Lee Bok-hyun "Requesting Activist Funds to Present 'Long-term Growth Strategy'"

18th 'Corporate and Shareholder Activism Coexistence and Development Meeting'
"Unreasonable Short-term Profit Demands Undermine Corporate Growth Drivers"
Companies Urged to 'Actively Communicate' with Shareholders

On the 18th, Lee Bok-hyun, Governor of the Financial Supervisory Service, met with domestic activist funds and urged them to "propose a 'long-term growth strategy' that can develop together with companies rather than making excessive demands focused only on short-term profits." The photo shows Lee Bok-hyun, Governor of the Financial Supervisory Service. Photo by Heo Young-han younghan@

On the 18th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), met with domestic activist funds and urged them to "propose a 'long-term growth strategy' that can develop together with companies rather than making excessive demands focused solely on short-term profits."

Governor Lee made these remarks during a meeting titled "Dialogue for Coexistence and Development between Companies and Shareholder Activism," held at the Korea Financial Investment Association in Yeouido, Seoul, in the morning. He stated, "Excessive demands that pursue only short-term profits not only hinder the long-term growth engines of companies but can also become obstacles to the development of the capital market."

The meeting, hosted by the FSS, was organized with the purpose of directly hearing opinions from various sectors to maintain a balanced perspective on shareholder activism. Attendees included shareholder activism institutions such as Truston, KCGI, Anda, Align, and Cha Partners; companies and related organizations including KT&G, DB HiTek, Shinhan Financial Group, JB Financial Group, the Korea Listed Companies Association, the KOSDAQ Association, and the Korea Chamber of Commerce and Industry. Market experts from the National Pension Service, Korea ESG Standards Institute, Korea Capital Market Institute, and Korea Financial Investment Association were also present.

Governor Lee also emphasized, "As seen in this year's general shareholders' meeting results, if the activist strategy is not solid, it may fail to gain shareholders' support and end as an empty campaign. I ask that you lead the growth of companies and the capital market through responsible, transparent, professional, active, and persuasive shareholder activities."

According to the FSS, the number of listed companies and agenda items receiving shareholder proposals at regular general meetings increased from 26 companies (59 cases) in 2020 to 40 companies (93 cases) in 2024. The approval rate for shareholder proposals at the 2024 regular general meetings was 30% (28 out of 93 cases). Among these, 26 cases were related to director appointments, and 2 cases concerned shareholder returns.

Governor Lee urged, "Companies should listen carefully to shareholders' voices and actively communicate with shareholders' legitimate demands. Market experts are also requested to continuously provide advice based on objective analysis and evaluation so that the nascent shareholder activism can be soundly established in the capital market."

Furthermore, the supervisory authorities discussed ways to form a virtuous cycle structure in the capital market. Companies expressed concerns about the negative impact of shareholder activism on corporate reputation and management stability and mentioned the need for institutional improvements to support companies. They agreed on the positive effects of changes in shareholder activities and strengthening shareholder rights.

Activist funds mentioned the negative perceptions of shareholder activism activities and difficulties in exercising shareholder rights due to corporate non-cooperation. However, the activist institutions themselves acknowledged the need to consider a balance between the company's long-term growth goals for the development of the capital market.

The Korea Financial Investment Association stated that shareholder activism needs to operate as a partner supporting the enhancement of corporate value. The Korea ESG Institute said that if the long-term interests of companies and shareholders are pursued, it can be positively evaluated. The National Pension Service expressed its intention to conduct in-depth analysis on whether shareholder activism contributes to increasing shareholder value. The Korea Capital Market Institute suggested the need to improve the disclosure system so that such activities can be transparently disclosed to investors.