A Study on Disclosure Status and Future Improvement Directions of Corporate Governance Reports of State-owned Companies Listed on Korea Exchange

[Purpose]This study analyzed compliance rates of corporate governance indicators in state-owned companies listed on the Korea Exchange under the “Comply or Explain, CoE” framework, comparing them to private companies to evaluate the governance reporting system’s efficacy. [Methodology]Compliance with 15 key corporate governance indicators for public enterprises listed on the Korea Exchange in 2021 and 2022 was examined, compared to private companies of similar asset size to identify issues and suggest improvements. [Findings]State-owned companies showed high compliance in board and audit committee areas but lower levels in shareholder domains. Private firms improved compliance yearly but had deficiencies in announcing four weeks before shareholder meetings and establishing independent internal audit departments. Cumulative voting and separating board chair and CEO positions also lacked compliance. [Implications]The study emphasized strengthening regulations to mitigate conflicts between hard and soft law, requiring systematic explanations for non-compliance. It proposed administrative and financial support to encourage voluntary participation aligning with soft law objectives. Additionally, it highlighted the need to establish governance considering various stakeholders, beyond the traditional shareholder-centric framework, aligning with the shift towards stakeholder capitalism.