On the 25th, a bill to amend commercial law, which includes the mandatory adoption of a concentrated voting system, was passed under the leadership of the Democratic Party of Korea in the National Assembly's plenary session.
On this day, the National Assembly voted on the commercial law amendment bill, which passed with 180 votes in favor and 2 abstentions out of 182 present. Lee Jun-seok, the leader of the Reform Party, and Representative Cheon Ha-ram abstained from voting.
Earlier, the People Power Party opposed the bill's processing and initiated a filibuster, but the Democratic Party concluded it forcibly alongside the ruling party. According to the National Assembly Act, a filibuster can be ended with a vote of more than two-thirds (more than 180 members) after 24 hours have passed since its start. All members of the People Power Party were absent from the plenary vote that day.
The amendment mandates the introduction of a concentrated voting system for listed companies with assets of more than 2 trillion won, and it also increases the number of separately elected audit committee members from at least 1 to 2 or more.
This is also a follow-up bill to the first commercial law amendment, which passed the National Assembly's plenary session through agreement between the ruling and opposition parties on July 3rd. The first commercial law amendment expanded the duty of fidelity of directors from the company to shareholders, mandated the introduction of an electronic general shareholders' meeting for listed companies, and specified the change of the title of outside directors to 'independent directors,' stating the introduction of 'independent directors.'
The Democratic Party of Korea emphasizes that if the second commercial law amendment is implemented, the supervisory function of the board of directors will be strengthened, and the rights of minority shareholders will be effectively protected.
In contrast, the People Power Party criticized it, stating, "It could seriously infringe upon the autonomy and stability of corporate management." Chief spokesperson Park Seong-hoon noted in a commentary that while it ostensibly promotes minority shareholder protection, it actually undermines corporate management rights and is a clear act of self-harm legislation that hands over corporations to foreign speculative capital, pointing out that it is a blatant contradiction to demand large-scale investments from corporations for national tasks like tariff negotiations while pushing forward a bill that makes corporate management impossible.
Concerns from the business community are also significant. The business sector points out that the introduction of a concentrated voting system could lead to 'board capture' by activist funds or minority shareholder alliances. Additionally, they argue that expanding the number of separately elected audit committee members to 2 could increase the influence of the audit committee within the board, making board operations, such as strategic investments, more rigid.
The People Power Party plans to review legal actions, including constitutional complaints regarding the second commercial law amendment and amendments to Article 2 and Article 3 of the Trade Union Act (Labor Union and Labor Relations Adjustment Act), and the three broadcasting laws.
The Democratic Party of Korea plans to focus discussions on follow-up measures aimed at providing safeguards requested by corporations, such as codifying the principle of 'business judgment' that limits the scope of application of criminal negligence.