"60% of Listed Companies Comply with Corporate Governance Indicators"

Analysis of Governance Reports Disclosure for 345 Companies with Assets Over 1 Trillion Won on the Exchange
2 out of 5 Listed Companies Ignore Key Governance Indicators

[Asia Economy Reporter Hwang Yoon-joo] Among the five KOSPI-listed companies with assets exceeding 1 trillion won, two were found to be insufficient in enhancing governance transparency. They failed to adhere to basic principles such as announcing the general shareholders' meeting at least four weeks in advance, implementing cumulative voting systems, and notifying dividend policies.

On the 13th, the Korea Exchange announced that after a full analysis of corporate governance reports from 345 listed companies on the KOSPI market with total assets exceeding 1 trillion won, the compliance rate for 15 key indicators was 60.7%.

From this year, the mandatory submission of corporate governance reports expanded from companies with total assets over 2 trillion won to those with assets over 1 trillion won. Accordingly, the number of companies analyzed increased from 215 to 345.

The compliance rate of companies with assets over 2 trillion won, which were previously required to submit reports, improved from 63.5% last year to 66.7% this year. However, the compliance rate for newly targeted companies with assets over 1 trillion won was only 49.6%.

In particular, compliance rates for six key indicators fell below 60%. The lower-performing items compared to others included: ▲ announcing the general shareholders' meeting at least four weeks in advance (26.8%) ▲ notifying shareholders annually of dividend policies and implementation plans (46.5%) ▲ establishing CEO succession policies (34.5%) ▲ separating the roles of board chair and CEO (22.1%) ▲ adopting cumulative voting systems (3.7%) ▲ establishing independent internal audit organizations (support units) (52.2%).

The average timing for announcing the general shareholders' meeting among surveyed companies was 22 days before the meeting. This falls significantly short of the recommended four weeks and barely exceeds the legal obligation of two weeks under the Commercial Act.

Among companies that disclosed having dividend policies (46.5%), only 26.1% provided substantial information through specific indicators. The Korea Exchange analyzed that "regarding dividends, which are one of the major discount factors in our capital market, companies appear to be passive about transparent dividend practices."

The proportion of female directors on boards has increased annually, surpassing 50% for the first time this year, reaching 50.5%. The proportion of companies with audit committees composed entirely of outside directors was 76.3%, and the Korea Exchange pointed out that improvement is needed considering the global standard of 100%.

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