Act, a shareholder action platform based on small shareholder certification, announced on the 21st that it will conduct a 'Shareholder Letter Campaign' targeting the top 20 major companies in Korea to urge the introduction of systems to strengthen the shareholder rights of individual shareholders.
The campaign targets the top 20 companies in South Korea, including Samsung Electronics, SK Hynix, LG Energy Solution, Naver (NAVER), Kakao, Kia, LG Electronics, POSCO Holdings, Celltrion, SK, KT&G, LG Chem, Doosan Enerbility, Samsung SDI, Samsung C&T, Hyundai Mobis, SK Innovation, Korea Electric Power Corporation, and HMM.
The core demands of this shareholder letter campaign are fourfold: ▲ introduction of cumulative voting system ▲ regularization of investor relations (IR) meetings for individual shareholders ▲ insertion of small shareholder protection clauses in the articles of incorporation ▲ introduction of 'recommendatory shareholder proposals' related to ESG (Environmental, Social, and Governance) issues.
First, to expand the diversity of corporate board composition, the campaign demanded the 'introduction of the cumulative voting system.' Currently, many large domestic companies' boards are operated centered around major shareholders, limiting opportunities for individual shareholders to elect directors they desire. With the introduction of the cumulative voting system, individual shareholders can exercise substantial influence through director appointments, balancing decision-making with major shareholders.
To strengthen communication with individual shareholders, the campaign also demanded the 'regularization of investor relations (IR) meetings.' Currently, most IR meetings are centered on institutional investors, and individual shareholders have almost no opportunity to communicate directly with corporate management. The campaign argues that institutional improvements are necessary so that individual shareholders can better understand corporate strategies and major decisions through regular IR meetings.
They also argued that 'small shareholder protection clauses should be inserted into the corporate articles of incorporation' to legally guarantee the rights of individual shareholders. This demand calls for strengthening the monitoring role over corporate management and establishing legal measures to make the protection of individual shareholders a fundamental principle of corporate governance.
Introducing shareholder proposals related to ESG issues is also one of the key demands. ESG is directly linked to sustainable corporate growth, and Act insists that recommendatory shareholder proposals should be officially introduced so that shareholder opinions can be reflected in corporate policies.
Yoon Tae-jun, Director of Act, said, “The moment you hold even one share, you are not just an investor but an owner of the company. We will continue shareholder actions to further strengthen the rights of individual shareholders.” He added, “As small shareholders, who have been marginalized in major decision-making processes, begin to unite, we expect changes in the market.”
Meanwhile, since December last year, Act has been conducting various campaigns to enhance shareholder value for listed companies under the catchphrase ‘Resolving Korea Discount,’ including making shareholder proposals. More detailed information about the campaign can be found through the Act app, and any shareholder of the relevant stocks can participate.
Such small shareholder activities have also driven corporate changes. Among the corporate value enhancement activities Act conducted earlier this year targeting Emart, the demands for ▲ dividend expansion ▲ treasury stock cancellation ▲ strengthening shareholder communication were accepted by the company on the 11th, demonstrating that active participation by small shareholders has yielded meaningful results.
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