The result of the Korean presidential election came in just as this newsletter went to press. Metrica was pleased to see Lee Jae-myung win the race by a comfortable margin. Mr. Lee’s campaign platform included a large number of pledges to improve Korea’s corporate governance and stock market functioning, including:

  • Improving corporate governance transparency
  • Revising the commercial act to expand corporate directors’ fiduciary duties beyond the company to include shareholders
  • Ensuring that cumulative voting cannot be excluded by the articles of incorporation
  • Ensuring that new shares are allocated to existing parent company shareholders (including minority shareholders) in the event of a split-off listing
  • Implementing policies which institutionalise the mandatory cancellation of treasury stocks by listed companies, ensuring these shares are returned to shareholders as a benefit
  • Setting a mandatory independent director ratio for companies of a certain scale, ensuring certain level of independent oversight
  • Gradually expanding the separate election of audit committee members for large listed companies
  • Implementing electronic voting for large listed companies
  • Introducing of advisory shareholder proposals
  • Implementing fair price framework that considers stock prices, asset values, and revenue values when determining the acquisition or merger prices for publicly listed companies
  • Implementing mandatory public purchases to share management control premiums and guarantee opportunities for minority shareholders to redeem their shares during company acquisitions
  • Implementing system allowing minority shareholders to request an examiner through the courts when merging publicly listed companies and their affiliates
  • Strengthening monitoring and sanctions against unfair internal transactions Importantly, Korea finally has a president and majority government from the same party. For the first time in three years, the government will be able to progress its legislative agenda without being constantly hindered by an uncooperative veto-holder.