2024-12-26
SEOUL, South Korea, Dec. 24, 2024 /PRNewswire/ — Korea Zinc (KRX:010130) held a special directors meeting on December 23 to finalize the agenda for the extraordinary general meeting (EGM) scheduled for January 23. The meeting focused on measures to strengthen minority shareholders’ rights and protections while expanding the independence and diversity of the board. Key resolutions were adopted after an in-depth discussion.
Specifically, Korea Zinc plans to implement promises made by the management at a prior press conference, including appointing an independent director as the board chair, establishing regulations to protect minority shareholders, introducing quarterly dividends and implementing a stock split. The agenda also includes placing a cap on the board size to ensure stable and efficient operation of the board. In addition, a cumulative voting system proposed by Yoomi Development, Korea Zinc’s shareholder, will be addressed at the EGM.
(an omission)
The Korea Zinc board decided to propose amending the articles of incorporation to place a cap on the number of directors on the board to ensure board stability and efficiency. This decision followed a careful assessment, including recommendations from Institutional Shareholder Services (ISS) guidelines and the global proxy advisory firm Glass Lewis, which has stated, “We believe that boards with more than 20 members will typically suffer under the weight of ‘too many cooks in the kitchen’ and have difficulty reaching consensus and making timely decisions.” The board decided it was necessary to place a cap in order to prevent potential issues that could rise from having too few or too many directors. Domestic proxy advisory firms, including the Korea Institute of Corporate Governance and Sustainability and Sustinvest, have also warned against having excessively large or bloated boards, stating that having too many directors could dilute accountability and weaken decision-making capabilities.
(an omission)
On December 10, 2024, Yoomi Development, a shareholder of Korea Zinc, formally requested the introduction of a cumulative voting system to empower and enhance the protection of minority shareholders. Korea Zinc’s board of directors accepted this request, adding a proposal to amend the articles of incorporation to adopt a cumulative voting system, along with an agenda for director appointments based on this system. A cumulative voting system is considered to be one of the most significant measures for protecting minority shareholders’ rights and ensuring board diversity. Korea Zinc’s board has acknowledged that this system is a key safeguard under corporate law to prevent minority shareholders’ voting rights from being rendered meaningless and has decided to actively embrace the proposal. This system is notably recommended by leading global proxy advisory firms such as Glass Lewis and the ISS.
| ※ Cumulative Voting System
In a cumulative voting system, each shareholder is entitled to one vote per share, multiplied by the number of available director positions, when electing board of directors. At a shareholders’ meeting convened to elect two or more directors, shareholders have voting rights corresponding to the number of directors to be elected for each share they hold. These voting rights can be allocated entirely to a single candidate or distributed among multiple candidates as desired by the shareholder. |
Additionally, a new regulation for minority shareholder protection has been established, along with the introduction of quarterly dividends and a proposal for a stock split. First, the new regulation for minority shareholder protection specifies that management must respect the rights of single and minority shareholders, and if a minority shareholder requests an explanation regarding important management matters, relevant information must be provided. This is intended to enhance communication with minority shareholders and improve transparency. In addition to the current interim dividend system, a new proposal for quarterly dividends distributed at the end of March, June and September has been introduced as part of the effort to strengthen shareholder-friendly policies.
※ Please Refer to the full article: Korea Zinc Announces Agenda for the Extraordinary General Meeting, Reinforcing its Commitment to Shareholders | AP News
