In order to provide the market with transparent information on the corporate governance of listed companies and to encourage them to enhance their governance practices— including the operation of the board of directors and the general meeting of shareholders—a system for mandatory disclosure of corporate governance reports has been introduced, and is being continuously expanded.
In this regard, the Financial Services Commission (“FSC”) made corporate governance disclosure mandatory for KOSPI-listed companies with total assets of KRW 2 trillion or more in 2019, and gradually expanded the scope to include companies with total assets of KRW 1 trillion or more in 2022, and KRW 500 billion or more in 2024. As noted in our previous newsletter, on July 9, 2025, the FSC announced that it had approved a proposed partial amendment to the “Korea Exchange KOSPI Market Disclosure Regulation,” to further expand the scope of companies subject to mandatory disclosure of corporate governance reports, so as to include all KOSPI-listed companies from 2026 (Link).
Under the disclosure system, subject listed companies are required to disclose, by the end of May each year, their level of compliance with the core principles stipulated in the Korea Exchange (“KRX”) guidelines, which pertain to general corporate governance, including the operation of general meetings of shareholders, the board of directors, and statutory auditors or the audit committee. Companies failing to comply must provide explanations (i.e., ‘comply or explain’ approach).
On November 7, 2025, the KRX published its annual analysis of 2025 corporate governance reports submitted by KOSPI-listed companies (representing data for FY2024). We are informing you of these results to help you understand practical trends in the corporate governance of listed companies (Link).
In 2025, a total of 549 companies disclosed their corporate governance reports. This includes 541 listed companies with total assets of KRW 500 billion or more (including 40 financial companies and 501 non-financial companies) that are subject to mandatory disclosure, as well as 8 companies not subject to mandatory disclosure that voluntarily submitted their reports.
The overall compliance rate for 13 of the 15 key governance indicators, which are comparable across years, has continued to rise steadily, as shown below:
|
Total Assets |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
|
≥ KRW 2 trillion |
49.4% |
50.8% |
58.6% |
61.9% |
63.8% |
64.6% |
66.7% |
|
≥ KRW 1 trillion and < KRW 2 trillion |
- |
- |
- |
43.9% |
45.3% |
45.6% |
51.3% |
|
≥ KRW 500 billion and < KRW 1 trillion |
- |
- |
- |
- |
- |
36.4% |
40.8% |
|
Total |
49.4% |
50.8% |
58.6% |
55.5% |
57.1% |
51.2% |
55.3% |
Below are the compliance rates for key indicators, based on the 2025 corporate governance reports:
|
Key Indicators |
Total |
≥ KRW 2 trillion |
≥ KRW 1 trillion |
≥ KRW 500 billion |
|
① To give convocation notice 4 weeks before the general meeting of shareholders |
39.3% |
50.0% |
33.1% |
28.2% |
|
② To use an e-voting system |
80.2% |
89.1% |
78.2% |
59.2% |
|
③ To hold the general meeting on a date outside the peak period |
70.9% |
79.5% |
69.4% |
59.2% |
|
④ To provide predictability in cash dividends |
42.1% |
57.7% |
37.9% |
21.1% |
|
⑤ To notify shareholders of the dividend policy and payout plans at least once a year |
44.7% |
66.8% |
35.5% |
19.7% |
|
⑥ To establish and operate a CEO succession policy |
35.8% |
53.6% |
26.6% |
14.8% |
|
⑦ To establish and operate an internal control policy such as risk management |
76.1% |
90.9% |
69.4% |
58.5% |
|
⑧ For the chairperson of the board to be an outside director |
13.6% |
22.7% |
8.1% |
4.2% |
|
⑨ To use a cumulative voting system |
3.2% |
5.0% |
1.6% |
2.1% |
|
⑩ To have a policy preventing the appointment of disqualified executive officers |
58.7% |
75.5% |
50.0% |
38.7% |
|
⑪ To ensure that not all board members are of the same gender |
53.0% |
80.9% |
34.7% |
27.5% |
|
⑫ To establish an independent internal audit department (to provide supports) |
48.0% |
52.3% |
49.2% |
38.0% |
|
⑬ To include a specialist in accounting or finance in internal audit bodies |
87.9% |
97.7% |
85.5% |
73.9% |
|
⑭ For internal audit bodies to hold quarterly meetings with external auditors |
62.6% |
84.1% |
61.3% |
30.3% |
|
⑮ To adopt procedures allowing internal audit bodies to access material management information |
98.6% |
100.0% |
99.2% |
95.8% |
|
Average |
54.3% |
67.1% |
49.3% |
38.6% |
Regarding general meetings and shareholder communications, the KRX noted that many listed companies have continued efforts to enhance shareholder voting rights, particularly by adopting electronic voting systems (80.2%), and by holding general meetings on staggered dates (70.9%). Additionally, the interval between the date of the general meeting and the date of convocation notice has gradually increased, allowing shareholders more time to review the meeting agenda.
|
Total Assets |
2023 |
2024 |
2025 |
|
≥ KRW 2 trillion |
22.2 days |
23.1 days |
23.4 days |
|
≥ KRW 1 trillion and < KRW 2 trillion |
18.9 days |
19.1 days |
20.7 days |
|
≥ KRW 500 billion and < KRW 1 trillion |
- |
18.4 days |
20.5 days |
|
Total |
21.0 days |
20.6 days |
21.9 days |
Regarding the board of directors, the KRX found that most companies have established support systems for outside directors: 90.7% assign dedicated staff to assist outside directors in performing their duties, and 80.0% offer training programs. However, indicators related to board diversity and independence, such as gender diversity (53.0%) and appointing a majority of outside directors (55.7%), still require improvement.
Compliance with indicators related to the composition and institutional framework of audit bodies remains consistently high: 87.9% of companies have at least one member with expertise in accounting, finance, or auditing, and 98.6% have procedures to ensure audit bodies have access to key management information. Still, there is room for improvement in the operation of audit bodies, such as establishing an independent internal audit department (48%) and holding quarterly meetings with external auditors (62.6%).
Companies are advised to monitor trends in the corporate governance reports of all listed companies and to proactively identify and address any deficiencies or areas for improvement by benchmarking their own corporate governance practices against those of other listed companies operating in the same or similar industries, with reference to compliance with key indicators and current governance practices.
In particular, emphasis has been placed on ensuring the procedural legitimacy of board decision-making and enhancing communication with shareholders, so that directors fulfill their duty to protect shareholders' interests under the first amendment to the Korean Commercial Code (“KCC”), and reduce the risk of liability for non-compliance. Both the market and companies are therefore closely monitoring the need to strengthen governance, including improving compliance with the 15 key indicators in governance reports.
Furthermore, since the second amendment to the KCC has expanded the separate election of audit committee members and mandated cumulative voting, securing institutional investors’ support for management and the board has become increasingly important at general meetings of shareholders. To manage governance risks and gain this support from institutional investors, it is essential to proactively improve the compliance rate of key indicators in corporate governance reports.
Please note also that disclosure regulations may be further strengthened, including amendments to the guidelines on corporate governance disclosure.
