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About Mandatory or Arbitrary Enforcement of Cumulative Voting System
Journal of Regulation Studies
2014,
23(1), pp.61-86
DOI : 10.22954/ksrs.2014.23.1.002
Publisher : 한국규제학회
Research Area : Public Administration
DOI : 10.22954/ksrs.2014.23.1.002
Publisher : 한국규제학회
Research Area : Public Administration
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This paper analyzes the critical review on acceptance of mandatory cumulative voting in Korea. Cumulative voting was introduced in the Commercial Code in 1998. At the time of the introduction of cumulative voting this topic was discussed among many scholars. Some scholars argued to accept cumulative voting mandatorily, and another scholar argued to accept it arbitrarily. After 15 years the mandatory enforcement of cumulative voting are discussed these days. But most of all, the introduction of cumulative voting is limited to 20 countries, including Korea, the United States, Japan, Russia, Taiwan and other countries. Russia, Mexico and Chile have adopted mandatory provisions only. We can not recognize as exemplary countries of cumulative voting system for Russia, Mexico and Chile. Some scholars argue, that cumulative voting will increase rights of minority shareholders at the general meeting of shareholders. However, it is not true because the majority of the minority shareholders are interested in profit on investment. Cumulative voting will degrade the effectiveness of the management seriously. Therefore, it is the best way that the management decides if a company accepts the cumulative voting or not. Considering the fact which happens in the companies, the opinion of commercial revision committee should be withdrawn.
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