Kyung-Hoon Chun, How to Increase Flexibility in Scheduling the Annual Shareholders' Meeting, Business Law Review, Vol. 34, No. 3 (2020), pp. 61-87.
<Abstract>
Various problems have been pointed out regarding the current practice of annual shareholders’ meeting in Korea. Examples of such problems are (i) concern for hasty audit (due to shortage of time between the end of the fiscal year and the submission of audit report), (ii) concern for insufficient information for shareholders (because the meeting notice is delivered prior to the public disclosure of the annual report), (iii) concern for empty voting (because the meeting is held almost three months after the record date for voting rights), and (iv) concern for ex-dividend trading (because the dividend is declared almost three months after the record date for dividend). This article argues that such problems are not conflicting, and the apparent conflicts stem from the convention that the last date of the fiscal year (December 31) is used as the record date for voting rights and the record date for dividends. By splitting the both record dates from the last date of the fiscal year, we can significantly increase flexibility in setting dates for the annual shareholders’ meeting and solve may problems listed above. Since the Article 350, Paragraph 3 of the Korean Commercial Code may bar such flexibility, this article also suggested amending the relevant provision.
<Keyword>
Annual Shareholders’ Meeting, Record Date for Voting Right, Record Date for Dividends, Empty Voting, Ex-dividend
Kyung-Hoon Chun, How to Increase Flexibility in Scheduling the Annual Shareholders' Meeting, Business Law Review, Vol. 34, No. 3 (2020), pp. 61-87.
<Abstract>
Various problems have been pointed out regarding the current practice of annual shareholders’ meeting in Korea. Examples of such problems are (i) concern for hasty audit (due to shortage of time between the end of the fiscal year and the submission of audit report), (ii) concern for insufficient information for shareholders (because the meeting notice is delivered prior to the public disclosure of the annual report), (iii) concern for empty voting (because the meeting is held almost three months after the record date for voting rights), and (iv) concern for ex-dividend trading (because the dividend is declared almost three months after the record date for dividend). This article argues that such problems are not conflicting, and the apparent conflicts stem from the convention that the last date of the fiscal year (December 31) is used as the record date for voting rights and the record date for dividends. By splitting the both record dates from the last date of the fiscal year, we can significantly increase flexibility in setting dates for the annual shareholders’ meeting and solve may problems listed above. Since the Article 350, Paragraph 3 of the Korean Commercial Code may bar such flexibility, this article also suggested amending the relevant provision.
<Keyword>
Annual Shareholders’ Meeting, Record Date for Voting Right, Record Date for Dividends, Empty Voting, Ex-dividend