FedChamber Holds Revised Commercial Act Briefing... "Prepare Ahead of March General Meeting"

[Asia Economy Reporter Hwang Yoon-joo] The Federation of Korean Industries (FKI) advised that companies need to prepare in advance for the amended Commercial Act ahead of their regular shareholders' meetings in March this year.

On the morning of the 28th, the FKI held a 'Corporate Briefing Session on Responding to the Amended Commercial Act' at the FKI Conference Center in Yeouido, Seoul, and made this announcement.

Kim Ji-pyeong, a lawyer at Kim & Chang Law Office who gave the keynote presentation, stated, "Among the amendments to the Commercial Act, the multiple derivative suits and separate election of audit committee members are expected to be particularly important," adding, "Since multiple derivative suits also apply to executives of unlisted subsidiaries, companies must prepare for civil and criminal liabilities related to breaches of duty by affiliate management."

He explained that regarding transactions between affiliates of listed companies, organizational changes such as mergers and splits, and changes in corporate governance, "It is necessary to establish risk prevention strategies in advance to avoid future issues with directors' liabilities and to also establish a compliance control system."

Lawyer Kim advised that since the separate election system for audit committee members is expected to encourage various minority shareholders, such as activist hedge funds and employee stock ownership associations, to actively exercise shareholder rights and submit shareholder proposals, companies should pay close attention to preventing potential post-dispute issues.

Meanwhile, at the briefing session, many companies expressed difficulties in preparing for the amended Commercial Act. In this regard, the FKI explained that according to last year's amendment to the Enforcement Decree of the Commercial Act, the entire business report must be disclosed one week before the shareholders' meeting.

Additionally, for the appointment of auditors and audit committee members, companies that have introduced electronic voting systems can abolish quorum requirements, so it was added that a board resolution on whether to adopt the electronic voting system should be made before the shareholders' meeting.

This content was produced with the assistance of AI translation services.