Fast reading
- South Korean regulators have implemented meaningful measures to address the so-called ‘Korea discount’, which had led to local companies persistently trading at lower price-to-earnings multiples than their global peers. In particular, actions on fiduciary duty, treasury stock cancellation, director voting reform and enhanced ‘value up’ expectations for undervalued companies have helped lift standards. The Korea Corporate Governance Forum’s own long-standing push on shareholder rights has helped shape the debate.
- But reform on paper does not mean company management is suddenly “on side”. An ongoing structural issue in South Korea’s public markets remains concentrated family control. It continues to give directors both the ability and the incentive to act in ways that disadvantage minority shareholders. Even as rules tighten, many boards are still looking for ways to preserve control, limit accountability and resist changes that might force them to share more of the gains with outside investors.
- The new rules will matter only if they are robustly implemented and interpreted in ways that genuinely deter abuse – this is especially true of fiduciary duty reform. Future court decisions will help determine whether the law becomes a real safeguard for minority investors or a principle that boards can work around with plausible-sounding justifications. Further action is needed to ensure a proper mandatory offer rule, an end to compelled share swaps, and stronger disclosure requirements for holding companies.
Keynote address to the Korea Corporate Governance Forum in May 2026
For more information: Asia ex-Japan Equity
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