"Resolving Governance Issues in Korean Companies by Introducing Directors' Duty of Loyalty to Shareholders"

Chairman Lee Nam-woo "Supports Financial Supervisory Service Chief Lee Bok-hyun's Opinion on Commercial Act Amendment"

The Korea Corporate Governance Forum announced on the 22nd that corporate governance issues can be resolved by introducing directors' fiduciary duties to shareholders.

Namwoo Lee, Chairman of the Korea Corporate Governance Forum, stated, "As is widely known, in the United States, directors' fiduciary duties to shareholders are firmly established through precedent and law," adding, "Not only the U.S., but also the capital markets of advanced countries such as the U.K., Japan, and the OECD guidelines all impose fiduciary duties on directors toward shareholders." He further pointed out, "The absence of this is one of the main causes of the Korea discount," and questioned, "How can we explain the fact that while shouting 'Invest K-Finance' in New York, we lack even the basic legal principles of capital markets that all advanced countries possess?"

He continued, "The government should promptly begin legislative discussions together with relevant ministries such as the Financial Services Commission and the Ministry of Justice," and emphasized, "At the very least, it should urgently introduce this for listed companies whose shares are bought and sold by the general public, who are the minimum protection targets."

Additionally, Chairman Lee expressed support for the opinion of Financial Supervisory Service Governor Bokhyun Lee regarding amendments to the Commercial Act. He said, "I hope the government's schedule, which mentioned 'the goal is to set the direction for governance improvement policies before the formal inauguration of the National Assembly and is preparing related public hearings or events,' proceeds without any setbacks," and added, "Furthermore, I request that the government and political circles actively engage not only in introducing fiduciary duties to shareholders but also in improving laws and systems that deepen the Korea discount, accelerate capital outflows, and sever the wealth of future generations."