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SEOUL—Samsung Electronics Co. nominated Lee Jae-yong, the son of its longtime chairman, to its board of directors as shares in the technology titan suffered their steepest one-day decline since 2008 in the wake of a global phone recall.

The latest step in the elevation of Mr. Lee, the South Korean company's vice chairman and heir apparent, comes more than two years after his father, Chairman Lee Kun-hee, was hospitalized following a heart attack. He remains incapacitated.

Samsung on Monday said the announcement wasn't related to the crisis that has engulfed the company since it initiated a voluntary recall of its latest smartphone, the Galaxy Note 7, earlier this month because of a risk that the battery may catch fire.

Investors dumped Samsung shares again Monday, knocking a further $15.9 billion off the company's market value after wiping out more than $10 billion Friday.

Samsung shares Monday finished down 7% at 1.465 million won ($1,334) in Seoul, the largest fall since October 2008. Analysts said Samsung's steep decline was compounded by global market concern over a possible U.S. interest-rate increase this year as well as declines in U.S. stocks last week.

South Korea's main Kospi share index dropped 2.3%, its biggest one-day fall since January. "It's one thing piling on after another," said Lee Sei-cheol, an analyst at NK Investment & Securities.

Since the company announced the voluntary recall of more than 2.5 million smartphones on Sept. 2, it has been under pressure to act more decisively in response to increasing reports of phones catching fire because of faulty lithium-ion batteries. On Friday, the U.S. Consumer Product Safety Commission and Samsung advised users of the Galaxy Note 7 smartphone to turn off the device and not use it. Several airlines have asked passengers not to use the phone while flying or stow them in checked luggage.

The statement revealing Mr. Lee's nomination also came on the day Samsung said it agreed to sell its printing business unit to HP Inc., a deal viewed by analysts as driven by the third-generation heir's desire to slim down the company's business portfolio and strengthen its better-performing areas.

His nomination will be put to a shareholder vote on Oct. 27, the company said. The addition of Mr. Lee to the company's board will allow him to increase his involvement in business decisions such as investments and mergers-and-acquisitions deals, a person familiar with the matter said.

Mr. Lee, 48, became vice chairman of Samsung Electronics in 2012 after stints as chief customer officer and chief operating officer. He is known for keeping a low profile in deference to his father.

Lately, however, he has stepped up his public appearances, serving as the face of Samsung in meetings with Facebook Inc. Chief Executive Mark Zuckerberg, Google parent Alphabet Inc. CEO Larry Page and Chinese President Xi Jinping.

Pending shareholder approval, the Harvard-educated Mr. Lee will take the board seat currently held by Chief Financial Officer Lee Sang-hoon to maintain the existing board membership structure, comprising four company managers and five external independent directors, Samsung said.

Write to Eun-Young Jeong at eun-young.jeong@wsj.com

(END) Dow Jones Newswires

September 12, 2016 09:45 ET (13:45 GMT)

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