POSCO Group, which is about to see the inauguration of its new chairman, has been accused of nominating inappropriate outside directors to its holding company, POSCO Holdings, and its affiliates.
“After reviewing the agendas for the shareholders’ meetings of POSCO affiliates, many of the candidates for outside directors and auditors supposed to act as checks and balances on the management have independence issues and some of them violate current laws,” the Solidarity for Economic Reform said in a commentary on March 19, urging POSCO Holdings shareholders to vote against the proposals.
Seven independent director and auditor candidates at six of POSCO’s holding companies and affiliates including POSCO Holdings, POSCO International, POSCO MTEK, POSCO Future M, POSCO DX, and POSCO Steeleon are either related to the company’s related parties or are former POSCO employees, raising serious concerns about their independence.
“With the exception of Lee Bok-sil, an outside director of the POSCO 1 Percent Sharing Foundation who resigned after possible violations of the Commercial Code, these appointments are not in violation of current laws but that does not justify their appointment,” the Economic Reform Alliance said. “Shareholders of POSCO affiliates, including institutional investors such as Korea’s National Pension Service, should vote against the proposal to ensure the independence of the board of directors.”
Earlier this year, POSCO was placed under a probe by the police over allegations that its outside directors went on a luxury overseas board junket during the process of appointing a new chairman.