South Korea to Fully Roll Out Electronic Shareholder Meetings Next Year

Introduction of the eVOP electronic voting platform

Easier voting for foreign shareholders

"The eVOP electronic voting platform is an innovative product that has delivered one of the smartest changes to our capital-market infrastructure in recent years."

Lee Yoon-soo, president of the Korea Securities Depository, made the remarks at a press briefing in Seoul on Nov. 4 on the introduction of electronic shareholder meetings and the launch of the platform.

He said eVOP will allow anyone with a laptop or smartphone to participate easily in shareholder meetings. From next year, he added, a new shareholder-meeting culture that overcomes time and location constraints will begin to take hold.

The platform was launched in line with the revised Commercial Act, which takes effect on Jan. 1. After an amendment to the enforcement decree of the Commercial Act aimed at introducing electronic shareholder meetings passed the Cabinet on July 14, listed companies with total assets of 2 trillion won ($1.45 billion) or more will be required to hold electronic shareholder meetings starting next year.

Electronic shareholder meetings allow shareholders to participate online and exercise voting rights without attending in person. eVOP, built by the Korea Securities Depository, is an integrated platform that supports the entire process, from electronic voting before the meeting to on-site and online voting on the day of the meeting.

Lee said the platform will guarantee shareholders an opportunity to participate in meetings without time or geographic constraints, while giving companies another channel to communicate with more shareholders. Broader participation could also significantly reduce companies' burden in securing a quorum.

The introduction of eVOP will also improve convenience for foreign shareholders exercising voting rights. Foreign investors have so far mainly voted through standing proxies. The process involved cumbersome procedures and restrictions, including a requirement to submit voting instructions nine to 10 days before a shareholder meeting.

To address that, the Justice Ministry established a new means of identity verification for foreign shareholders. The Korea Securities Depository also built a system linked to standing proxies to support identity checks for foreign investors. It has also created an IT environment that allows foreign shareholders to log in easily using a shareholder identification number and password. As a result, foreign shareholders will be able to attend meetings online on the day of the event and exercise voting rights in real time on the same basis as domestic shareholders.

The Korea Securities Depository said it also focused on security and system stability. It plans to respond to disruptions and cyber threats that could arise during electronic shareholder meetings with security controls and system resilience that meet the standards required of core financial-market infrastructure.

The Justice Ministry and the Korea Securities Depository plan to hold a pilot shareholder meeting using eVOP next month with the Korea Listed Companies Association. They also plan to offer a hands-on training program on the electronic shareholder meeting platform to support its stable adoption.

Jo Ara, Hankyung.com reporter rrang123@hankyung.com