The importance of corporate governance disclosure continues to increase in Korea. In order to encourage listed companies to voluntarily enhance corporate governance and management transparency, the current system requires annual disclosure (i.e., by the end of May) of compliance level with the core principles of corporate governance stipulated in the Korea Exchange’s Guidelines on Corporate Governance Disclosure for Listed Companies (the “Guidelines”), applicable to the operation of general meetings of shareholders, the board of directors, statutory auditors or the audit committee, etc. Companies failing to comply must provide explanations (i.e., “comply or explain” approach).

In a number of recent cases, the compliance rate for 15 key indicators has become a benchmark for determining whether a company has excellent corporate governance, as well as a yardstick for institutional investors and shareholders deciding whether to support the company’s executive management and board of directors.

As noted in our previous newsletter, the Financial Services Commission (“FSC”) announced its plan to gradually expand the scope of companies subject to mandatory disclosure of corporate governance (Link), and has indeed subsequently expanded the scope of application in steps, by making the corporate governance disclosure mandatory for KOSPI-listed companies with total assets of KRW 2 trillion or more in 2019, then KRW 1 trillion or more in 2022, and then KRW 500 billion or more in 2024.

Then on July 9, 2025, the FSC announced that it had approved a proposed partial amendment to the “Korea Exchange KOSPI Market Disclosure Regulation” (the “Disclosure Regulation”) to expand the scope of companies subject to mandatory disclosure of corporate governance, so as to include all KOSPI-listed companies in 2026 (Link).

Once the amended Disclosure Regulation comes into effect, KOSPI-listed companies with total assets of less than KRW 500 billion will also be subject to the mandatory filing of corporate governance disclosure by May 31, 2026. As the mandatory filing will likely be expanded to KOSDAQ-listed companies going forward, it has been attracting attention from the market and corporate stakeholders.

The proposed amendments to the Korean Commercial Code, introducing directors’ fiduciary duty to protect shareholders’ interests, passed at the plenary session of the National Assembly (Link), and according to media reports, the government is considering expanding the scope of application of mandatory disclosure of corporate governance and various other regulations concerning corporate governance disclosure, aiming to ensure that the amended requirements are properly reflected in companies’ procedures for decision-making and communication with shareholders. Therefore, it is essential for companies to keep a close eye on any further amendments to the Guidelines in relation to the items requiring disclosure.

[Korean Version]