The Corporate Governance Advisory Committee, an independent body under the Korea Listed Companies Association, expressed opposition on the 19th regarding the shareholder proposal concerning amendments to DB HiTek's charter, which sought to grant authority to the general meeting of shareholders to decide on the retirement of treasury shares and to introduce an advisory shareholder proposal.
Previously, there was a shareholder proposal to establish a provision in the charter stating that 'if there is a resolution from the general meeting of shareholders, treasury shares can be retired without a board resolution.'
The Corporate Governance Advisory Committee noted that 'if a decision is made at the general meeting of shareholders regarding the retirement of treasury shares, the responsibility for potential issues arising post-retirement becomes unclear, making it impossible for the board to take follow-up actions,' and recommended against it.
A 'new advisory shareholder proposal' was also presented at the regular general meeting of shareholders as a proposal from DB HiTek. It contains provisions allowing shareholders who hold more than 3% or more than 0.5% of equity for more than six months to suggest matters concerning the company’s capital structure and procurement, corporate governance restructuring, executive compensation policies, and shareholder return policies to the board up to six weeks before the general meeting.
The Corporate Governance Advisory Committee expressed opposition, stating that 'the advisory shareholder proposal may violate commercial law, and the company's burden may increase significantly, raising concerns about negative side effects.'
However, considering DB HiTek's financial health, the Corporate Governance Advisory Committee supported the shareholder proposal for a charter amendment to introduce quarterly dividends, noting that it could have a positive effect on corporate value. They also called for compliance with the shareholder return policy and strengthened communication with minority shareholders while recommending approval for the remaining agenda items.
The Corporate Governance Advisory Committee is a body composed of independent external experts from the Korea Listed Companies Association to ensure fairness and independence. Professor Emeritus Kwak Soo-geun of Seoul National University serves as the chairperson.