Below are key takeaways from ISS’ recently released 2023 South Korea Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- The 2023 Korea proxy season is expected to continue with similar meeting formats and concentration of meetings to 2022: The majority of Korean companies are expected to hold socially distanced physical meetings with a few large companies holding virtual meetings in addition to physical in-person AGMs. Despite the government’s effort to mitigate the concentration of the meetings, close to 70 percent of companies covered by ISS are expected to hold their AGMs during the last week of March.
- Improving board gender diversity: The number of female directors serving on the KOSPI and KOSDAQ listed companies increased in 2022 compared to the previous year most female directors were outside directors from legal and academic backgrounds, rather than executives. Under the ISS Korea universe, 86 percent of large-size companies subject to the gender diversity legal requirements have at least one female director serving on the board. The remaining large companies are likely to nominate female directors in the upcoming AGM to meet the legal requirements.
- Governance improvements with the start of new administration: Actions towards enhancing corporate governance and minority shareholder rights accelerated in legal, financial, and regulatory realms throughout 2022. Notably, a long debated argument on the lack of minority shareholder protection in corporate restructure cases escalated to regulatory developments. Also, the changed leaderships among financial authorities and the National Pension Service addressed governance risk, paying particular attention to the financial institutions, governmental companies, and an internet giant, Kakao Corp. Meanwhile, shareholder activism cases continued to increase and more discussions on shareholders’ legal actions also developed throughout the year and are expected to have an impact in 2023 season.
- Presidential pardon given to convicted executives: In August 2022, the president gave presidential pardons to convicted chaebols to vitalize business activities amid the global economic crisis. Among the 1,693 specially pardoned people were the heirs of Samsung Group (Jae-yong Lee, JY Lee) and Lotte Group (Dong-bin Shin), Chairman Se-Ju Chang of Dong-guk Mills, and Chairman Deok-su Kang of STX Group.
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By: Candice Kim, Jieun Chang, Jaesung Lee