Korea tightens corporate governance disclosure rules to strengthen shareholder protections
All companies listed on the benchmark KOSPI will face tougher disclosure requirements on boardroom changes and major corporate transactions under new rules designed to give shareholders greater oversight of corporate governance, financial authorities said Thursday. The changes, announced by the Financial Services Commission and the Korea Exchange, expand the information companies must provide in…
The Financial Services Commission and Korea Exchange announced new corporate governance disclosure rules on Thursday, aiming to enhance shareholder oversight and protect minority investors. These changes, which will apply to all 826 companies listed on the KOSPI benchmark index, include stricter requirements for boardroom changes and major corporate transactions.
The regulations seek to prevent companies from bypassing the revised Commercial Act, which mandates cumulative voting for listed companies with assets exceeding 2 trillion won ($1.49 billion). This voting system enables shareholders to consolidate their votes behind a preferred director candidate, increasing the likelihood of minority shareholders securing a seat on the board.
However, some firms have attempted to circumvent this requirement by reducing the size of their boards or altering the rules governing their structure.
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