Korean Air Lines Co Ltd shareholders rejected an extension for CEO Cho Yang-ho a...
SEOUL - Korean Air Lines Co Ltd shareholders rejected an extension for CEO Cho Yang-ho as director in a landmark vote on Wednesday, ending his 27-year tenure on the board of South Korea’s biggest carrier and sending its shares higher.
A total of 64.1 percent of shareholders present at the airline’s annual shareholders’ meeting voted for the airline’s proposal, narrowly falling short of the two-thirds required for approving a three-year extension for Cho on the board. “Although Cho doesn’t seem to lose a lot of his power without a board membership, it hits his image, and his family will behave much more carefully now that he realizes there are people checking on him and his management.”
“As a result, the company’s reputation hit rock bottom and the business performance has suffered,” he said. Influential proxy adviser ISS had also recommended investors vote against the reappointment, citing “sufficient evidence of egregious governance concerns and material failure of fiduciary duty.”South Korea has been trying to make its corporate giants - long dominated by powerful elites and run by family members - more accountable for their management and behavior following a series of bribery and other scandals involving owners of corporations and their family members.
Cho’s only son Cho Won-tae, widely seen as the third generation successor of the conglomerate, is currently a board member of the company and the president of Korean Air.
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