Leaders from key financial and academic institutions gathered at Korea University on February 26 for a seminar titled “The Era of Shareholder Activism: How Should Directors Respond?” The event addressed critical shifts in corporate governance, including massive stock buybacks, stewardship codes, and strategies for economic value creation.
Seminar Focus: Navigating Shareholder Pressures
Experts emphasized that Korean companies must prioritize “proper economic shareholder value” amid global trends. Jeong Seok-ho, chair of the Korea Public Procurement Association (KORPA), highlighted that global shareholder activism campaigns in 2025 marked a record high for the third consecutive year, reaching 297 major initiatives. He stressed the need to protect overall shareholder interests through business decisions, providing shareholders with precise economic value information.
Jeong noted that current single-shareholder dominance, often seen as “family-run businesses,” requires companies to strategically increase leverage. “Directors must actively pursue growth through higher debt utilization,” he stated.
Academic Insights on Long-Term Strategy
Korea University Business School Research Institute Executive Director and professor warned against dismissing economic value analysis as short-term focused. “This approach encourages sustainable long-term companies by challenging stagnant firms,” the professor explained. He pointed out that industries with extended business horizons, such as semiconductors and platforms, rarely face full takeovers globally.
The professor added that major global projects succeeding despite high leverage demonstrate how economic value shifts reduce operational risks through continuous performance improvements. “Economic value overall stems not from short-term source structure changes but from impacts across all intrinsic and relational assets,” he emphasized, urging stronger industrial competitiveness, especially in high-leverage production hubs.
Calls for Enhanced Governance and Fairness
Kim Byung-yeon, professor at Korea National University and chair of the Korea Corporate Governance Forum, linked record buybacks to strengthened economic fundamentals. “Concentrating on corporate governance amid activist pressures prevents economic instability,” he asserted, advocating for forward-looking assessments of original intent and internal capabilities.
Kim Joon-chul, from the Korea Shareholders Association, identified major trading and related-party shareholders as central to evolving environments. “Companies must prepare by aligning with activist demands, enhancing internal governance, and activating overall operations,” he recommended.
Legal and Market Perspectives
Law firm partner Han Tae-young advocated evaluating buyback trends under comprehensive shareholder proportionality, not specific major stakes. “Especially during direct listings, decisions should follow U.S.-style ‘entire fairness’ standards, considering special committees and external advice,” he said.
Kosdak Hyuphoe Research Group Chief Jin Sung-hoon observed that participating shareholders beyond controlling ones increasingly shape governance. “Kosdaq company leaders face risks from low stock prices and activist sales pressures; they require comprehensive strategies integrating governance changes,” Jin concluded.
Participants agreed that amid transformative buyback dynamics, firms should harness major shareholder influence, pursue intangible assets, and secure future growth through unlimited potential.
