SEOUL, March 21 (Korea Bizwire) — South Korea’s top financial regulator said Wednesday it will oblige big companies to make public their corporate governance structure in a bid to boost transparency for investors and shareholders.
Starting in 2019, companies listed on the country’s main bourse with total assets exceeding 2 trillion won (US$1.86 billion) must reveal their ownership structure, the Financial Services Commission (FSC) said.
As of the end of 2016, a total of 185 firms fell into this category, it added.
Under the plan, which will be gradually expanded, smaller Korea Composite Stock Price Index-listed firms will come under the same requirements starting in 2021, the FSC said. It added that further discussions will be held with related entities to decide when to take similar measures against firms on the secondary KOSDAQ market.
Currently, listed firms are advised to voluntarily make public their corporate governance structure. But a mere 9.3 percent of the KOSPI listed companies have taken such a step, with some even found to have provided limited or biased information.
“Bearing that in mind, we set up guidelines that include 10 key principles that companies should follow in drawing up their report, which specify rights of shareholders, roles of boards of directors and rules on outside directors, among others,” FSC official Son Young-chae said.
“Those who fail to make the notification or who issue false information will face disadvantages in running their business,” he added.