Companies Gradually Adopt Electronic Voting for General Meetings... Ministry of Justice May Accelerate Mandatory Implementation

The 51st Annual General Meeting of Samsung Electronics is being held on the 18th at the Suwon Convention Center in Suwon, Gyeonggi-do. To prevent the spread of the novel coronavirus infection, Samsung introduced electronic voting for the first time since its founding in 1969 at this shareholders' meeting. Photo by Jinhyung Kang, Suwon aymsdream@

[Asia Economy Reporter Kim Hyung-min] The novel coronavirus infection (COVID-19) is significantly accelerating the adoption of electronic voting in corporate general meetings of shareholders (GMS). In particular, the Ministry of Justice, which is promoting the mandatory introduction of electronic voting, is closely monitoring this situation.

Doosan Infracore, which is holding its GMS on the 24th, is actively encouraging shareholders to use electronic voting. The company stated in the notice of convocation, "Shareholders who find it difficult to attend in person due to the COVID-19 situation are kindly requested to actively utilize (electronic voting, etc.)."

Electronic voting for GMS was first introduced with the 2009 amendment to the Commercial Act, but companies have been reluctant to use it. As of early this month, 30% of all listed companies had never conducted electronic voting. This is due to concerns that electronic voting could easily create a voting battle between minority shareholders and management. A lawyer familiar with business circles said, "It is very unusual that companies that were previously reluctant to use electronic voting are taking the lead," adding, "It seems that an atmosphere has formed recognizing electronic voting as a good alternative when situations like the COVID-19 outbreak occur." Large companies such as Hyundai Construction (GMS on the 19th) and Samsung Electronics (GMS on the 18th) are also encouraging shareholders to use electronic voting.

The Ministry of Justice regards this series of changes as very encouraging. The Ministry is promoting amendments to the Commercial Act that include mandatory electronic voting to strengthen the rights of minority shareholders and to check the abuse of management rights by major shareholders. The Korea Corporate Governance Forum issued a statement on the 11th emphasizing, "The introduction of the electronic voting system is necessary not only because of the COVID-19 situation but also to improve minority shareholders' accessibility to general meetings of shareholders and to revitalize such meetings."