chairman Kim questioned are former Environment Minister Yoo Young-sook and former Public Procurement Service Commissioner Kwon Tae-gyun. Along with five other outside directors, they became subjects of police investigation over the controversy surrounding luxury business trips to Canada and other locations.
POSCO Holdings plans to hold a vote on April 21 at the regular shareholders' meeting on the appointment of next chairman candidate Jang In-hwa and the reappointment of outside directors Yoo Young-sook and Kwon Tae-gyun. Chairman Kim pointed out, "In the absence of a satisfactory explanation for the market's doubts, the fact that these outside director candidates were re-nominated raises questions about how this helps enhance shareholder value."
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