FSC tries to make AGMs better

Annual general meetings (AGMs) are supposed to be the main chance for shareholders to make their voices heard to companies’ managements and boards of directors.

But in Korea, AGMs are mere corporate formalities. Debate is rare and the average running time is 30 minutes, according to the Korea Listed Companies Association.

The Financial Services Commission hopes to improve that situation and break the stranglehold of families controlling companies with a set of measures announced Thursday to boost shareholders’ involvement.

First, the FSC will allow listed companies to hold AGMs in April to dilute the current concentration in March.

The regulator will revoke one of the articles of incorporation that requires companies to hold the AGM three months from the date of account settlement. The change will come into effect in 2019, the regulator said.

The vast majority of Korean companies balance their books at the end of the calendar year.

Under the new measures, if a company selects a date for an AGM on which many other AGMs are being held, it will have to inform investors of the reason why it chose that date.

The vice chairman of the Financial Services Commission, Kim Yong-beom, noted on Wednesday that companies have little interest in making AGMs more lively.

“Shareholder meetings have become like a symbolic events because companies rarely care about them,” said Kim.

Another new idea is to promote an electronic voting system for shareholders who can’t make it to an AGM.

The Financial Services Commission will ask securities companies to tell their investor clients about the new voting systems.

One challenge in electronic voting is the need for a complex public authentication system for shareholders to be able to vote. The agency will consider making such a system available on mobile devices to help companies and investors.

The electronic voting system has been around for years, but companies have not been actively adopting it. Currently, 46 percent of Kospi-listed companies and 64 percent of Kosdaq companies use the electronic voting system. But the rate of voting on the system remains far lower, at 0.21 percent of all listed companies.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]