Electronic component maker SOLUM is facing friction over introducing electronic voting for its shareholders meeting. Minority shareholders have been demanding mandatory adoption of electronic voting since last year, but the board is opposing it, citing expense.
Electronic voting is a system that allows shareholders to exercise their voting rights online without visiting the shareholders meeting venue in person and is considered one of the easy ways to help individual shareholders exercise their voting rights. In particular, as the financial authorities emphasized protecting the rights and interests of general shareholders as a key pillar of revitalizing the domestic stock market, many listed companies introduced electronic voting to expand shareholder rights.
SOLUM held its regular shareholders meeting at 10 a.m. on the 31st in Cheoin-gu, Yongin, Gyeonggi. The meeting drew attention as SOLUM accepted governance improvement measures requested by the activist fund Align Partners Asset Management.
SOLUM agreed to Align's request and decided to form a highly professional and independent board. Through a charter amendment, it will make a majority of the board independent directors and install bodies such as an internal transactions committee composed entirely of independent directors.
The point of contention is the introduction of electronic voting requested by minority shareholders. At this meeting, minority shareholders proposed an agenda item for "mandatory exercise of voting rights by electronic means."
However, the board opposed the item on the grounds of expense. The company's position is that agenda items can be handled if voting rights are exercised on-site at the meeting, so there is no need to incur expense to introduce electronic voting.
The board also views mandating electronic voting as excessive management interference. Under the revised Commercial Act, listed companies with assets of 2 trillion won or more must introduce electronic voting starting next year, but for other listed companies, adopting electronic voting is a matter for a board resolution. As of the fourth quarter of last year, SOLUM's asset size was about 1.2 trillion won.
Accordingly, as with last year, SOLUM's introduction of electronic voting was scrapped at this meeting. And the board submitted a board-sponsored agenda item stating that the company will hold the meeting on the day of the shareholders meeting with shareholders attending the convened venue in person.