E-voting is catching on fast in Korea as more listed companies invite shareholders to take part in voting rights electronically.

According to the Korea Securities Depository (KSD) on Thursday, 1,217 listed firms – 367 on the main Kospi market and 850 on the secondary Kosdaq – are adopting K-eVote system – electronic voting system developed by the state authority - at their regular shareholders meetings in March.

The figure represents for 58 percent of 2,108 publicly trading companies. When including the members to the third-tier Konex (Korea New Exchange) and non-listed ones, the number increased to 13,331.

The number of companies opting for the electronic voting system has been on the steady increase from 417 in 2015, 732 in 2016, 1,103 in 2017 and 1,204 in 2018. Among them, just 29 percent or 758 firms actually employed the system last year.

E-voting works well for the companies to meet quorum for resolutions after the scrapping of the shadow voting policy in late 2017. The shadow voting was introduced in 1991 to help companies make quorums by allowing the KSD to vote on behalf of minor shareholders who handed over their voting rights to the organization. But the policy was often abused by majority shareholders or management to diminish rights of minority shareholders.

As the abolishment of the shadow voting system has made it difficult for firms to reach a quorum, the government decided to exempt companies who fail to appoint outside directors or auditors due to lack of a quorum from being named an administrative issue.

By Chung Seung-hwan and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]