Kosdaq firms struggle with rising workload amid shareholder reform push
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Complaints are mounting among investor relations officers at listed companies as workloads surge amid the government’s push to enhance corporate value and strengthen minority shareholder rights, industry officials said Tuesday.
They said compliance pressure has intensified due to a series of new requirements, including expanded English-language disclosure obligations, mandatory reporting of shareholder meeting voting outcomes and stricter executive compensation disclosure standards.
The government has been advancing sweeping reforms to the corporate disclosure framework as part of broader efforts to upgrade the local capital market and narrow the so-called Korea discount, which refers to the chronic undervaluation of Korean equities.
Financial regulators have gradually expanded mandatory English disclosures since January 2024. Earlier this year, the requirement was extended to all KOSPI-listed firms with assets exceeding 2 trillion won ($1.3 billion). Under the initiative, all companies listed on the benchmark market will be required to provide English-language disclosures starting in March next year.
Authorities are also considering adding large Kosdaq-listed firms with assets of 2 trillion won or more to the mandatory English disclosure scheme. “The details are still under review. Specific measures will be unveiled after further discussions," a Korea Exchange official said.
Additional disclosure requirements are also set to take effect next year. Companies will be required to publicly report voting results for each agenda item at shareholder meetings, including approval rates, while disclosure standards for executive compensation will be substantially strengthened.
The broader goal of these measures is to improve transparency for investors and reinforce the rights of minority shareholders. Wider English-language disclosures are also intended to enhance accessibility for overseas investors.
The problem, however, is that many companies lack the sufficient workforce and organizational capacity to handle the growing workload.
Smaller Kosdaq-listed firms, in particular, face greater difficulties because many cannot afford dedicated investor relations teams. In many cases, employees in human resources, general affairs or administrative support handle investor relations duties in addition to their existing responsibilities.
A key concern raised by smaller firms is the fast-changing shareholder base in the Kosdaq market. Because investors frequently rotate in and out, companies say the target audience for shareholder communication is constantly shifting.
Data from the Korea Exchange showed that the Kosdaq market recorded a stock turnover ratio of 439.68 percent by market capitalization last year, about four times higher than the KOSPI’s 117.03 percent. A higher turnover ratio indicates more frequent changes in investors.
“Shareholders in the Kosdaq market are replaced nearly once every two months, while demands for stronger shareholder engagement continue to rise. There remains a significant disconnect between regulatory expectations and market realities,” an official from the Kosdaq Listed Companies Association said.
Against this backdrop, the government is stepping up educational programs and support measures.
The Financial Supervisory Service (FSS) plans to hold on-site briefing sessions across six major cities to help investor relations personnel more easily access and better understand revisions to the Commercial Act.
This year’s program will begin in Gwangju and Daejeon next week, followed by sessions in Busan and Daegu during the third quarter and Seoul and Pangyo in the fourth quarter.
“The presentation materials will be uploaded to our website so that companies unable to attend can still use them in their disclosure operations,” an FSS official said. “We plan to continue reviewing areas where additional improvements may be needed.”
Regarding the expansion of mandatory English disclosures, the Korea Exchange official said the exchange is broadening its translation assistance programs.
“We will continue supporting listed firms by publishing and distributing an English disclosure terminology guide while also providing regular training sessions,” the official said.