The Financial Supervisory Service said on the 14th it will review this year the overall status of proxy voting by asset managers and related disclosures. The move comes as a series of reforms to boost shareholder rights have been pursued, putting a spotlight on asset managers' fiduciary roles and responsibilities.
The review will cover roughly 500 public and private managers that disclosed their proxy voting records to the Korea Exchange (KRX) from April last year through the end of March this year. Officials plan to check whether they complied with requirements such as providing reasons for exercising or not exercising voting rights, disclosing internal guidelines, and following disclosure form standards.
This year, the agency will also add checks on whether public fund managers have established shareholder rights processes under the Asset Manager Proxy Voting Guidelines. As of the end of last month, this applies to 77 public fund managers.
Specifically, the review will look at whether shareholder rights processes, including proxy voting, are in place; whether organizations and staffing systems for fiduciary duty activities have been prepared; and whether conflicts of interest are being managed to secure the independence of proxy voting.
According to the Financial Supervisory Service's review to date of managers' proxy voting records, proxy voting disclosures are improving across categories. The rate of insincere proxy voting entries fell to 26.6% last year from 96.7% in 2024, while the rate of disclosing internal guidelines reflecting the proxy voting guidelines rose to 59.3% from 18.6% over the same period.
The Financial Supervisory Service plans to announce the review results in June and explain key points, including standout and underperforming managers. An official at the Financial Supervisory Service said, "We will work to establish sound proxy voting practices at asset managers by sharing best practices through a managers' meeting in July this year."