Starbucks Korea has dismissed its chief executive, Son Jeong-joon, following a controversial promotion that coincided with a date historically significant to South Korea’s military history, a move that has drawn sharp criticism from British institutional investors calling for a governance overhaul.
The promotion, branded ‘Tank Day’, offered discounts on beverages on 9 February, a date that marks the anniversary of the Korean War’s Inchon Landing in 1950, a major amphibious operation led by General Douglas MacArthur. Critics accused the company of trivialising a solemn national memory, with protests erupting on social media and calls for a boycott.
Starbucks Korea, a joint venture between Starbucks Corporation and South Korean retailer E-Mart, initially defended the promotion as a routine marketing exercise. However, by midday local time, the company apologised and withdrew the campaign. On 12 February, Starbucks Korea announced that Son had been removed with immediate effect, citing a failure of internal oversight.
“This decision reflects our commitment to respecting the cultural and historical sensitivities of South Korea,” said a company spokesperson in a prepared statement. “We have also implemented new approval protocols for promotional materials.”
The fallout has extended beyond Seoul. ShareAction, a London based responsible investment group representing 33 investors with £13 billion in assets, has written to the board of Starbucks Corporation demanding a comprehensive review of governance practices. In its letter, the group noted that “the Tank Day incident demonstrates a systemic failure in risk management and cultural awareness at the subsidiary level.”
Legal & General Investment Management, one of the signatories, told Reuters that it expects a full explanation from the board and a clear plan to prevent future occurrences. “This is not merely a public relations lapse,” said a LGIM spokesman. “It raises questions about how Starbucks oversees its international operations and whether adequate safeguards are in place.”
Starbucks Corporation has declined to comment on the investors’ demands, though sources close to the board indicate that a review is already under way.
The episode marks the second high profile governance crisis for Starbucks Korea in three years. In 2022, the company faced backlash over a promotion linked to Japan’s colonial rule of Korea, leading to an apology and staff retraining.
The ‘Tank Day’ controversy also comes amid heightened geopolitical tensions on the Korean Peninsula, where accusations of historical revisionism have become increasingly charged. Park Ji-yoon, a professor of business ethics at Yonsei University, said the incident reflected a broader disconnect between global franchises and local sensibilities. “Multinational firms often standardise marketing templates across markets without adequate regional due diligence,” she said. “This shortcut can cause significant reputational harm.”
For Starbucks, the immediate financial impact is unclear. The company’s shares dipped 1.2 per cent in after hours trading on the day the sacking was announced, but recovered slightly the following session. However, analysts warn that prolonged investor scrutiny could affect the company’s cost of capital and expansion plans in Asia.
“Institutional investors are increasingly holding boards accountable for environmental, social and governance failures,” said Paul Davies, a governance analyst at Berenberg. “This case is a reminder that cultural insensitivity is as much a governance issue as a financial one.”
The British investors have requested a meeting with Starbucks’ lead independent director within 30 days. Failure to address their concerns, they warned, could lead to coordinated voting against director elections at the next annual general meeting.
Starbucks Korea, which operates more than 1,800 stores in the country, has not named an interim replacement for Son. The company said it would conduct an external search for a new chief executive with “deep understanding of Korean cultural contexts.”
