SOUTH KOREA Law and Practice Contributed by: Bo Hee Park, Minhyun Cho, Ian Kim and Jun Hee Kwon, Jipyong LLC
Cumulative voting Cumulative voting has been introduced as a system to prevent major shareholders from monopolising the board of directors. Cumulative voting can be imple - mented unless it is excluded by the AOI. Following the 2025 amendment to the KCC, listed companies with total assets of KRW2 trillion or more are prohibited from excluding cumulative voting in their AOI. Even in companies that have not excluded cumulative voting, it is not automatically implemented; it is conducted when a shareholder holding 3% or more of the total issued and outstanding shares (excluding non-voting shares) requests cumulative voting. For listed com - panies with total assets of KRW2 trillion or more, this threshold is lowered to 1%. Removal of Directors Removing body and resolution requirements The general meeting of shareholders may remove a director at any time. The removal of a director requires a special resolution (weighted resolution requirement: two-thirds of the voting rights present and one-third of the total issued and outstanding shares). While shareholders may propose the removal of a direc - tor by exercising their shareholder proposal rights, in the case of listed companies, directors may refuse a shareholder proposal regarding the removal of an officer currently serving a term. Shareholders who have the right to request the convening of an extraor - dinary general meeting of shareholders may convene such for the removal of a director. Removal by the court If the removal of a director is rejected at a general meeting of shareholders, despite the director having engaged in inappropriate activities or any grave fact in violation of any statute or the AOI in relation to the per - formance of his/her duties, a shareholder who holds no less than 3% of the total number of issued and outstanding shares (or a shareholder who has held 0.5% of the total issued and outstanding shares of a listed company for at least six months; 0.25% for listed companies with total assets of KRW2 trillion or more) may request the court to remove the director. Disqualification of Directors The KCC specifies various disqualification criteria to ensure independence of outside directors/inde -
Composition Requirements Applicable to Listed Companies For listed companies, there are specific requirements regarding the number and proportion of independ - ent directors, the gender composition of the board of directors, the composition of the audit committee and the composition of the independent director nomina - tion committee. Please refer to 1.3 Companies With Publicly Traded Shares for more details. 3.4 Appointment and Removal of Directors/ Officers Appointment of Directors Appointing body and resolution requirements Directors are appointed at the general meeting of shareholders. The resolution requires a majority of the voting rights present and at least one-fourth of the total issued and outstanding shares. Recommendation of director candidates The KCC does not regulate the recommendation of director candidates for unlisted companies. In the case of listed companies, personal information of the candidates must be notified (or publicly disclosed) when convening a general meeting of shareholders for the appointment of directors, and directors must be appointed only from among those candidates. To recommend a person as a director candidate, share - holders may: • exercise their shareholder proposal rights; or • request the convening of an extraordinary general meeting of shareholders for the appointment of directors. Meanwhile, listed companies with total assets of KRW2 trillion or more are required to establish an independent director nomination committee within the board of directors. Independent directors must be appointed from among the candidates recommended by the nomination committee. However, if a share - holder who satisfies the requirements for exercising his/her shareholder proposal rights recommends a candidate for an independent director, the nomina - tion committee is obligated to include such person in the list of candidates.
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