Starting in 2026, all corporations listed on the KOSPI market will be required to submit corporate governance reports, with data showing that compliance rates for four out of ten listed companies have fallen below 50%. Compliance rates were low for shareholder rights-related items, including the cumulative voting system.
Leaders Index, a corporate analysis research institute, revealed on the 17th that it conducted a comprehensive survey of 501 non-financial listed companies that submitted corporate governance reports. The core indicators of the corporate governance report are composed of 15 detailed principles under three main categories: shareholders, board of directors, and audit bodies. The average compliance rate this year was 54.4%, indicating that companies adhered to 8.1 of the 15 core indicators.
By item, the four indicators related to audit bodies recorded a high compliance rate of 74.89% on average. In contrast, the five indicators related to shareholders had an average compliance rate of 55.7%, while the six indicators related to the board of directors had a relatively low compliance rate of 39.9%.
In particular, among the board of directors items, the cumulative voting system had a compliance rate of just 3%. The cumulative voting system grants voting rights equal to the number of shares when selecting two or more directors. This method allows for the concentration of voting rights on specific director candidates, making it advantageous for minority shareholders. The listed companies that adopted the cumulative voting system included SK Telecom, POSCO Holdings, and 15 others.
Over the past five years (2021-2025), POSCO Holdings had the highest average compliance rate for core governance indicators at 97.3%. POSCO Holdings achieved a 100% compliance rate by meeting all 15 indicators in three out of four years, excluding 2021 and 2023.
Next were ▲ KT&G 94.7% ▲ SK Telecom 92% ▲ LG Innotek 90.7% ▲ KT 89.3% ▲ Naver and Samsung C&T 88% ▲ Samsung Electronics 86.7% ▲ LG Chem, LG Electronics, and Samsung Electro-Mechanics 85.3%.
This year alone, there were six corporations that complied with all indicators, except for one. These included LG Innotek, LG HelloVision, Kakao, HD Hyundai Construction Equipment, HD Hyundai Heavy Industries, and HD Hyundai Marine Solution.
On the other hand, corporations with fewer than seven were 42% (210 companies). ISU Chemical had the lowest compliance rate at 20% (3 indicators). Samyang Holdings, HiteJinro Holdings, LS Networks, KISWIRE, SAJODAERIM, DY, iMarketKorea, and SOLUM also had compliance rates of just 26.7% (4 indicators).
Among the companies surveyed, Ildong Pharmaceutical showed the most significant improvement in compliance rate over the past year, rising from 13.3% (2 indicators) in 2024 to 73.3% (11 indicators) this year. In contrast, during the same period, Korea Steel, Kyungdong Invest, and KEC Holdings saw a significant decrease in compliance rate by 13.3 percentage points (2 indicators).