The amendment to the Commercial Code, which contains the fiduciary duty of directors to shareholders and the "3% rule," passed the Legislation and Judiciary Committee on the 3rd. Since the amendment to the Commercial Code is a bill agreed upon by both the ruling and opposition parties, it is expected to pass in the plenary session held that afternoon.

Chairman Lee Chun-seok of the Legislation and Judiciary Committee hits the gavel while presenting the agenda at the full meeting of the Legislation and Judiciary Committee regarding the amendment to the Commercial Act held at the National Assembly in Yeouido, Seoul on the 3rd./Courtesy of News1

The Legislation and Judiciary Committee held a general meeting at the National Assembly that morning and approved the amendment to the Commercial Code, which had passed the bill review subcommittee the previous day.

The main points of the amendment to the Commercial Code are ▲ Expanding the fiduciary duty of directors to include "the company and shareholders" ▲ Limiting the combined voting rights of major shareholders and related parties to 3% when selecting an audit committee member ▲ Mandating electronic general meetings for listed companies ▲ Converting outside directors to independent directors.

The ruling and opposition parties debated issues related to the 3% rule and concentrated voting system until the previous day, reaching an agreement to process the 3% rule with some amendments. They decided to continue discussions on the introduction of the concentrated voting system and the separate election of the audit committee.

The amendment to the Commercial Code has been promoted since the time Lee Jae-myung was the representative of the Democratic Party. The amendment passed the National Assembly in March under the leadership of the Democratic Party but was discarded when then Acting President Han Duck-soo exercised the right to request reconsideration (veto).

The Democratic Party set a policy to handle the amendment to the Commercial Code in the June extraordinary National Assembly and pushed it strongly. The People Power Party argued for an amendment to the Capital Market Act instead of the amendment to the Commercial Code, but recently initiated negotiations with the ruling party, stating, "There are limits to protecting shareholder value with only the Capital Market Act" regarding the behavior of some corporations.

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