Analysis Report: Goldman Sachs' Review of Korean Shareholder Meetings and Investment Strategy

Market Summary and Analysis 

At the March annual general meetings, the first held since the Commercial Act was amended, activism spread, with shareholder proposals increasing, but few cases actually led to proposals being passed. 

 

Goldman Sachs assessed this as the reform entering the implementation stage and said visible results would appear going forward.

 

Key Issues at Shareholder Meetings and Structural Change 

The number of companies with shareholder proposals on the agenda rose to 56, but due to opposition from the National Pension Service and others, proposals actually passed at only 15 companies, meaning the intent of the Commercial Act amendment has not yet fully taken hold. 

 

However, shareholder activism, once led by foreign investors, is shifting to a domestic investor base, an important structural change that is increasing the persistence and effectiveness of shareholder pressure.

 

Implications for Investors 

Goldman Sachs diagnosed that the effects of corporate governance reform are not yet sufficiently reflected in share prices, with about 70% of companies listed on the Korean stock market trading below book value. 

 

This means the market still has strong appeal as an undervalued market, and with further Commercial Act amendments scheduled, such as mandatory cumulative voting this September, it can be used as an opportunity to invest preemptively in blue chips with high expectations of governance improvement.