South Korea makes cumulative voting compulsory for large listed companies
South Korea's National Assembly passed a second amendment to the Commercial Act on 25 August 2025. Listed companies with assets of KRW 2 trillion or more can no longer opt out of cumulative voting for director elections in their articles, and must elect at least two audit committee members separately from the rest of the board, up from one. The changes took effect on 10 September 2026.
The National Assembly passed the bill on 25 August 2025 by 180 votes with two abstentions, after an opposition filibuster. It follows the first amendment of 3 July 2025, which extended directors' duty of loyalty to shareholders, and adds the two measures left out of that bill. It was promulgated on 9 September 2025 and took effect a year later.
What changed
- Cumulative voting: listed companies with total assets of KRW 2 trillion or more can no longer exclude cumulative voting in their articles of incorporation (article 542-7). Each share carries as many votes as there are directors to elect, and a shareholder can give them all to one candidate, which helps minority shareholders win a board seat.
- Audit committee: the same companies must elect at least two audit committee members separately from other directors, instead of one, with the controlling shareholder's votes capped in that election.
- Start: the changes apply from 10 September 2026, to directors first elected after that date.
Who is affected
Large Korean listed companies, their controlling shareholders, boards and company secretaries planning director elections.
What to do
Check the articles of incorporation and plan the next director and audit committee elections on a cumulative-voting basis. Some companies have reduced board size or staggered terms in response.