Financial Services Commission Chairman Choi Jong-ku
The South Korean financial authority plans to mandate companies trading on local stock exchanges to disclose their ownership and other governance structure to aid investors in making better decisions on accurate corporate information.
Currently, companies publicly trading in Korea are advised, but not forced to disclose their ownership structure.
“We plan to strengthen the disclosure requirement to allow investors more access to a company’s governance structure,” said Financial Services Commission chief Choi Jong-ku on Thursday while attending a seminar for foreign institutional players.
“We will also improve credibility on evaluations on individual corporate governance structure,” he said.
Korea Exchange from this year has introduced disclosure guideline on corporate ownership structure, but not many have been complying.
According to civic group Economic Reform Research Institute, just 4.4 percent of listed companies have disclosed information on their governance structure as of September 30, 2017.
To encourage more active participation by institutional shareholders, the FSC has been offering incentives to institutions practicing stewardship code - a set of guidelines for institutional investors to exercise their voting rights - by giving them preferential points when granting public assets and funds for management.
The National Pension Service, the country’s largest institutional investor, outsourced the work of designing its stewardship guideline, and once it makes it a practice, more domestic institutions are likely to follow suit, said Choi.
By Chung Seul-gi and Cho Jeehyun
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