South Korea's Financial Supervisory Service reviewed voting rights exercise records from 285 public and private asset management companies covering 46,827 agendas disclosed from April last year to March this year, finding an exercise rate of 91.8% and an opposition rate of 8.2%. The improvement continues a trend from 2024's 79.6% exercise rate and 2025's 91.6% rate, while opposition rates rose from 5.2% to 6.8% to 8.2% over the same period. Despite progress, infrastructure gaps persist between large public fund managers and smaller firms in exercising shareholder rights, according to the FSS announcement on the 7th.
The exercise rate remains below the National Pension Service's 99.8% exercise rate and 23.1% opposition rate from last year. The gradual shift indicates asset management companies are moving away from passive approval-focused voting practices.
Opposition Votes Concentrated on Executive Compensation and Governance Changes
Opposition votes concentrated on three agenda categories: executive compensation with 1,600 cases, articles of incorporation changes with 1,200 cases, and director and auditor appointments and dismissals with 1,163 cases. Public fund managers specifically opposed articles of incorporation changes that contradicted revised Commercial Act principles, including deletion of three-year director term minimums and provisions reducing director liability.
Samsung, NH Amundi, VIP Asset Management Cited as Best Practices
The FSS separately examined shareholder rights exercise systems at 67 public fund managers, identifying Samsung Asset Management, NH Amundi Asset Management, and VIP Asset Management as best practice cases. Samsung Asset Management established a dedicated organization, strengthened decision-making bodies, and conducted on-site inspections of voting advisory firms. NH Amundi Asset Management operated a dual decision-making structure with separate voting rights exercise and fiduciary responsibility committees.
VIP Asset Management, despite being a smaller firm, maintained the highest ratio of dedicated staff relative to assets under management and actively conducted shareholder letters and management interviews. Mirae Asset, Kyobo AXA, Truston, and Shinhan Asset Management, identified as best practices in the previous year, maintained satisfactory standards.
Hanwha Investment and KB Asset Management, flagged as inadequate cases last year, substantially improved voting rights exercise disclosure quality in the current review.
Shinhan, Woori, Samsung Active Asset Management Flagged for Inadequate Disclosure
Shinhan Asset Management, Woori Asset Management, and Samsung Active Asset Management were identified as inadequate cases. Shinhan Asset Management used uniform descriptions such as "approved due to no disqualification reasons or special circumstances" for director appointment agendas and lacked a separate decision-making body and KPI system.
Woori Asset Management recorded a 73.4% duplicate description rate in voting exercise rationale—the highest among large public fund managers—and had no dedicated organization or detailed guideline disclosures. Samsung Active Asset Management showed a 77.3% duplicate description rate and no voting-related KPIs.
Shinhan Financial Group established a fiduciary responsibility committee chaired by an outside director following the review. Woori Financial Group began disclosing all internal voting rights exercise guidelines at the end of last month.
An FSS official stated that most inadequate cases occurred at small private fund managers, and the agency plans to strengthen guidance on voting rights exercise and disclosure for private fund managers.
FSS Plans CEO Meeting on the 13th to Address Industry Concerns
The FSS will hold an asset management company CEO meeting on the 13th to build consensus on identified issues with the industry.
FAQ
What was the voting rights exercise rate for South Korean asset management companies from April last year to March this year?
The Financial Supervisory Service reported that 285 public and private asset management companies achieved a 91.8% voting rights exercise rate and an 8.2% opposition rate across 46,827 disclosed agendas from April last year to March this year.
Which asset management companies did the FSS identify as best practices for shareholder rights exercise?
The FSS identified Samsung Asset Management, NH Amundi Asset Management, and VIP Asset Management as best practice cases based on their dedicated organizations, decision-making structures, and active engagement with portfolio companies through shareholder letters and management interviews.
