54.7% of Venture Companies Say "Commercial Act Amendment Negatively Affects Business Management"

Results of Korea Venture Business Association Survey
Two Out of Three Listed Companies Express Concerns
"Innovative Capabilities of Venture Companies Must Not Be Undermined"

More than half of venture companies expressed concerns that the recently passed amendment to the Commercial Act by the National Assembly, specifically the clause expanding the duty of loyalty for directors, would negatively impact management and decision-making.

According to the 'Survey on Venture Companies' Opinions on the Commercial Act Amendment' released by the Korea Venture Business Association on the 2nd, 54.7% of the 169 respondent companies held negative views. Among listed companies, 66.7% expressed concerns that the clause could adversely affect corporate management and decision-making.

Venture companies responded that the expansion of the duty of loyalty for directors could lead to various side effects such as ▲infringement on management rights ▲delays in decision-making ▲increased legal risks ▲conflicts of interest between shareholders and companies.

Additionally, regarding the 'mandatory concurrent holding of electronic shareholders' meetings,' 38.0% responded that it would negatively impact corporate management and decision-making. Their main concerns included ▲inefficiency in decision-making ▲increased corporate burden due to system establishment and expansion of IT personnel ▲and the possibility of excessive management intervention by minority shareholders.

Lee Jeong-min, Secretary General of the Korea Venture Business Association, stated, "As the responsibility to consider the interests of diverse shareholders increases, key corporate activities such as capital attraction, mergers and acquisitions, and research and development investment may be restrained, potentially weakening the innovative growth engine of venture companies." He added, "While we agree on the necessity of protecting shareholder rights, we request supplementary legislation and coordination from the National Assembly and related agencies to ensure that the innovative capabilities of venture companies are not undermined."