Legal Study on the Compulsory Enforcement of Cumulative Voting in Joint-stock Company (주식회사 집중투표제의 의무화에 관한 법적 과제)

Shin,Jong-Seok (신종석)

Legal Study on the Compulsory Enforcement of Cumulative Voting in Joint-stock Company

Legal Theory & Practice Review
Abbr : LTPR
2019, 7(1), pp.317-344
Publisher : The Korea Society for Legal Theory and Practice Inc.
Research Area : Social Science > Law

Shin,Jong-Seok ¹

¹배화여자대학교

Candidate

ABSTRACT

The Korean government made partial amendment to the Commercial Code in 1998 in order to enhance the transparency and rationality of corporate governance. Among the amendments, Cumulative Voting was introduced selectively. Cumulative Voting is a type of voting system that helps strengthen the ability of minority shareholders to elect some of the directors. It allows an individual shareholder to be able to apply all of their votes toward one candidate. It is very efficient to secure the transparency of governance by providing the board members representing minority shareholders' interest with the more opportunities to participate in the board. Because of it when the issue of "Economic Democracy" rose up, its mandatory adaptation had been discussed. However, it has faced with the sharp opposition from the corporate owners by the reason it would damage the management of corporate by interfering in the decision of making or revealing trade secrets. The supporters in compulsory enforcement of cumulative voting stress transparency of corporate governance and improvement of the board's function. The opponents in compulsory enforcement of cumulative voting claim that the board members representing minority shareholders' interest stress the interests of a particular group in addition to external leakage of corporate information and the infringement of managerial rights. This Article tries to review the discussion on the selective enforcement of Mandatory cumulative voting system of the incorporated companies and to review the legal study by studying the legislation cases in other countries.

KEYWORDS

Cumulative Voting, Compulsory Enforcement of Cumulative Voting, Economic Democracy, Transparency of Management, Corporate Governance.

Citation status

* References for papers published after 2023 are currently being built.

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