What must KOSPI-listed companies disclose about board changes under the new governance rules?

Companies making changes such as shrinking their boards or altering directors’ terms must explain why they are doing so and whether the changes could affect shareholders’ ability to practice cumulative voting. The requirement is intended to address efforts to circumvent the revised Commercial Act.

What information must companies provide when planning a separate subsidiary listing or rights offering?

They must explain how they engaged with shareholders and provide key transaction details, including whether new shares will go to outside investors, the offering’s size and discount rate, and how the proceeds will be used. The disclosures address concerns that these transactions could dilute existing shareholders’ stakes.

How far in advance must companies disclose year-end dividend plans before annual general meetings?

Companies must disclose their year-end dividend plans and amounts at least six weeks before the annual general meeting, by the deadline for shareholders to submit proposals. Previously, firms typically announced meetings two weeks beforehand and published business reports a week before, leaving shareholders limited time to review dividend information.

Korea tightens corporate governance disclosure rules to strengthen shareholder protections

Listen

Summary

The Financial Services Commission and the Korea Exchange announced tougher corporate governance disclosure rules for all KOSPI-listed companies on Thursday. The guidelines require companies to explain board changes that could affect cumulative voting and to disclose shareholder engagement and transaction details for separate subsidiary listings and rights offerings. Companies must also disclose year-end dividend plans and amounts at least six weeks before their annual general meetings, giving shareholders more time to review them.

Key Facts

The reporting requirement was extended to all 826 KOSPI-listed companies this year.
Under the revised Commercial Act, listed companies with assets of at least 2 trillion won must incorporate cumulative voting, which lets shareholders pool votes behind a director candidate.
Transaction disclosures must state whether new shares will be sold to outside investors, the offering size and discount rate, and how proceeds will be used.
Companies must explain whether changes to board size or directors’ terms could affect shareholders’ ability to use cumulative voting.

By Park Han-sol

Published Nov 5, 2026 2:37 pm KST

Financial Services Commission offices inside Government Complex Seoul / Korea Times photo by Hong In-ki

All companies listed on the benchmark KOSPI will face tougher disclosure requirements on boardroom changes and major corporate transactions under new rules designed to give shareholders greater oversight of corporate governance, financial authorities said Thursday.

The changes, announced by the Financial Services Commission and the Korea Exchange, expand the information companies must provide in their annual corporate governance reports. The move comes after the reporting requirement was extended to all 826 KOSPI-listed companies this year.

One focus is on preventing companies from circumventing the revised Commercial Act that is designed to give minority shareholders a greater say in board appointments.

Under the law, listed companies with assets of at least 2 trillion won ($1.49 billion) must incorporate cumulative voting, which allows shareholders to pool their votes behind a particular director candidate, improving the chances of minority shareholders electing a representative to the board.

Some companies, however, have sought to avoid the rule by shrinking their boards or changing directors’ terms. Under the new guidelines, they will have to explain why they are making such changes and whether those moves could affect shareholders’ ability to practice cumulative voting.

Firms planning to list a subsidiary separately or raise capital through a rights offering will also have to spell out how they have engaged with shareholders, given concerns that such transactions could dilute existing shareholders’ stakes.

The disclosures must cover key details of the proposed transactions, including whether new shares will be sold to outside investors, the size and discount rate of an offering and how the proceeds will be used.

The revised guidelines also give shareholders more time to weigh in on dividend policies. Companies will have to disclose their year-end dividend plans and amounts at least six weeks before their annual general meeting — the deadline for shareholders to submit proposals.

Until now, firms typically announced annual meetings just two weeks beforehand and published their business reports a week before the meetings, leaving limited time for shareholders to review dividend information and exercise their rights.

Explore More