Determinants of Shareholder Proposals in Korean Listed Companies

This study investigates the determinants of shareholder proposals in 238 Korean listed firms from 2018 to 2024. Using a logit regression model, the analysis categorizes proposals into three types: board and auditor appointments, shareholder returns, and amendments to the articles of association. The findings indicate that both ownership structure and the information environment significantly influence the likelihood of shareholder proposals. Firms with higher ownership by controlling or foreign shareholders tend to receive fewer proposals, implying that concentrated ownership discourages shareholder activism. In contrast, firms with lower information asymmetry, characterized by lower stock price volatility and longer history, are more likely to receive proposals, suggesting that accessible information facilitates shareholder engagement. Additionally, the determinants differ by proposal type. Governance-related proposals, such as board appointments and bylaw amendments, are primarily driven by ownership structure, regardless of firm performance. Meanwhile, shareholder return proposals are strongly and positively associated with profitability, indicating that shareholders are more likely to demand higher returns from financially successful firms. This study offers empirical insights into shareholder activism in Korea and underscores the differentiated nature of shareholder proposals and their implications for corporate governance.