President Lee Jae Myung presides over a Cabinet meeting at the presidential office in Seoul on July 15, 2025. (Image courtesy of Yonhap)
SEOUL, July 15 (Korea Bizwire) — The Cabinet on Tuesday approved amendments to the Commercial Act that expand the fiduciary duties of corporate board members to all shareholders, in a move that many analysts say will help improve standards on corporate governance.
The legislation is expected to lay the groundwork for strengthening the protection of minority shareholders, as President Lee Jae Myung has pledged to improve corporate governance as part of efforts to eliminate the so-called “Korea Discount,” which refers to undervalued local stocks.
Under the revised act, which took effect immediately, board members will be legally accountable not just to the company, but also to all shareholders.
Another key revision limits the voting rights of the largest shareholders and related parties to 3 percent when appointing or dismissing audit committee members. The code will go into effect one year after its promulgation.
It marks the first bill approved through a bipartisan agreement since Lee took office in early June. A previous version of the bill approved by parliament was vetoed in March by then acting President Han Duck-soo.
During the meeting, the Cabinet approved a separate bill that tightens martial law regulations, which took effect immediately.
The new law prohibits obstruction of lawmakers’ access to or participation in National Assembly sessions even if the president declares martial law. Violators will be subject to imprisonment for up to five years.
It also bars military personnel, police officers and others under the martial law commander’s authority from entering the National Assembly compound when martial law is in effect.
The amendment was introduced in the wake of former President Yoon Suk Yeol’s failed martial law bid on Dec. 3, when troops stormed the Assembly as lawmakers gathered to vote down the martial decree.
(Yonhap)
