Impact of the Recent Amendments to the Korean Commercial Code on Corporate Governance
2025.08.06.
On July 22, 2025, the Korean government promulgated a partial amendment to the Korean Commercial Code (the “KCC”) following its passage at the National Assembly plenary session on July 3, 2025. This amendment package, long advocated by the Democratic Party and included among President Lee Jae-myung’s key campaign commitments, introduces a series of structural changes to Korean corporate governance.
For the first time, the amended KCC expands directors’ duty of loyalty, which has traditionally been owed to the company only, to shareholders. It also mandates (i) hybrid shareholders meeting that allow real-time electronic participation alongside in-person attendance for large listed companies, (ii) enhances board independence by redesignating “outside directors” as “independent directors,” and expands the scope of the Aggregate 3% Rule (as defined below) with respect to audit committee member elections.
Collectively, the reforms reflect a broader policy shift toward strengthening shareholder protections, particularly for minority and institutional investors. In parallel, they impose heightened governance expectations on Korean companies, requiring boards to evaluate potential shareholder conflicts more holistically and with greater procedural rigor. This update outlines the key statutory changes and highlights practical considerations for boards and management.
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