ISS Objects to Worker Director Recommendation at KBFG
Institutional Shareholder Services (ISS) recently released a report to object to KB Financial Holdings’ shareholder meeting agenda items for the appointment of two outside directors recommended by the employee stock ownership association of the company. The board of the company is also opposed to the appointment.
The agenda items will be covered at the upcoming shareholder meeting. Those in the financial industry are regarding the outside directors as worker directors as unionized KB Financial workers are the backbone of the employee stock ownership association.
With ISS objecting to the appointment, the first worker director in the industry has become a distant goal again. This is because ISS is the world’s largest proxy advisory firm accounting for no less than 65 percent of the market and its influence on foreign shareholders is absolute.
Worker directors in financial companies was one of President Moon Jae-in’s election pledges. Three years ago, the association of KB attempted to have Ha Seung-soo, then co-head of the Solidarity for Proportional Democracy, appointed as an outside director. The National Pension Service supported the unionized workers and expectations were high for the first worker director in the industry. However, the attempt failed due to foreign shareholders’ dissenting votes.