FSS Announces Disclosure of Asset Management Firms That Exercised Voting Rights Unfaithfully at General Meetings

by Cha Minyoung

Published 14 Mar.2024 21:20(KST)

Executive Meeting of Asset Management Industry on the 14th

Financial Supervisory Service, Yeouido, Seoul. Photo by Younghan Heo younghan@

The Financial Supervisory Service (FSS) has announced that it will inspect the exercise of voting rights and disclosure practices in the asset management industry after the shareholder meeting season ends in March. It also stated its intention to disclose cases where voting rights were exercised insincerely or disclosures were inadequate based on the inspection results.

On the 15th, the FSS held a meeting with stewardship code officers from 10 major asset management companies and executives from the Korea Financial Investment Association to discuss key issues related to the exercise of voting rights in the asset management industry, the FSS announced on the 14th.

During the meeting, the FSS plans to urge asset management companies to thoroughly review the agenda items of each company's shareholder meetings and exercise their voting rights accordingly. It will also request that the Korea Exchange provide detailed and sufficient disclosures so that stock market participants can refer to the content and rationale behind these voting decisions.

After the shareholder meetings conclude in March, the FSS will conduct a comprehensive inspection of asset management companies' voting rights exercise and disclosure practices, and will publicly disclose cases where voting rights were exercised insincerely or related disclosures were inadequate.

An FSS official explained, "In the past, asset managers often exercised voting rights or made disclosures in a formalistic manner. Since exercising voting rights is meant to protect investors' interests and enhance corporate value, we intend to send a message to fulfill that role faithfully."

Meanwhile, last year, the FSS and the Korea Financial Investment Association launched the 'Task Force for Revising the Asset Management Companies' Voting Rights Exercise Guidelines' together with the asset management industry and the Korea Capital Market Institute. They revised the voting rights exercise guidelines by establishing 'general principles' before specific instructions for each case and presenting best practice standards regarding policies on voting rights exercise and disclosure, decision-making systems, procedures, and internal controls.