On January 29, 2020, the Enforcement Decree of the Korean Commercial Code (the “Amended EDCA”) was promulgated. The Amended EDCA concerns improvements to corporate ownership and governance as a key challenge to be addressed as part of the “plan for rapid achievement of a fair economy,” which was announced by the ruling party and the Korean government after mutual consultation.
Generally, the Amended EDCA focuses on:
- Strengthening outside director qualifications to ensure transparency and soundness of corporate management;
- Strengthening the related disclosure system for officer candidates, and making it mandatory to provide business/audit reports when a general shareholders meeting is convened (to enable shareholders’ ability to exercise their rights based on sufficient information); and
- Supporting the participation of all shareholders in the general shareholders’ meeting of listed companies by making electronic voting more convenient (discussed in further detail below).
Details & Key Takeaways:
- Qualifications of outside directors of listed companies strengthened (Article 34(5) of the Amended EDCA)
- Disclosure system relating to listed company officer candidates strengthened (Article 31(3) of the Amended EDCA)
- Business/audit reports required upon notice/announcement of convening a listed company’s general shareholders meeting (Article 31(4).3 of the Amended EDCA)
- Electronic voting at general shareholders meetings enhanced (Article 13 of the Amended EDCA)
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