As previously noted, regulatory changes aimed at improving corporate governance and strengthening minority shareholder rights are proceeding swiftly through three rounds of amendments to the Korean Commercial Code (the “KCC”). Furthermore, specific details of related policies and bills, such as measures to protect shareholders of parent companies in relation to dual listings, as well as improvements to the M&A regime for listed companies, have been announced, drawing significant attention from both investors and the corporate sector (Link). Against this backdrop, the standards for exercising shareholder rights, including the stewardship code for institutional investors, are also expected to be revised and strengthened.

Accordingly, the scope of issues raised by minority shareholders and others has recently expanded beyond customary matters like shareholder returns and director appointments to include specific topics such as: (i) the Corporate Value-up Program; (ii) executive compensation structures and conditions; and (iii) corporate restructurings, including mergers and spin-offs. This has led to greater market debate and increased media attention. As a result, the 2027 annual general meeting season will require meticulous preparation, particularly in terms of shareholder and institutional investor relations and the operation of the meetings. Notably, as the aggregated 3% voting-right restriction and mandatory cumulative voting under the amended KCC will be applied for the first time at the 2027 general shareholders meetings, it will be crucial to secure the support of general shareholders, including institutional investors. Moreover, as the means for general shareholders to participate in the 2027 meetings are expected to further expand with the implementation of virtual shareholders meetings, there is an emphasis on the importance of corresponding responses and preparations in this area.

In this regard, on May 28, 2026, the Ministry of Justice issued a legislative notice for the proposed amendment to the Enforcement Decree of the KCC concerning the operation of virtual shareholders meetings and related matters (the “Proposed Amendment”), as previously advised (Link). Subsequently, following the gathering of opinions through the legislative notice and related procedures, the Proposed Amendment was passed by the State Council on July 14, 2026, and was promulgated on July 21, 2026. The contents of the amended Enforcement Decree are largely identical to the version previously circulated in the legislative notice, and the key details are as shown in the table below. The provisions relating to virtual shareholders meetings will take effect on January 1, 2027; the provisions relating to independent directors took effect on July 23, 2026; and the remaining provisions took effect immediately upon promulgation on July 21, 2026.
 

For large listed companies with total assets of KRW 2 trillion or more, which are mandated to hold virtual shareholders meetings, it will be necessary in preparation for the 2027 general meetings to diligently review internal regulations and select a service provider for the management of the virtual meeting in the second half of 2026. In particular, the following points are likely to be important: (i) adopting standards and procedures to ensure the stable operation of shareholders meetings in the event of IT failures or other disruptions; (ii) ensuring the reasonableness of any specific standards concerning the limitations placed on the frequency and duration of shareholders’ questions and remarks during virtual meetings; and (iii) selecting and appointing an appropriate managing institution equipped with adequate personnel and physical facilities to operate the meetings and protect shareholders’ personal information. Furthermore, even listed companies that are not subject to the mandatory requirement may need to review the voluntary implementation of virtual shareholders meetings from the perspective of improved shareholder communications, particularly in transactions such as corporate restructurings where heightened shareholder protection obligations apply, as well as from the standpoint of demonstrating exemplary governance. 

[Korean Version]