As the regular shareholders' meeting season commences in South Korea, this year serves as a test for the recent amendments to corporate law, with a particular focus on how these changes are reflected in corporate governance. Key amendments include the implementation of the '3% rule' limiting voting rights for major shareholders during the appointment of audit committee members, and the introduction of mandatory cumulative voting procedures starting in September. These changes are intended to shift company boards away from being mere instruments of controlling shareholders, promoting independence and accountability for the benefit of all shareholders.

In conjunction with the KOSPI reaching 6,000 points, many companies are actively pursuing improvements to governance structures and increasing engagement with their shareholders. With the government and ruling party emphasizing the need for advanced capital markets, companies recognize that a growing number of retail investors, who represent more than half of the economically active population, are sensitive to corporate actions. This shift in corporate attitudes is evident, as reported by an asset management company representative, who noted that about 60% of communicative companies are seriously considering shareholder proposals and are willing to adopt them without resorting to a vote.

However, not all companies are embracing these changes. Many are taking defensive measures, deploying a set of 'defense mechanisms' that include extending director terms, reducing the number of directors, and increasing the number of auditors. For example, Hanwha Group's listed affiliates have proposed extending director terms from two to three years, while some subsidiaries have significantly reduced their board sizes. Other companies, such as Ecopro, Krafton, and KakaoPay, are also setting new limits on the number of directors, further indicating a trend among certain corporations to fortify their management structures amid these regulatory adjustments.