Economic 8 Organizations "Deep Concern Over the Passage of the Commercial Act Amendment Bill in the Legislative Subcommittee"

"Undermining Companies' Growth Will and Damaging the Industrial Foundation"

As the amendment to the Commercial Act, which expands the duty of directors' loyalty to include shareholders, passed the subcommittee of the National Assembly's Legislation and Judiciary Committee, the business community expressed concerns and urged a reconsideration of the amendment.

On the 24th, eight economic organizations including the Korea Economic Association, Korea Chamber of Commerce and Industry, Korea Federation of Small and Medium Business, Korea Employers Federation, Korea International Trade Association, Korea Federation of Medium-sized Enterprises, Korea Listed Companies Association, and KOSDAQ Association issued a statement immediately after the amendment passed the subcommittee, expressing their position.

On the 24th, at the Legislation and Judiciary Committee's Bill Review Subcommittee 1 held in the National Assembly, Subcommittee Chairman Park Beom-gye is convening a meeting to review bills including the Myeong Tae-gyun Special Prosecutor Act. 2025.2.24 Photo by Kim Hyun-min

The eight economic organizations stated, "We express deep concern over the passage of the Commercial Act amendment through the Legislation and Judiciary Committee's first subcommittee," adding, "We have continuously conveyed the problems of the amendment, which includes strengthening corporate governance, but none of our concerns have been accepted, leaving us bewildered."

They continued, "Our companies are facing unprecedented uncertainties such as sluggish domestic demand leading to low growth, the launch of Trump's second term, and the spread of protectionism," emphasizing, "As the global economic war intensifies and the competitiveness of key industries weakens, excessively tightening corporate governance is tantamount to undermining companies' growth will and damaging the industrial foundation."

They warned, "The amendment to the Commercial Act will lead to a proliferation of lawsuits against directors and be exploited as a tool for activist funds to attack management rights, making Korea a difficult country to do business in," adding, "It will lower corporate competitiveness, deepen the Korea discount, and ultimately cause enormous damage to innocent domestic minority investors."

The eight economic organizations earnestly requested, "We sincerely ask the National Assembly to carefully reconsider the amendment to the Commercial Act so that companies can focus on their core economic activities."

The amendment to the Commercial Act was passed solely by the opposition party at the first subcommittee of the Legislation and Judiciary Committee on the same day. The amendment includes expanding the duty of loyalty of directors from the existing 'company' to 'company and shareholders,' applying to both listed and unlisted corporations.