In a historic moment for South Korea’s financial markets, the KOSPI index has soared past the 6000 mark for the very first time, signaling a new era for investors and corporations alike. But while the headlines celebrate this unprecedented milestone, lawmakers and industry leaders are already looking ahead, focusing on a sweeping overhaul of corporate governance and shareholder rights that could reshape the nation’s capital landscape for years to come.
On February 25, 2026, members of the Democratic Party’s K Capital Market Special Committee—Kim Nam-geun, Min Byung-duk, and Lee Kang-il—took to the airwaves on the popular YouTube radio show ‘Kim Eo-jun’s Humility is Hard News Factory’ to explain the latest and perhaps most ambitious round of Commercial Act amendments. The core of this third amendment? A bold mandate that companies must cancel any treasury stock they acquire within a year, and eliminate all existing treasury shares within a year and a half of the law’s enactment.
"People have been thirsty for the advancement of our capital markets. When we modernized what had felt like a ‘broad-daylight robbery’ of a market, we achieved our goals much faster than anyone expected," said Min Byung-duk, reflecting on the rapid progress that has accompanied the KOSPI’s meteoric rise, according to Biz Chosun. Lee Kang-il, brimming with confidence, added, "The discount hasn’t been resolved yet. If we want to move toward a premium, there’s still plenty of room and it’s not too late. Even I put my last spare funds into ETFs."
Yet, for all the optimism, the focus is squarely on reform. The Democratic Party has been quick to spotlight the need for stronger minority shareholder rights, a theme echoed by all three committee members on the broadcast. Kim Nam-geun explained, "Minority shareholders can’t freely make proposals at general meetings. We need to ensure that major shareholders can’t abuse their power and that shareholder intentions are respected. If minority shareholders gather 10%, they should be able to submit proposals." Lee Kang-il chimed in, pointing out that, "The period for convening shareholder meetings is too short, and too many disclosures are made at once, giving almost no time to review the contents. We need to fix this so shareholders actually know what’s being voted on."
Shin Jang-sik, a lawmaker from the Innovation Party who joined the broadcast, put it bluntly: "We need to keep raising the rights of individual investors and level the playing field. The direction of the Commercial Act amendment is about how to strengthen the rights of minority shareholders." According to Biz Chosun, these efforts are not just theoretical—the third amendment to the Commercial Act was expected to pass the National Assembly plenary session on February 25, 2026, setting the stage for its transformative provisions to take effect.
But what does this mean in practice? The third amendment’s main feature is its strict timeline for treasury stock cancellation. Companies must now cancel any newly acquired treasury stock within one year. For shares already held, a grace period of one year and six months from the law’s enactment is granted. This move, supporters argue, will prevent companies from using treasury shares to manipulate governance or entrench management, a longstanding concern among investors.
The insurance sector, a pillar of Korea’s financial industry, is already bracing for impact. As reported by Seoul Finance, the amended Commercial Act—emphasizing directors’ duties to shareholders—will come into force on July 1, 2026. Insurance giants are preparing for a busy season of regular shareholder meetings starting mid-March, with Hanwha General Insurance kicking things off on March 18, followed by Samsung Life Insurance, Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, Tongyang Life Insurance, Mirae Asset Life Insurance, and Korean Reinsurance through the month.
This year’s meetings promise to be more than routine. The amended Commercial Act brings with it a host of changes: expanding directors’ fiduciary duties to shareholders, increasing the proportion of independent directors from one-fourth to one-third, and broadening the requirement for separately elected audit committee members from one to two. Notably, the so-called ‘3% rule’—limiting the voting rights of major shareholders and related parties to 3% when electing audit committee members—will apply from July 23, 2026. Companies with more than 100 billion KRW in assets must also have at least two separately elected audit committee members by September 10, 2026.
These changes are more than just technical tweaks. According to Seoul Finance, legal experts are urging companies to consider carefully when to incorporate these new rules into their articles of incorporation and when to elect new audit committee members. Timing is everything: if a company elects new audit committee members before July 23, the 3% rule doesn’t apply, potentially giving major shareholders more influence than if they wait until after the rule takes effect.
Insurance companies are already responding. Mirae Asset Life Insurance has included an agenda item for the cancellation of treasury stock, anticipating the capital reduction that will follow. Hyundai Marine & Fire Insurance has announced a phased shareholder return policy, including the cancellation of 12.3% of its previously acquired treasury shares. And across the sector, strengthening shareholder rights and board independence is a recurring theme in this year’s meeting agendas.
"We plan to reflect the provisions related to outside directors from the first and second Commercial Act amendments in our agenda," said one industry insider, as reported by Seoul Finance. "As for the third amendment, we’ll monitor developments and respond proactively to changes." The insurance industry’s attention to these reforms underscores their significance—not just for compliance, but for the broader evolution of corporate governance in Korea.
The government’s earlier amendments have already expanded directors’ fiduciary duties to shareholders, boosted the independence and oversight functions of boards, and introduced new checks on major shareholders’ power. For example, the requirement for at least two separately elected audit committee members and the 3% voting cap are designed to ensure that no single shareholder or group can dominate critical oversight positions. The removal of the cumulative voting exemption from company charters, effective September 10, 2026, will further bolster minority shareholder influence.
All these changes come against the backdrop of the KOSPI’s record-breaking performance. Yet, as lawmakers and industry leaders stress, the reforms are about more than just numbers on a screen. They represent a concerted effort to modernize Korea’s capital markets, protect individual investors, and foster a culture of transparency and accountability at the highest levels of corporate governance.
As the National Assembly moves forward with these amendments and companies gear up for a new era of shareholder engagement, the message from both policymakers and market participants is clear: the days of unchecked major shareholder dominance are numbered, and a more balanced, investor-friendly market is on the horizon.
For now, as the KOSPI basks in the glow of its historic achievement, the real work of reform is just beginning—promising a future where every shareholder, large or small, has a genuine voice in the companies they own.