On the 24th, at the National Assembly in Yeouido, Seoul, Chairman Park Beom-gye of the Legislative and Judiciary Committee’s Subcommittee 1 of the National Assembly hit the gavel during a meeting. The Legislative and Judiciary Committee of the National Assembly passed a revision to the Commercial Act, initiated by the opposition party, which expands the director’s duty of fidelity to include all shareholders.
The National Assembly’s Legislative and Judiciary Committee convened the Bill Review Subcommittee 1 on the 24th and passed this amendment to the Commercial Act. Despite opposition from lawmakers of the People Power Party, all five Democratic Party members among the eight members present voted in favor, allowing the amendment to pass the subcommittee.
This amendment, promoted as a party line by the Democratic Party, expands the responsibility of directors from being owed to the “company” to the “company and shareholders,” and mandates the introduction of electronic shareholder meetings for listed companies. However, provisions related to the expanded separate election of audit committee members and mandatory cumulative voting, pursued by the Democratic Party, will continue to be discussed in subsequent meetings.
After the bill passed, Park Beom-gye, chairman of Subcommittee 1 (Democratic Party), stated, “With the establishment of a basis for director fidelity duty in the Commercial Act, I believe regulations have been created today to better consider the interests of minority shareholders.”
Following the bill’s passage, People Power Party lawmakers protested, exiting the meeting room and holding a press conference. Yoo Sang-beom, the committee’s People Power Party secretary, criticized, “Isn’t this akin to burning down your house to catch a flea and will effectively dampen corporate management willingness?” He further commented, “Passing such legislation that can significantly constrain corporate activities and then claiming it aligns with centrist conservative views is preposterous.”
The Democratic Party plans to process the ‘Myung Tae-gyun Special Prosecution Act’ and the bills at the plenary session on the 27th, following the full Legislative and Judiciary Committee meeting.