Shareholder conferences of greater than 90 % of listed corporations in Korea nonetheless closely overlap, regardless of a government-led marketing campaign to unfold the dates and encourage better participation, in keeping with a report launched Monday.
The report, authored by Korea Capital Market Institute researcher Hwang Hyun-young, discovered that 96.4 % of the two,583 corporations with December fiscal year-ends held their conferences between March 20 and 31 this yr.
Notably, over 60 % of those conferences occurred on simply three working days — March 26, 28 and 31.
The findings come as monetary authorities have urged corporations to disperse assembly dates to offer shareholders extra time to take part in decision-making.
To this finish, authorities have applied insurance policies akin to providing incentives to advertise dispersion and working voluntary compliance applications.
“Even with these initiatives, the focus of shareholder conferences on the finish of March persists, casting doubt on the effectiveness of the measures,” Hwang stated.
She in contrast the scenario with america, the place 74 of the 100 largest corporations by market worth have December fiscal year-ends, but their shareholder conferences are unfold all year long.
The report additionally highlighted that shareholders in Korea have one of many shortest durations amongst OECD nations to assessment proposals.
Notices will be despatched simply two weeks upfront, and key paperwork akin to enterprise and auditor reviews are solely disclosed one week earlier than the assembly, limiting shareholders’ potential to make knowledgeable choices.
“It might negatively have an effect on shareholders’ potential to rigorously contemplate proposals and the validity of their decision-making,” Hwang famous.
She advised setting dividend document dates after shareholder conferences and overhauling the approval course of for govt compensation. “These measures can empower shareholders to completely train their rights,” she stated.
Hwang emphasised that such reforms are very important to reinforce belief in company governance and assist eradicate the so-called “Korea low cost,” which refers back to the longstanding undervaluation of Korean shares regardless of a latest home bull market.
In the meantime, the Monetary Companies Fee, Monetary Supervisory Service and Korea Alternate stated they are going to contemplate the dispersion of shareholder conferences when evaluating disclosure practices and in addition when decreasing penalties for incomplete disclosures.
In addition they stated customary guidelines shall be revised so corporations can set a separate document date for voting rights, as an alternative of mechanically utilizing the fiscal year-end.
