The Financial Supervisory Service inspected whether asset managers properly exercised shareholders' voting rights and was found that 42% of those reviewed repeatedly wrote similar reasons for more than half of the agenda items at shareholders' meetings. The Financial Supervisory Service ordered asset managers to strengthen their fiduciary responsibility.
The Financial Supervisory Service on the 25th held the "2026 asset manager voting and disclosure briefing" at its Yeouido office in Seoul for about 300 staff in charge of proxy voting and disclosure at asset managers, and released these inspection results.
The Financial Supervisory Service this year reviewed 285 asset managers for their proxy voting and disclosure practices. As a result, 50 managers did not exercise votes en bloc on certain proposals, while 86 approved proposals en bloc. Eighty-seven managers did not specify proposal titles, 68 did not state proposal types, and 134 did not disclose their relationship with the Daesang corporation.
In particular, 121 companies, or 42.4% of all those reviewed, repeatedly used phrases such as "minimal impact on the shareholders' meeting" and "no infringement of shareholder rights" for more than half of the agenda items. They recorded identical or similar reasons for exercising voting rights across items even when the content and types of proposals differed.
The rate of repeatedly recording the same reasons for exercising voting rights on different items in content and type was 31.1% for small and mid-sized managers, nearly three times higher than large managers (11.6%).
By contrast, the more robust an internal control system a manager had, the more faithfully it carried out voting, disclosure, and active shareholder engagement. Among 67 public offering asset managers, the number with a dedicated proxy voting unit increased from 13 last year to 18 this year. Those that set up a fiduciary responsibility decision-making body rose from 36 to 40, and those that reflected related work in employee key performance indicators (KPI) expanded from 12 to 20.
Seo Jae-wan, an assistant governor at the Financial Supervisory Service, said, "Fulfilling fiduciary responsibility, including exercising voting rights, is the most basic duty of a trustee entrusted with managing others' property," adding, "Given that market trust in managers' shareholder activities remains low, items being improved through inspections should be embedded in on-site management culture."
The briefing also featured industry best practices. KB Asset Management presented a case of using generative artificial intelligence (AI) for verifying and analyzing proxy voting records. In particular, it shared experiences of improving efficiency by using AI in reviewing outside director appointment proposals and plans to expand its application.
Truston Asset Management introduced step-by-step shareholder engagement cases and internal policies, from selecting target corporations for shareholder activities to monitoring, private dialogues, sending shareholder letters, exercising voting rights, active responses, and post-performance analysis.
The Financial Supervisory Service plans to continue inspecting the state of asset managers' proxy voting and disclosures and to disclose best and insufficient practices to induce improvements in managers' practices for exercising shareholder rights.