'Expansion of Directors' Duty of Loyalty' Commercial Act Amendment Passed in Legislation and Judiciary Committee Led by Opposition (Update)

Plan to Approve at the Plenary Session on the 27th

The amendment to the Commercial Act, which centers on the duty of directors to act faithfully toward shareholders, has passed the subcommittee of the National Assembly's Legislation and Judiciary Committee led by the opposition party.

On the 24th, the first bill review subcommittee of the Legislation and Judiciary Committee held a meeting and approved the amendment to the Commercial Act containing these provisions solely by the opposition party.

Yonhap News

The amendment to the Commercial Act expands the scope of directors' duty of loyalty from the existing 'company' to 'company and shareholders.' Additionally, the amendment includes a provision mandating the introduction of electronic general meetings of shareholders for listed companies.

The opposition parties, including the Democratic Party of Korea, have emphasized normalizing the stock market through shareholder protection. The People Power Party has opposed the amendment, arguing that it would infringe on corporate management rights. Lawmakers from the ruling party who belong to the subcommittee left the meeting room just before the vote on the amendment to the Commercial Act.

The opposition plans to process the amendment passed on this day at the full meeting of the Legislation and Judiciary Committee and then approve it at the plenary session on the 27th.