주주총회 결의제도의 개정방향

Abstract

The relevant provisions on the shadow voting system on the Financial Investment Services and Capital Markets Act were repealed on May 28, 2013, and therefore the shadow voting is no longer in practice as from January 1, 2015. Shadow voting means the voting exercised by the depositary in proportion to the “pro and con ratio” realized at the shareholders' meeting at the request of the issuing company lest the shareholders' meeting should fail due to the insufficient number of shareholders present at the meeting. As a matter of fact, most listed companies are concerned about the failure of the shareholders’ meeting because minority shareholders generally do not take much interest in the specific agendas put to votes in the meeting. They usually do not respond to the solicitation of proxy either. In the aftermath of the abolishment of the shadow voting, it may become much more difficult for the companies to reach any resolution in a shareholders’ meeting. As a possible solution, this writer suggests to introduce the dual class stock system, combined with mitigating the requirements of a valid resolution and abolishing the ‘3 percent rule’. 3 percent rule is an unique regulation in Korea that restricts voting rights of shareholders who holds more than 3 percent of the total issued and outstanding shares, and is applied when electing the auditors or the members of the committee of auditors in the board of directors. Article 409 of the Korean Commercial Code provides: Article 409 (Election)(1) Auditors shall be elected at a general shareholders’ meeting. (2) Any shareholder who holds more than 3/100 of the total issued and outstanding shares, exclusive of non-voting shares, may not exercise his/her vote in respect of such excess shares beyond the above limit, in the election of auditors under paragraph (1). Also, Article 542-12 (Constitution of Audit Committee, etc.) (2) and (3) provide as follows: (2) Listed companies under Article 542-11 (1) shall appoint members of the Audit Committee from among directors appointed by a general meeting of shareholders. (3) In cases where the total amount of voting stocks of listed companies held by the largest shareholder, his special persons concerned, and other persons determined by Presidential Decree exceeds 3/100 of the total number of issued stocks, excluding nonvoting stocks, such shareholder may not exercise voting rights on the stocks in excess when appointing or dismissing members of the Audit Committee who are neither auditors nor outside directors: Provided, That a lower ratio of holding shares may be determined in the articles of association. These provisions should be abolished - otherwise, the companies may not be able to elect their auditors in a suitable time once shadow voting is no longer possible.