KOR

Research Staff

Research Staff

Hwang, Hyunyoung Research Fellow Capital Markets
Member of the Center, Financial Law Research Center
Research Field

Profile

TEL
82-2-3771-0899
E-mail
hyhwang@kcmi.re.kr
Education
Ph.D., Law, Hanyang University(2012)
M.A., Law, Hanyang University(2007)
B.A., Law, Hanyang University(2003)
Professional Experience
Research Fellow, Korea Capital Market Institute(2022.7. ~ )
Judicial Researcher, Supreme Court(2020. 7. ~ 2022. 7.)
Legislative Researcher, National Assembly Research Service(2014. 10. ~ 2020. 6.)
Researcher, Ministry of Justice(2012. 1. ~ 2014. 10.)

Publications

Opinion

Examining the Status and Challenges of Shareholder Rights Protection Through the Analysis of 2024 Shareholder Meetings / May. 14, 2024
Amid the growing interest of the government and capital market in enhancing corporate value and protecting shareholders, the 2024 regular shareholder meeting season has drawn to a close in Korea. Against this backdrop, this article analyzes disclosures related to shareholder meetings provided by 2,480 listed companies that convened regular shareholder meetings in February and March 2024. Through this analysis, it identifies challenges in protecting shareholders’ interests and puts forth future considerations.In terms of shareholder meeting dates, the analysis reveals that 97.2% of the listed companies hosting shareholder meetings between February and March 2024 convened them between March 20 and 29. Electronic voting serves as a beneficial system enabling shareholders to exercise their voting rights without the need to physically attend shareholder meetings. Of the companies analyzed, 586 KOSPI-listed companies (72.3%) and 931 KOSDAQ-listed companies (55.9%) implemented electronic voting systems. While it is not feasible to impose legal mandates on listed companies to space out meeting dates or adopt electronic voting, voluntary endeavors from these entities are crucial to safeguard shareholders’ interests. In this respect, ensuring shareholders’ voting rights through the dispersion of shareholder meetings and the adoption of electronic voting could be incorporated into corporate value enhancement guidelines or ESG evaluation criteria. An examination of disclosures concerning agenda items and audit reports indicates that approximately 80% of listed companies adhere to legal deadlines for such disclosures. In this respect, there is a need to consider amending legal provisions specifying disclosure deadlines for agenda items and audit reports, currently set at two weeks and one week, respectively, prior to the shareholder meeting date, thereby extending them to three weeks before the shareholder meeting. Additionally, it is essential to require companies to disclose dividend distribution information six weeks prior to the shareholder meeting, enabling shareholders to exercise their right to make a proposal. Following the conclusion of shareholder meetings, specific details regarding shareholder attendance rates and approval ratios for agenda items should be made public. This measure would increase shareholder participation in these meetings, providing an impetus for board directors to faithfully execute their duties in shareholders’ best interests.
Introducing the Electronic System for Tender Offers and Shareholder Meetings for Investor Rights Protection / Nov. 21, 2023
The number of retail investors has more than doubled to 14.41 million at the end of 2022 from 6.14 million in 2019. Considering the rapid growth of retail investors in the Korean stock market, policy support is essential to allow them to conveniently exercise their rights. To fulfill this policy goal, this article proposes the introduction of an electronic system for tender offers and shareholder meetings. A tender offer can be an opportunity for investors to sell their shares at a price higher than the market price. However, investors need to visit the main office or branch of the brokerage firm, which acts as a tender offer agent, during business hours to accept a tender offer. To resolve such inconveniences, it is necessary to establish an electronic system that enables investors to conveniently accept a tender offer. This is expected to be implemented without much difficulty as it only requires the establishment of the new system and changes in tender offer practices, rather than legal amendments. In this respect, the convening process, the exercise of voting rights and the meeting itself should be conducted electronically to allow shareholders to conveniently exercise their voting rights without attending the meeting in person. As for the convening process, it is recommended to use diverse platforms such as Kakao Talk or Naver electronic document service to obtain consent from shareholders and issue notifications. Concerning resolutions on key matters of the company, it is worth considering adopting mandatory electronic voting and treating electronic voting as a minority shareholder right. In addition, more options should be added to the current voting system to enable shareholders to express their diverse opinions, rather than voting only for approval, opposition and abstention. Finally, it should be noted that fully online shareholder meetings without a physical presence may have adverse consequences for shareholders’ participation and expression of their opinions. Accordingly, shareholder protection measures should be implemented, such as holding on-site meetings concurrently if a shareholder owning a certain percentage of shares opposes the online-only format.
Limitations of the Existing Appraisal Right and Improvements for Shareholder Protection / May. 16, 2023
An appraisal right is a right that a shareholder opposing a corporate merger or acquisition can invoke to require the company to purchase his or her shares, which serves as a critical tool to protect minority shareholders. However, the existing appraisal right hardly fulfills its own function as a safeguard for shareholders, which raises the need for improving how the appraisal right is exercised.It is noteworthy that 67% of the mergers of listed firms in Korea are small-scale and shareholders cannot exercise the appraisal right in small-scale mergers. To address this problem, the relevant law should be amended to require the acquiring company to disclose the target company’s shares that it acquired for one year before the merger resolution was passed, or to determine the eligibility for a small-scale merger based on the net asset value, as is the case with Japan. It is also necessary to grant the appraisal right to those who prove to have acquired shares prior to the disclosure of the board of directors’ resolution, regardless of the voting right, to guarantee shareholders’ appraisal right.Unlike foreign countries, Korea has adopted the legally prescribed calculation method for the merger value and the purchase price for exercising the appraisal right, which is considered problematic. In response to this issue, the Korean government is seeking a flexible approach to the calculation of the merger value. Likewise, the stock purchase price should be set as the same amount as the merger value flexibly calculated by the company, under the condition that the company bears the burden of proving the fairness of the calculation. In addition, it is reasonable to adopt the advance payment system for the stock purchase price to allow the company to pay in advance the amount that it estimates to be a fair price to shareholders.