The government approved a bill amending part of the Commercial Act during the State Council meeting on the 15th, which expands the scope of the 'duty of loyalty of directors' from existing corporations to include both companies and shareholders. It has been 12 days since it passed the National Assembly's plenary session on the 3rd following an agreement between the ruling and opposition parties. The amendment has been promoted by progressive groups including the Democratic Party since the 21st National Assembly under the premise of 'enhancing shareholder protection,' but it was discarded several times due to the exercise of the presidential veto by the previous government.
In addition to the 'duty of loyalty of shareholders', the amendment specifies that directors must protect shareholder interests when performing their duties and treat the interests of all shareholders equally. The '3% rule', which limits the voting rights of major shareholders and related parties to 3% of the total issued shares when appointing or dismissing audit committee members who are not outside directors, is also included.
Additionally, it mandates the holding of electronic shareholders' meetings for listed companies, converts outside directors to independent directors, and expands the mandatory appointment ratio for independent directors on boards from the existing more than one-fourth to more than one-third.
Among these, the provision expanding the duty of loyalty of directors will take effect immediately after the bill is promulgated. The regulation limiting the 3% rule will take effect one year after promulgation, and the requirement for mandatory electronic shareholders' meetings will take effect from January 1, 2027. Presidential Office Spokesperson Kang Yu-jeong explained that 'it takes about one year and six months to establish the electronic shareholders' meeting system, and shareholders' meetings are typically held in March.'
The amendment to the Commercial Act, which passed through the State Council meeting on that day, is the first bill agreed upon by both ruling and opposition parties during the Lee Jae-myung administration. It is also considered the second bill of the Lee Jae-myung administration following the 'three special investigation laws' (Kim Keon-hee, insurrection, and deceased marines).