The activist fund Align Partners noted that four institutional investors, including the largest pension fund, the California Public Employees' Retirement System, the California State Teachers' Retirement System, the British Columbia Investment Management Corporation, and the Florida State Board of Administration, supported the introduction of a cumulative voting system at Coway’s annual general meeting on the 25th.
The British Columbia Investment Management Corporation expressed support for Align Partners’ shareholder proposal, but clearly opposed Coway’s separation proposal for inside directors and outside directors regarding the cumulative voting system. The pension fund stated, "The introduction of a cumulative voting system protects shareholders’ rights," adding that, "Conversely, applying the cumulative voting system by separating the inside and outside directors infringes on shareholder interests."
The cumulative voting system grants one vote for each share for as many directors as there are to be elected. If five directors are to be elected, each share will have five votes. The cumulative voting system is considered a means to protect minority shareholders, as it allows votes to be concentrated on a single candidate.
Previously, global proxy advisory firm Glass Lewis and Korean ESG standards organizations, including the Korean ESG Research Institute and Sustainbest, also voted in favor of the shareholder proposal for the introduction of the cumulative voting system proposed by Align Partners. ISS opposed it on the grounds of a lack of compelling justification.
Lee Chang-hwan, CEO of Align Partners, urged the National Pension Service to support the cumulative voting system during Coway's annual general meeting scheduled for the 31st. He said, "As it is explicitly stated in the revised guidelines regarding trustee responsibilities that we oppose proposals excluding the cumulative voting system and support proposals removing such exclusion clauses, I earnestly request the National Pension Service to exercise its voting rights in favor of the cumulative voting agenda."