In a recent announcement, the head of South Korea's financial regulatory body emphasized the importance of companies prioritizing shareholder feedback. This move is part of a broader effort by the government to enhance the domestic stock market's appeal through reforms aimed at increasing shareholder returns.
The Financial Supervisory Service's governor, Lee Bok-hyun, has urged corporations to engage more actively with their shareholders, addressing their legitimate concerns and working towards mutual benefits. This dialogue, according to Lee, should focus on enhancing shareholder value and establishing robust governance frameworks.
The initiative comes in the wake of efforts to eliminate the so-called Korea discount, a phenomenon where local firms are undervalued compared to their international counterparts due to low dividend yields and the influence of the opaque chaebol system.
As part of its strategy to rectify this, the South Korean government revealed a corporate reform agenda earlier in the year, aimed at raising the valuation of publicly traded companies. Detailed guidelines for this plan are expected to be released soon, signaling the government's commitment to refining the proposal with additional incentives, including tax benefits.
