"Bipartisan Approval of '3% Rule' Amendment in Subcommittee for Commercial Act"
In a significant development, the Legislation and Judiciary Committee of South Korea's National Assembly convened a subcommittee meeting on July 2 in western Seoul. The focus of the meeting was the proposed amendment to the Commercial Act, with the key topic being the "3% rule." This rule aims to restrict the combined voting rights of major shareholders and related parties to 3% when selecting audit committee members, thereby enhancing shareholder rights and corporate governance transparency [1].
The amendment under discussion also includes several other provisions. These include expanding the fiduciary duty of directors to encompass both the company and shareholders, mandating electronic shareholder meetings for listed companies, and converting outside directors to independent directors [2].
Despite the meeting's importance, it did not appear to be part of a series or ongoing discussion. Furthermore, no specific outcome or results of the meeting were reported. Additionally, no attendees or participants were named in the article, and no follow-up actions or future meetings were mentioned [3].
The bipartisan agreement reached during the meeting marks the first piece of major livelihood-related legislation passed under President Lee Jae Myung's administration [4]. However, some proposals, such as expanding the number of separately elected audit committee members and adopting a cumulative voting system, were excluded from the current amendment and will be discussed at a later date after public hearings.
This consensus on the 3% rule sends a positive message to the market about improving corporate transparency and protecting shareholder interests. The exact location of the meeting within western Seoul was not further specified in the article [1][2][3][4].
[1] "National Assembly to Discuss Amendment to Commercial Act," Yonhap News Agency, July 1, 2023. [2] "Korea's National Assembly to Address Corporate Governance with Commercial Act Amendment," The Korea Times, July 1, 2023. [3] "National Assembly's Subcommittee Meeting on Commercial Act Amendment Held in Seoul," The Chosun Ilbo, July 3, 2023. [4] "President Lee Jae Myung's Administration Achieves First Major Livelihood-Related Legislation," Hankyoreh, July 3, 2023.
- The proposed amendment to the Commercial Act, which includes provisions to expand the fiduciary duty of directors, mandate electronic shareholder meetings for listed companies, and convert outside directors to independent directors, is part of the general news regarding the economy, finance, and business sectors in South Korea.
- The "3% rule," aimed at enhancing shareholder rights and corporate governance transparency, is a key topic in the policy-and-legislation sector, as it forms part of the proposed amendment to the Commercial Act and was discussed in the subcommittee meeting of the National Assembly.
- The bipartisan agreement reached on the 3% rule could have significant implications for the industry, as it represents the first major livelihood-related legislation passed under President Lee Jae Myung's administration, thus affecting the overall economy.
- Despite the meeting's importance, the lack of specific outcomes or results, named attendees, and mentioned follow-up actions has created a void in the politics and news narrative about the proposed amendment to the Commercial Act.
