SOUTH KOREA Law and Practice Contributed by: Ho Joon Moon, Tae Jung Kim, Do Kyeom Kim and Ji Geon Park, Lee & Ko
• approval of remuneration of directors and statutory auditors; and • declaration of dividends. For the following decisions that are reserved for the shareholders, the KCC requires a spe - cial resolution achieving more than two-thirds of the votes of shareholders present at the general meeting representing more than a third of the total outstanding shares of the company: • transfer of all or a material portion of the com - pany’s business; • removal of directors and statutory auditors; • amendments to the articles of incorporation of the company; • capital reduction; • mergers and spin-offs of the company; • dissolution or continuance of the company; and • granting of stock options. The Board of Directors The major decisions made by the board of direc - tors relate to, without limitation, the day-to-day operation of the company (to the extent not reserved for a general meeting of shareholders). According to the KCC, resolutions of the board of directors must be made by a majority vote of the attending directors, in the presence of the majority of directors. The main resolutions of the board of directors include: • the convening of the meeting of shareholders; • appointment of representative directors; • issuance of new shares; • disposal of significant assets; (On the other hand, the requirements for board resolutions may further be reinforced by laws or articles of incorporation. For example, the
approval of two-thirds of the directors is required for the following under the KCC, and compa - nies may have different (ie, higher, but in no case lower than stipulated under the applicable laws) resolution requirements in their articles of incor - poration.) • use of business opportunities of the company by directors; and • transactions between directors and the com - pany. The board of directors will have decision-mak - ing authority over the execution of business and other important matters as designated by the KCC, articles of incorporation, regulations of the board of directors and resolutions passed by the board of directors. However, the representative director will have decision-making authority over the details of business execution or routine busi - ness. 3.3 Decision-Making Processes The general meeting of the shareholders ( “Ordi- nary General Meeting of the Shareholders” ) must be held at least once every year and at any time that is necessary giving two weeks’ notice, although the notice period may be waived or shortened by the unanimous consent of the shareholders, in which case the meeting becomes the “Extraordinary General Meeting of the Shareholders” , according to the KCC. As specified above, pursuant to the KCC, vot - ing at the general meeting of the sharehold - ers generally requires majority approval (ie, a majority of votes from the shareholders present at the general meeting, representing more than a quarter of the total outstanding shares of the company), although certain matters (including amendment to the articles of incorporation or dissolution/liquidation) require special majority
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