If you followed Korea’s 2026 annual general meeting season from abroad, one shift should have caught your attention: shareholders and proxy advisors have largely stopped asking “who nominated this candidate” and started asking “is this person actually fit to serve.” For foreign investors and multinational companies with a stake in Korean listed companies, that shift changes how nominee vetting needs to happen — and when.
This is not a subtle change in tone. It reflects a structural change in how board nominee risk is assessed in Korea, with direct implications for any foreign company, fund, or institutional investor nominating a director, voting on someone else’s nominee, or sitting on a board where a contested election is likely.
A Shareholder-Proposed Nominee Actually Won
Earlier this year, a shareholder-proposed nominee at a listed Korean insurer — put forward by an activist fund rather than the company itself — won election as an independent director serving on the audit committee, after a genuinely contested vote. It was reportedly the first case of its kind in the industry. The nominee had no backing from the controlling shareholder group; what carried the vote was that the candidate’s independence and professional qualifications held up to scrutiny.
For investors used to markets where proxy contests over individual board seats are routine, this may not sound remarkable. In Korea, where controlling shareholders have historically been able to push slates through with limited resistance, it is a meaningful data point.
What Korean Proxy Advisors Are Actually Flagging
Domestic proxy advisory firms in Korea — which Korean institutional investors, including the National Pension Service, rely on alongside or in addition to ISS and Glass Lewis — continue to recommend “against” votes on roughly one in ten director and auditor election proposals each AGM season. The rate moves up or down year to year by firm, but the baseline has held steady.
The reasoning follows a consistent pattern: for inside directors and non-standing directors, opposition tends to center on prior conduct that damaged corporate value; for independent directors and audit committee members, it tends to center on independence — undisclosed relationships, related-party dealings, and conflicts of interest.
▪ Independence compromised by related-party or transactional ties
▪ Statutory disqualification under the Commercial Act or Capital Markets Act (administrative or criminal sanctions, restrictions on concurrent positions)
▪ A track record of destroying corporate value
▪ An unrealistic number of concurrent board seats
▪ Thin board attendance and a weak activity record
The Problem: None of This Shows Up in a Standard Bio
Here is what makes this genuinely difficult for boards and nomination committees to manage. Most of the disqualifying facts above are invisible in a standard candidate biography. A nominee’s board résumé will show titles and dates. It will not show that the nominee once served as a registered director of a foundation affiliated with the controlling shareholder group, or as an auditor of a school foundation that happens to be a related party of the company. It will not flag that a nominee has served on the same board for more than a decade — itself now treated as an independence concern in some cases — or that a nominee is currently serving a suspended criminal sentence for a legal violation. In at least one documented case, incumbent independent directors who had approved putting such a candidate forward were themselves targeted with opposition recommendations on their own re-election, for having approved the nomination.
| ⚠ The Standard Bio Isn’t Enough None of this surfaces through a conventional paper review of a candidate’s résumé. It tends to surface only after a proxy advisor publishes an opposition report — by which point the company is already exposed to vote uncertainty and reputational risk. The candidate, meanwhile, is exposed to having the nomination collapse or face public questions about fitness to serve. |
The Legal and Regulatory Direction of Travel
This is not just market practice hardening informally. A bill currently pending in Korea’s National Assembly would amend the Commercial Act to require listed companies to disclose, at the time a director or auditor candidate is put forward, the candidate’s relationship with the largest shareholder, the specific basis for any independence determination, and any concurrent positions at other companies. The intent is to move disclosure beyond name-and-résumé formalities and give shareholders the substantive information needed to evaluate independence themselves. If enacted, pre-nomination vetting would shift from a discretionary risk-management practice to a disclosure obligation.
International practice already points the same direction. ISS and Glass Lewis have long applied their own screening criteria around value-destructive track records and independence-compromising relationships when making voting recommendations, and Korean domestic proxy advisors have been refining their own guidelines with reference to these international standards. For any Korean listed company with meaningful foreign institutional ownership, pre-nomination vetting now needs to account for both domestic and international proxy advisor standards.
Korea Zinc: A New Benchmark for Nominee Vetting
The clearest illustration of where this is heading came out of the ongoing control contest at Korea Zinc. Ahead of putting forward its own nominee for a separately elected audit committee seat, the Young Poong / MBK Partners side ran an open recruitment process for independent director candidates, rather than simply naming a nominee. Governance-focused institutions, academics, and professional associations were involved from the candidate-sourcing stage, and candidates went through staged review against Commercial Act disqualification criteria and independence and conflict-of-interest screens.
The process surfaced more than ten candidates across corporate management, accounting and finance, legal and compliance, ESG, industrial and technical expertise, and risk management. The final nominee selected had spent nearly two decades leading Asia-Pacific responsible investment and corporate governance work at an overseas pension fund manager, with prior experience on the National Pension Service’s own ESG committee.
Whatever the outcome of the underlying control contest, the process itself sets a new reference point. In a contested board election — where the legitimacy of the board’s composition is itself the thing being fought over — a documented, objective vetting process behind a nominee is what makes the case persuasive to outside shareholders and proxy advisors.
What This Means in Practice
When I advise on a director or auditor nomination now, five items get checked before the candidate goes anywhere near a shareholder meeting agenda. Documenting this before the nomination is filed gives the nomination committee a defensible basis for its decision, and gives the company something concrete to show institutional investors and proxy advisors if the nomination is challenged.
| # | Pre-Nomination Vetting Checklist |
| 1 | Statutory disqualification under the Commercial Act, Capital Markets Act, and related regulations |
| 2 | Independence, assessed through a review of related-party and transactional relationships |
| 3 | Board activity history — attendance record and voting pattern on prior agenda items |
| 4 | Capacity to actually perform the role, given concurrent positions elsewhere |
| 5 | Any history of conduct that damaged corporate value |
Takeaway for Foreign Investors and Multinational Boards
Whether a director election succeeds is, in practice, decided before the nominee’s name ever reaches the shareholder meeting agenda. The standard shareholders and their advisors are applying has moved from “who backed this candidate” to “does this candidate hold up to scrutiny.” For foreign companies operating in Korea, funds nominating directors to Korean portfolio companies, or institutional investors voting on Korean board slates, that means pre-nomination legal vetting is no longer optional — it is a basic risk-management step for protecting both the integrity of the board and the position of the nominee.
If you are preparing a director or auditor nomination for a Korean company, or need a risk review ahead of an upcoming AGM or board matter, feel free to reach out.
About Kyusung Lee
| Education | B.A. Economics, Brown University · J.D., Yonsei University School of Law |
| Experience | International Contracts Counsel, Samsung C&T · Equity Research, BofA Merrill Lynch |
| Credentials | Member, Korean Bar Association · Certified Startup Law Specialist · CAMS Certified |
| Practice Areas | Corporate Governance · Shareholder Activism · International Contracts · Foreign Investment · Startup Law · Commercial Disputes |
| Kyusung Lee, Esq. | Korean Attorney TEL +82 2-6264-7604 | EMAIL kyusungii@gmail.com | WEB http://www.kyusunglee.com | BLOG blog.naver.com/hotchkiss777 |
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Kyusung Lee Attorney at Law 
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