Kim & Chang, led by Managing Partner Kim Sang-gon, announced on September 21 that its corporate advisory group is activating a response system in preparation for the implementation of electronic shareholder meetings.
Starting next year, publicly traded companies with total assets exceeding 2 trillion won will be required to hold electronic shareholder meetings, leading to significant changes in the overall operation of shareholder meetings, including convening, agenda review, and voting.
Electronic shareholder meetings eliminate the constraints of physical attendance for shareholders and facilitate the exercise of voting rights. However, for listed companies, this requirement necessitates extensive legal and technical reviews, including the interpretation of provisions regarding the obligation to hold electronic meetings, details to be included in the notice of convening, authentication procedures for shareholders and their representatives, the scope of speaking rights for remote participants, and responses to network communication failures or system malfunctions.
The introduction of electronic procedures increases the risk of serious legal disputes, such as lawsuits for invalidation or cancellation of resolutions by shareholders, or requests for provisional injunctions, if there are deficiencies in internal regulations or prior notifications, or if issues arise during the convening process or on the day of the meeting. Consequently, listed companies need to establish a sophisticated and comprehensive pre-risk management system that is markedly different from previous practices.
The corporate advisory group has been proactively reviewing academic trends and key legislative examples related to electronic shareholder meetings since the early discussions on the revised commercial law, preparing a dedicated response system. This system leverages the expertise of the Corporate Law Research Center, which analyzes legal interpretations and policy guidelines, and the Management Dispute Center, which handles practical operations and litigation responses during actual shareholder meetings.
Co-directors Lee Se-jung and Jeong Da-joo, along with team leader Kim Yoo-seok, are researching potential issues that may arise during shareholder meetings, including voting rights assessments, procedural challenges, and scenarios for various dispute situations. Meanwhile, Corporate Law Research Center Director Kim Jong-wook and Deputy Director Kim Tae-jung are analyzing relevant laws such as the Commercial Act and the Capital Markets Act, as well as guidelines issued by the government and related agencies, to derive key issues and practical standards. The corporate advisory group plans to provide a comprehensive practical guide that companies can immediately apply in the field by combining the expertise of both organizations.
Managing Partner Moon Ho-jun stated, "With the introduction of electronic shareholder meetings, the legal integrity at every stage, from the notice of convening to voting rights assessments and vote counting, has become a key element in preventing disputes. We will provide an integrated solution that connects advisory services and litigation to ensure that companies can operate shareholder meetings smoothly and stably in the changed environment."
The corporate advisory group plans to continuously monitor the establishment of standard operating regulations and detailed guidelines by the government and related agencies to ensure that client companies can prepare for shareholder meetings systematically and thoroughly.
* This article has been translated by AI.
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