Korea ESG Research Institute Recommends Supporting Choi Yoonbum’s Appointment as Internal Director

Support for Korea Zinc’s Five-Director Proposal
Recommendation to Oppose Young Poong and MBK’s Six-Director Proposal

Korea Zinc has released the results of the Korea ESG Research Institute's proxy voting recommendations, emphasizing that the current management is gaining support in the context of a management rights dispute ahead of the upcoming annual general shareholders’ meeting.

Korea Zinc CI.

Korea Zinc announced that, according to the agenda analysis report published by the Korea ESG Research Institute on March 16 ahead of the annual general shareholders’ meeting to be held on March 24, the Institute recommended supporting Chairman Choi Yoonbum's appointment as an internal director, while advising against the appointment of six directors proposed by Young Poong and MBK Partners.

As the Korea ESG Research Institute has issued favorable opinions regarding the candidates and agenda items recommended by the current board of Korea Zinc, it is being evaluated as effectively lending support to management led by the current executives. Previously, global proxy advisors Glass Lewis and ISS, as well as domestic proxy advisor Korea ESG Ratings, had all recommended supporting the company's agenda items and board candidates in succession.

The Korea ESG Research Institute recommended supporting Choi Yoonbum, the internal director candidate, and Hwang Deoknam, the outside director candidate, both recommended by Korea Zinc's board. The institute also expressed support for the appointment of Kim Boyoung as an audit committee member and the separate appointment of Lee Minho as an outside director to the audit committee.

In contrast, the institute recommended voting against two of the four director candidates proposed by Young Poong and MBK Partners: Choi Yeonseok, candidate for non-executive director, and Lee Sunsook, candidate for outside director.

Regarding one of the key agenda items at this general meeting—the determination of the number of directors to be elected by cumulative voting—the institute recommended supporting the appointment of five directors as proposed by Korea Zinc, while advising against the appointment of six directors as proposed by Young Poong and MBK Partners.

On other major agenda items beyond board composition, the Korea ESG Research Institute generally expressed support for the company's proposed improvements to its governance structure. The institute recommended supporting all major items, including amendments to the articles of incorporation to expand the separate election of audit committee members, codifying the protection of minority shareholders, introducing an electronic general shareholders’ meeting system, clarifying and renaming requirements for independent directors on the board, and amendments related to quarterly dividends.

On the other hand, the institute gave a negative assessment of some amendments to the articles of incorporation proposed by Young Poong and MBK Partners. It recommended voting against the amendment to introduce a duty of loyalty for directors when issuing new shares, citing concerns about shareholder rights dilution. It also opposed the amendment to introduce an executive officer system, citing the potential weakening of board functions as the reason.

It is analyzed that the recommendations of the Korea ESG Research Institute are consistent with the trend among major domestic and international proxy advisors. Previously, on March 11, Glass Lewis had recommended supporting two director candidates and two audit committee candidates recommended by Korea Zinc, while advising against all four director candidates recommended by Young Poong and MBK Partners. Glass Lewis also expressed support for the appointment of five directors and the expansion of separately elected audit committee members.

ISS similarly expressed support for both the appointment of five directors and the expansion of separately elected audit committee members proposed by Korea Zinc in its proxy voting recommendation report released on March 9. ISS positively evaluated the current management's operational performance and governance improvement measures.

The domestic proxy advisor Korea ESG Ratings also recommended supporting the agenda items backed by the current board in its agenda analysis report on March 6, stating, "We maintain a positive view of the results, governance improvements, and increase in shareholder returns demonstrated under the current management system."

A representative of Korea Zinc stated, "It appears that the Korea ESG Research Institute comprehensively reviewed our management performance, governance improvement efforts, and shareholder return policies, and expressed support for the board-backed director candidates and agenda items. We will remain firm in responding to Young Poong and MBK Partners' hostile takeover attempts, while focusing on management stability and enhancing corporate value."

This content was produced with the assistance of AI translation services.