SEOUL (Reuters) – South Korea’s financial watchdog chief said on Thursday companies should pay more attention to shareholder voices, as the government seeks to boost the domestic stock market by bringing in reforms to encourage higher shareholder returns.
“I ask that companies listen carefully to shareholder voices and actively communicate with shareholders on their reasonable demands,” said Lee Bok-hyun, governor of the Financial Supervisory Service.
“I ask companies to actively share with shareholders as they continue to make efforts to improve shareholder value and build a sound governance structure,” Lee said in a meeting with activist funds, representatives of listed companies and market experts.
The government has been trying to address what has been known as the Korea discount, which refers to a tendency for local companies to have lower valuations than global peers due to factors such as low dividend payouts, and the dominance of opaque conglomerates known as chaebols.
South Korea, which unveiled in February a corporate reform plan to boost the value of listed companies, is due to announce next month detailed guidelines of the programme.
The government is preparing to beef up the “Corporate Value-up Programme” with more measures, including tax incentives, after the initial proposal fell short of market expectations.
(Reporting by Jihoon Lee; Editing by Ed Davies)
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