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FSC and KRX Publish Draft Guidelines for Establishment and Disclosure of Corporate Value-Up Plan


The government’s Corporate Value-up Program, which aims to help undervalued companies, such as those with low PBRs or PERs, has attracted considerable attention from businesses and other market players. Establishing plans to effectively respond to the new policy has been a top priority for most listed companies’ finance, strategy and legal departments.


On February 26, 2024, the Financial Services Commission (“FSC”) unveiled the Corporate Value-up Program (Link).


On March 14, 2024, the FSC met with institutional investors to promote the Corporate Value-up Program and announced key initiatives, including the revision of the stewardship code and the development of the Korea value-up index (Link).


On April 2, 2024, the FSC met with businesses again with a particular focus on accounting and dividend payouts and additionally announced incentives for companies that achieve outstanding performance in the Corporate Value-up Program (Link).

In relation to the Corporate Value-up Program, the FSC, the Korea Exchange (“KRX”) and the Korea Capital Market Institute invited businesses to their second seminar, and explained the government’s initiatives to help companies implementing the Corporate Value-up Program on May 2, 2024 and published draft guidelines for corporate value-up plans (the “Guidelines”) (Link).
The Guidelines outline a set of recommendations listed companies can use to design their own value-up plans. Companies are encouraged to voluntarily disclose their corporate value-up plans periodically (e.g., annually) on the Korea Investors’ Network for Disclosure System (“KIND”), a KRX-operated platform for online disclosure by listed companies. The purpose of such disclosure is to facilitate funding for businesses and increase the benefits from third party investments.
According to the Guidelines, corporate value-up plans can be best described with the following five keywords: (i) voluntary; (ii) future-oriented (focusing on goals and plans); (iii) comprehensive (involving comprehensive information sharing); (iv) selective and focused (focusing on matters vital to enhancing corporate value); and (v) responsibility of the board of directors (to recommend reporting, deliberation, and resolution of the board of directors).
The Guidelines present the following six sections that companies can include in their corporate value-up plans and provide detailed instruction on each section.



Company Overview

  • State basic information of the company, including the type of business, major products and services, corporate history, etc.

Current Status Analysis

  • Analysis of current status of business: Analyze the current status of the business and its multifaceted and multidimensional aspects, including the relevant market environment, competitive advantages, and potential risks.

  • Selection of key indicators: Select key indicators, out of various financial and non-financial indicators, that align with the company’s mid to long-term goals to improve corporate value considering the individual characteristics of the company, and assess the indicators.

    “Financial indicators” include (i) market valuation (including PBR and PER); (ii) capital efficiency (including ROE, ROIC, COE, and WACC); (iii) shareholder returns (including dividend payouts, cancellation of treasury stock, and TSR); and (iv) growth potential (including growth rate of sales, profits, and assets).

    “Non-financial indicators” include (i) items already required to be included in the company’s Corporate Governance Report, that are subject to disclosure, such as the protection of the rights and interests of general shareholders, responsibility of the board of directors, and independence of auditors; and (ii) matters of interest to institutional investors and other market participants.

  • Analysis of indicators: Conduct a time series analysis and compare the result with the industry average or that of competitors to accurately identify the current status of the company.

Goal Setting

  • Set mid to long-term goals in relation to the key indicators selected in the section above.

  • Regarding the company’s concern that it may become subject to penalties for unfaithful disclosure if it fails to achieve the goals or implement plans, an exemption program is in place in accordance with the KRX disclosure regulations and a similar exemption program will apply to the Corporate Value-up Program.

  • If the company needs to change the goals due to unavoidable reasons, such as rapid changes in the business environment, the company can revise or supplement the goals through a corrective disclosure.


  • Set out specific plans to achieve the goals (such as investment in each business division, expansion of R&D investment, restructuring of business portfolio, shareholder returns through cancellation of treasury stock and dividend payouts, or divestment of underperforming assets).

  • In addition, the company may link the company’s executives compensation scheme to the corporate value-up plans. Such approach will be helpful to emphasize the commitment and encourage the active participation of executives and employees.

Implementation and Evaluation

  • It is encouraged to disclose corporate value-up plans on a periodic basis, such as annually.

  • State the efforts the company has made to implement the corporate value-up plans in-between disclosures (It is also encouraged to state the company’s achievements and areas requiring further improvement).


  • Describe the progress, plans, and performance in terms of communications with shareholders and market participants. (It is essential to develop and implement a plan for quality improvement (e.g., to effectively communicate with them)).


Each section above must be filled out with detailed and specific information. In particular, in the “Current Status Analysis” section, a company should analyze the current status of its business looking at it from multifaceted and multidimensional dimensions, and based on the result of such analysis, select and analyze various key financial and non-financial indicators that can further the improvement of corporate value in the mid to long-term, and outline specific plans (such as plans for investment in each business division, expansion of R&D investment, restructuring of business portfolio, shareholder return through cancellation of treasury stock and dividend payouts, or divestment of underperforming assets) to achieve the company’s mid to long-term goals related to the above key indicators. Considering the above, in order to establish corporate value-up plans for disclosure, a company should analyze its business thoroughly and in a comprehensive manner, covering strategic, financial and legal aspects.

From a legal perspective, it is crucial for a company to go through actual procedures and prerequisites to implement its corporate value-up plans, such as investment in each business division, expansion of R&D investment, restructuring of business portfolio, shareholder return through cancellation of treasury stock and dividend payouts, or divestment of underperforming assets. In addition, a company should pay closer attention to regulations on unfair trading practices, such as unfaithful disclosure and fraudulent and illegal transactions, under the Financial Investment Services and Capital Markets Act. (According to the Guidelines, caution must be taken for a company not to be designated as an “unfaithful disclosure company” or considered as having engaged in “unfair tradings” for false disclosure. However a company that merely fails to either achieve its goals or make accurate predictions will not be designated as an unfaithful disclosure company or considered as having engaged in unfair tradings.)
Although companies can voluntarily decide whether to establish their corporate value-up plans and disclose them, activist shareholders and institutional investors may use the Corporate Value-up Program as an opportunity to assertively express their opinions on companies’ measures to tackle undervaluation, make advisory shareholder proposals to increase dividend payouts and pursue re-capitalization. Companies may receive numerous requests to disclose their corporate value-up plans in the process of responding to minority shareholders and operating general shareholders’ meetings.

The Guidelines also suggest incentives for companies that link the Corporate Value-up Program with their executives’ compensation schemes, through measures such as including indicators on capital profitability or corporate value growth when determining executives’ compensation. Depending on a company’s performance under the Corporate Value-up Program, including increases in corporate value and stock prices, issues may arise as to whether executives’ compensation is appropriate.
The FSC will open a period during which the public is invited to comment on the Guidelines and publish the final version of the Guidelines in May. It will also announce a series of follow-up support measures, including an integrated website for the Corporate Value-up Program, results of the comparison of investment indicators, training programs for the board of directors and employees who make disclosures, and consulting and English translation services for small and medium-sized businesses. Then, it will develop the Korea value-up index in the third quarter and list ETFs linked to the index in the fourth quarter of 2024. Then, details of tax benefits that will be available to companies that achieve outstanding performance under the Corporate Value-up Program will be unveiled.


[Korean Version]