Lee focuses on corporate governance reform...
to push for Commercial Act amendment again
Kim emphasizes tax reform...
benefits for long-term investors
Lee Jae Myung, the Democratic Party of Korea candidate, and Kim Moonsoo, the People Power Party candidate, both running in the 6·3 presidential election, have each expressed their commitment to resolving the so-called "Korea Discount" and boosting the Korean stock market. However, Lee is focusing more on improving corporate governance and protecting minority shareholders, including amending the Commercial Act and institutionalizing the destruction of treasury shares, while Kim is placing greater emphasis on tax benefits such as the separation of dividend income taxation.
Lee Jae Myung, the presidential candidate of the Democratic Party of Korea, is appealing for support at a campaign rally held at Gyeyang Station Square in Incheon on the 21st. 2025.5.21 Photo by Kim Hyunmin
Lee focuses on improving corporate governance...to push for Commercial Act amendment again
According to the Democratic Party of Korea's presidential policy pledge book released on May 28, Lee Jae Myung has announced plans to again pursue an amendment to the Commercial Act that would expand the duty of loyalty of directors to include "shareholders," in order to protect the rights and interests of minority shareholders through improved corporate governance. Previously, an amendment to the Commercial Act led by the opposition passed the National Assembly, but was ultimately scrapped after the government exercised its right to request reconsideration (veto), resulting in a re-vote and its rejection.
Lee also plans to make it mandatory for companies above a certain size to appoint a certain proportion of independent directors who can provide effective oversight independent of management. He intends to gradually expand the separate election of audit committee members for large listed companies and to activate cumulative voting for these companies. In addition, he will encourage the mandatory implementation of electronic voting and proxy voting for large listed companies, as well as the introduction of non-binding shareholder proposals.
Lee has also emphasized his commitment to eradicating controlling shareholders' pursuit of private interests by abusing capital or profit-and-loss transactions. To this end, he will require the application of a fair price that considers stock price, asset value, and profit value when determining the price for mergers and acquisitions (M&A) involving listed companies. In so-called "split-off listings," new shares will be preferentially allocated to ordinary shareholders of the parent company, and he will institutionalize the principle of destroying treasury shares held by listed companies. He also plans to introduce a mandatory tender offer system to share management premiums in corporate acquisitions and guarantee exit opportunities for minority shareholders.
To improve supply and demand conditions and liquidity in the domestic stock market, Lee will revise regulations to attract more foreign investors and actively pursue Korea's inclusion in the Morgan Stanley Capital International (MSCI) Developed Markets Index. He will also consider restructuring the stock market based on new criteria such as business performance, liquidity, and corporate governance, applying tailored listing and maintenance requirements for each segment. Additionally, to ensure fair market order, he has pledged to introduce a "one-strike-out" system, under which anyone involved in stock price manipulation even once will be permanently banned from the stock market.
Kim Moonsoo, the presidential candidate of the People Power Party, is campaigning at Banghak Intersection in Dobong-gu, Seoul on the 26th. 2025.5.26 Photo by Kim Hyunmin
Kim to push for tax reform...benefits for long-term investors
Kim Moonsoo has also declared his intention to revitalize the stock market, but differs in his specific approach. According to the People Power Party's presidential policy pledge book, Kim plans to introduce tax reforms, such as granting tax benefits to long-term stockholders or fund investors. Specifically, he proposes exempting up to 50 million won of dividend income from taxation and imposing a 20% separate tax on income exceeding that amount.
In addition, he will expand the annual contribution and tax exemption limits for Individual Savings Accounts (ISA) to 40 million won and 10 million won, respectively, offering further tax benefits to long-term stock investors. Through these measures, he aims to promote long-term rather than short-term speculative investment.
Regarding corporate governance reform, unlike Lee who has proposed amending the Commercial Act, Kim supports the current government's position of amending the Capital Markets Act as an alternative. Instead of amending the Commercial Act to apply to unlisted small and medium-sized enterprises, he plans to significantly strengthen shareholder protection obligations and enhance the expertise of outside directors for listed companies only, thereby improving corporate governance.
To protect the rights and interests of minority shareholders, Kim will impose obligations to protect shareholders' legitimate interests in the event of a physical division or M&A involving a listed company. He will also introduce a mandatory tender offer system to strengthen protections for minority shareholders in the event of a change in management control.
Furthermore, Kim will impose punitive fines for unfair trading and accounting fraud, and restrict participation in the stock market for violators. He plans to increase personnel at the joint investigation team for financial crimes at the Seoul Southern District Prosecutors' Office and strengthen the use of artificial intelligence (AI) to detect abnormal trading.
Kim has also pledged to actively pursue Korea's inclusion in the MSCI Developed Markets Index during his term. In particular, he announced that the president will personally conduct investor relations (IR) sessions with overseas investors to promote the Korean capital market. In addition, he plans to establish a Financial and Economic Advisory Committee by expanding the existing F4 meeting?which includes the Deputy Prime Minister for Economic Affairs, the Governor of the Bank of Korea, the Chairman of the Financial Services Commission, and the Governor of the Financial Supervisory Service?to include private sector experts. He will also activate market briefings to reduce policy uncertainty.
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