Reintroducing Cumulative Voting and Expansion of Separate Election of Audit Committee Members
Aiming for Passage in July Provisional Session
Pushing for 'President Lee's Pledge' on Principled Cancellation of Treasury Shares and Amendments to the Capital Markets Act
On July 3, the Democratic Party of Korea announced plans to pursue even stronger amendments to the Commercial Act, following the passage of the 'fiduciary duty to shareholders' amendment in the National Assembly. The party intends to finalize the introduction of cumulative voting and the expansion of separate election of audit committee members?measures that were previously put on hold due to bipartisan disagreements?during the provisional session of the National Assembly this month.
Kim Byungki, acting party leader and floor leader of the Democratic Party, stated at a policy coordination meeting on the same day, "This amendment to the Commercial Act fulfills President Lee Jaemyung's promise and represents a more advanced revision than before," adding, "We will do our utmost to process the introduction of cumulative voting and the expansion of separate election of audit committee members within the July provisional session, after gathering opinions through a public hearing."
The party's 'KOSPI 5,000' special committee declared at a press conference, "This Commercial Act amendment is only the beginning. Even stronger amendments are yet to come," and added, "We will continue to push for further and swifter revisions to the Commercial Act."
Previously, the Democratic Party had sought to introduce a mandatory cumulative voting system and expand the separate election of audit committee members from one to at least two for companies with assets of 2 trillion won or more, alongside the introduction of the fiduciary duty to shareholders.
However, after bipartisan consultations, it was decided that separate public hearings would be held on cumulative voting and the expansion of separate election of audit committee members, so these issues were not addressed in the plenary session this time.
Following this, the Democratic Party plans to collect additional opinions through public hearings and resume efforts to promote cumulative voting and the expansion of separate election of audit committee members.
In addition, the Democratic Party will push for legislation to realize President Lee's pledge for the 'principled cancellation of treasury shares.' The party plans to address legislation related to the cancellation of treasury shares during this year's regular session of the National Assembly, following internal discussions.
Furthermore, the Democratic Party intends to pursue amendments to the Capital Markets Act to protect shareholders during corporate restructuring processes such as mergers and spin-offs, as well as additional legislation to strengthen supervisory administration of the stock market. The party also plans to continue discussions on reducing criminal liability for companies during the process of amending the Commercial Act.
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