The Financial Services Commission and the Justice Ministry on Wednesday announced a series of policies aimed at improving local firms’ annual general meeting of shareholders, which have become more of a formality than a platform for shareholders to exercise their rights.
To encourage shareholder participation, the FSC will amend the Capital Markets Act so that a listed company can obtain the email addresses of its shareholders from securities brokerage firms.
The regulator will also amend the Commercial Act to enable people to authenticate their identity for electronic voting systems using more diverse authentication methods other than the use of an electronic certificate, such as ID-password combinations or mobile devices.
|Asiana Airlines' annual shareholder meeting (Yonhap)|
To allow shareholders to be better informed before voting, the FSC will mandate companies to attach their earnings and audit reports when sending out notices of shareholder meetings.
In addition, companies will have to provide comprehensive information on new board directors being put to a vote, as well as disclose the salaries of board directors in the past year, to ensure transparency.
Moreover, the FSC will require firms to give out notices of shareholder meetings four weeks prior to the meeting date, extending the term from the current two-week period.
It will also cap the number of companies that can hold shareholder meetings on a specific day, to ensure that meetings are appropriately dispersed, rather than concentrated on certain days.
The FSC will hold a meeting to collect opinions on the projected changes by next month. It will immediately take action on items that do not require legal changes, and ensure that due amendments to the Capital Markets Act are completed by the year’s end, it said.
By Sohn Ji-young (firstname.lastname@example.org)