Exchange: "KOSPI Listed Companies' Compliance Rate with Key Corporate Governance Indicators at 62.3%... Slight Increase"

This year, the average compliance rate with key corporate governance indicators among listed companies on the Korea Exchange with total assets exceeding 1 trillion won was 62.3%, showing a slight improvement compared to last year (60.7%).

The Korea Exchange announced this on the 7th through the "2023 Corporate Governance Report Disclosure Inspection and Analysis Results." The mandatory submission of corporate governance reports applies to companies with total assets of 1 trillion won or more, and this year, the number of listed companies subject to this requirement increased by 21 from last year to 366.

The key governance indicators refer to 15 essential indicators that are particularly encouraged for compliance to establish transparent corporate governance. These include whether the notice of the shareholders' meeting was announced at least four weeks prior to the meeting date and whether electronic voting was conducted.

The compliance rate for key indicators was highest among large companies with assets of 2 trillion won or more, at 68.5%. Companies with assets between 1 trillion and 2 trillion won recorded a compliance rate of only 51.3%. The completeness of disclosure was also evaluated at 77 points for companies with assets over 2 trillion won and 72.2 points for those between 1 trillion and 2 trillion won. Although the overall average showed a slight improvement compared to last year, the Korea Exchange pointed out that companies with assets between 1 trillion and 2 trillion won, despite being in their second year of mandatory submission, showed a gap of more than 17 percentage points compared to large companies, indicating a need for more proactive efforts to improve corporate governance.

In particular, the completeness of corporate governance report disclosures slightly increased for large companies compared to last year, whereas companies with assets between 1 trillion and 2 trillion won saw a decline from 74.2 points last year to 72.2 points this year.

Overall, the trend that companies with higher foreign ownership or lower largest shareholder ownership tend to have higher disclosure completeness continued this year. This suggests that greater involvement of non-controlling shareholders such as foreign investors or minority shareholders enhances the transparency of corporate governance disclosures.

Starting next year, the mandatory disclosure of corporate governance reports will be expanded to listed companies with total assets of 500 billion won or more. A Korea Exchange official stated, "Based on the results of this inspection, we plan to select and reward companies with excellent corporate governance report disclosures and provide tailored education and support in preparation for the expansion of mandatory disclosure targets."