Proxy Blog

Posco

March 4, 2019

This Korean steel maker’s annual proxy had the following proposals: 

  1. Proforma votes on directors  
  2. Proforma Korean votes on approving financial statements, audit committee membership and limits on director remuneration 
  3. Board proposal on amendments to the Articles of Incorporation 

Magni voted as follows: 

  1. Against one of the three “Outside Directors” and against two of the “Inside Directors”. The Outside Director with CEO experience and the Outside Director who is an accounting professor should remain on the board. The other Outside Director is another professor. One professor on the board is enough. There were four Inside Directors nominated for the board. If elected, the board could be controlled by directors who are not independent. At least two of the Inside Directors should not be on the board. 
  2. For Korean proforma proposals. Under US laws and regulations, these matters are handled by the board, thus the topics do not warrant votes by shareholders of U.S. companiesMagni usually votes in support of these topics, unless some controversy or issue has arisen that requires additional investigation or justifies a vote against. In this case, the lack of a proxy is a form of opaqueness, and opaqueness is incompatible with good governance. That said, Magni voted for the accounts and authorities since in the U.S. the topics are not matters requiring shareholder votes. 
  3. For amendments to the Articles of Incorporation. The changes were a mix of conforming to revised Korean requirements, updating dated language (e.g., streamlining governance on shares not issued as printed certificates), and minor cleanup of language. All of the changes either improved governance or had no impact on governance.