Korea Deloitte Group, Compliance Rate of Key Indicators of Corporate Governance of Listed Companies 54.6%

[Financial News] It was found that the compliance rate of key indicators of corporate governance of listed companies in Korea is improving. 
Korea Deloitte Group's Corporate Governance Development Center announced on the 14th in the 'Corporate Governance Data Trends' No. 5 that the average compliance rate of key corporate governance indicators was 54.6%, showing an improvement of 5.1%p compared to the previous year.
This indicator is the result of analyzing the compliance rate of 15 key indicators in the corporate governance reports submitted by 498 listed companies (non-financial) with assets of more than 500 billion KRW based on the 2024 fiscal year. 
In particular, the compliance rate of key corporate governance indicators for companies with assets between 500 billion KRW and 1 trillion KRW, which are in their second year of mandatory disclosure, recorded 44.7%, an increase of 9.1%p compared to the previous year, showing a clear improvement.
By key indicators, 'Providing predictability related to cash dividends (42.2%)' and 'Notice of convocation four weeks before the general meeting of shareholders (38.6%)' showed a significant improvement trend, rising by 25.4%p and 9.7%p compared to the previous year, respectively. On the other hand, 'Adoption of cumulative voting system' (3.2%) and 'Whether the chairman is an outside director' (13.5%) still recorded insufficient compliance rates, indicating the need for more sincere compliance with key indicators.
Han-Seok Kim, head of the Corporate Governance Development Center of Korea Deloitte Group, said, “The rise in average compliance rates shows that companies' governance response capabilities are improving,” and added, “In particular, there is an improving trend in newly designated key indicators such as 'Providing predictability related to cash dividends' and 'The board of directors is not homogeneous,' which are in their second year, showing that the application of the revised third corporate governance report guidelines is gradually being established.” He added, “However, it seems necessary to review to ensure compliance with still insufficient items.”
According to the report, among the key indicators, △Adoption of cumulative voting system (3.2%) △Whether the chairman is an outside director (13.5%) △Establishment and operation of CEO succession policy (34.5%) and 7 other items showed an average compliance rate of less than 50%. In particular, the 'Adoption of cumulative voting system' item recorded the lowest compliance rate among key indicators, indicating that companies still show a passive attitude towards its adoption. On the other hand, △Securing accounting experts in the internal audit organization (88.2%) △Implementation of electronic voting (80.7%) △Establishment of internal control policy (76.7%) and 6 other items showed a compliance rate of over 60%, which is analyzed as the result of mandatory compliance required by law.
Meanwhile, this report also covers major regulatory trends in the first half of the year, such as 'Prospects for corporate governance reform of the new government.' The new government has declared the protection of shareholder rights and the enhancement of governance transparency as key tasks, announcing the restoration of trust in the capital market and the establishment of a fair market order as election pledges. In line with this policy direction, it suggests that companies need to prepare effective response strategies such as strengthening accounting transparency, expanding communication with shareholders, and internal control. The full text of 'Corporate Governance Data Trends' No. 5, card news, and video news can be found on the Korea Deloitte Group website.



khj91@fnnews.com Hyun-Jung Kim Reporter