Democratic Party Holds Countermeasures Meeting on July 15
Focusing on Accelerating Commercial Act Reforms and Corporate Governance Improvements
Jin Sungjun, Policy Committee Chairman of the Democratic Party of Korea, stated, "To usher in the era of the Korea Premium, the Democratic Party will accelerate efforts to supplement and strengthen legislation related to the Commercial Act."
Jin Sungjun, Policy Committee Chairman of the Democratic Party of Korea, is holding a meeting with vice chairmen of six economic organizations at the National Assembly on the 30th to gather opinions from the business community regarding the proposed amendment to the Commercial Act. Attendees at this meeting included Park Iljun, Executive Vice Chairman of the Korea Chamber of Commerce and Industry; Kim Changbeom, Executive Vice Chairman of the Korea Economic Association; Lee Donggeun, Executive Vice Chairman of the Korea Employers Federation; Jang Seokmin, Executive Director of the Korea International Trade Association; Oh Giwoong, Executive Vice Chairman of the Korea Federation of Small and Medium Business; Lee Hojun, Executive Vice Chairman of the Korea Association of Medium Enterprises; and Jung Wooyoung, Vice Chairman of the Korea Listed Companies Association. 2025.6.30 Photo by Kim Hyunmin
At a party countermeasures meeting held at the National Assembly in Yeouido on July 15, Jin said, "JP Morgan has projected that if Korea's corporate governance reforms gain momentum, the KOSPI index could reach 5,000 within the next two years," adding, "This once again demonstrates that improvements and reforms in corporate governance are essential prerequisites for the continued positive momentum in Korea's stock market."
The recently passed amendment to the Commercial Act includes the following provisions: expanding the fiduciary duty of directors (from the company alone to both the company and its shareholders); introducing electronic general shareholders' meetings; and limiting the combined voting rights of major shareholders and their specially related parties to 3% when electing independent audit committee members (the so-called 3% rule).
The supplementary legislation mentioned by Jin includes the introduction of cumulative voting for the election of directors at large listed companies, as well as increasing the number of audit committee members elected separately. On July 11, the National Assembly's Legislation and Judiciary Committee held a public hearing to gather expert and stakeholder opinions on these two issues.
Jin explained, "Although cumulative voting is already stipulated in the Commercial Act, currently, a company's articles of incorporation can prohibit its implementation. The proposed amendment would remove this exception, serving as a measure to modernize corporate governance by preventing major shareholders from monopolizing the board of directors."
He further stated, "The same applies to expanding the separate election of audit committee members," and questioned, "The audit committee exists to monitor management, but if it is controlled by major or controlling shareholders, how can it properly fulfill its oversight function?"
Jin emphasized, "The interests of minority shareholders must not be sacrificed for the benefit of major shareholders," and stressed, "The Democratic Party will move swiftly to advance the second phase of Commercial Act amendments."
Plenary sessions are scheduled for July 23 and August 4, but the specific timeline for advancing the Commercial Act amendment has not yet been determined. After the party countermeasures meeting, party spokesperson Moon Geumjoo told reporters, "It is expected that around 26 bills will be processed on July 23, but which bills will actually pass has not yet been confirmed."
Attention is also focused on whether amendments to the Commercial Act and the Criminal Act, including the deletion of the special breach of trust provision in the Commercial Act and the explicit inclusion of the business judgment rule in the Criminal Act?proposed by lawmaker Kim Taenyon?will be passed together. Spokesperson Moon said, "Although no final decision has been made, the floor leader has also stated that the concerns of the business community regarding the breach of trust provision should be reflected, so it appears that these opinions will be taken into account."
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