Starting next year, Kospi-listed members with assets of 2 trillion won ($1.9 billion) or more must regularly disclose changes and developments in ownership and governance structure and meet so-called 10-point principles to strengthen shareholders’ rights and management transparency, the Financial Services Commission (FSC) said on Wednesday.

The financial authority will apply the mandatory disclosure policy to all Kospi-listed companies starting 2021 and later decide extension to Kosdaq-listed firms.

Subject to mandatory disclosures are statements on efforts to enhance shareholders’ rights such as shareholder-friendly dates on general meetings and introduction of online voting as well as status quo on shareholders and independent directors.

Failure to report or filing false disclosure would meet with strict penalties by the financial authority. The FSC plans to hold a briefing session on the measure in May, draw up guidelines by July and complete the revision of disclosure rules of the Korea Exchange by September.

Local companies have been advised to disclose their ownership and governance structure since March 2017, but investors still complain of lacking information on management decisions. Last year, just 70, or 9.3 percent of Kospi-listed firms disclosed information on their governance structure.

“Corporate governance disclosure is mandatory in major advanced countries such as the U.S., U.K. and Japan,” said an official from the FSC, adding that the measure would significantly enhance management transparency and corporate value in the long term.

By Kim Dong-eun and Choi Mira

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