Ruling and Opposition Parties Agree to Seek Consensus on Commercial Act Amendment... 'Compromise Attempt Set for Subcommittee on the 2nd'

Referred to the Legislation and Judiciary Committee Subcommittee for Detailed Discussion
People Power Party Insists on the Need for Supplementary Measures
Key Issues Such as the 3% Rule Remain

On July 1, the floor leadership of both the ruling and opposition parties reached an agreement to jointly process the Commercial Act amendment bill during a meeting. They decided to delegate the specifics of the amendment direction to the bill review process of the Legislation and Judiciary Committee.

Kim Byungki, acting leader and floor leader of the Democratic Party of Korea, and Song Eonseok, acting leader and floor leader of the People Power Party, met at the National Assembly on this day to negotiate over the Commercial Act amendment bill.

After the meeting, Yoo Sangbeom, deputy floor leader of the People Power Party, told reporters, "Both parties have sufficiently communicated their positions regarding the Commercial Act amendment bill, and we agreed to make efforts so that it can be processed by consensus as early as tomorrow."

Regarding the specific direction of the amendment, Moon Jinseok, deputy floor leader of the Democratic Party, explained, "It is expected that there will be sufficient discussion during the standing committee's bill review."

Lee Chunseok, Chairman of the National Assembly Legislation and Judiciary Committee, is striking the gavel at the 1st plenary session of the 426th National Assembly (extraordinary session) held at the National Assembly on July 1, 2025. Photo by Kim Hyunmin

Earlier that day, the Legislation and Judiciary Committee referred the Commercial Act amendment bill, which had been submitted to the plenary session, to its subcommittee. The People Power Party argued that the bill proposed by the opposition should be reviewed together, raising concerns about an increase in breach of trust lawsuits and potential infringement on management rights.

The Commercial Act amendment bill, reintroduced under the initiative of the Democratic Party, includes the following: explicit codification of directors' duty of loyalty to shareholders; expansion of the number of directors serving as separately elected audit committee members; introduction of electronic general shareholders' meetings; strengthening of cumulative voting for large listed companies; and the so-called "3% rule," which limits the voting rights of the largest shareholder and related parties to 3% when electing audit committee members. The bill also stipulates that, with the exception of the electronic shareholders' meeting provision, the amendments will take effect immediately upon promulgation by the president.

In relation to this, lawmakers from the People Power Party argued that the Commercial Act amendment bill requires supplementation. Jang Donghyuk, the People Power Party's secretary on the Legislation and Judiciary Committee, stated, "Regarding the duty of loyalty to shareholders, there needs to be a mechanism to prevent excessive litigation. The mandatory cumulative voting system, expansion of the number of separately elected audit committee members, and strengthening of the 3% rule will have significant impacts, and there is a need to defend against hostile capital. Countries that have adopted such systems also have supplementary measures in place, so I hope the bill will be revised to address foreseeable issues by being discussed together with various amendment bills proposed by opposition lawmakers."