Following the first joint seminar organized by the Financial Services Commission (the “FSC”), the Korea Exchange and other related institutions in February where the FSC set out major initiatives for the “Corporate Value-Up Program” to tackle the so-called Korea discount– the tendency for Korean listed companies to trade at lower valuations compared with their global peers – the proposed guidelines (the “Guidelines”) for the Corporate Value-Up Plan (as defined below) were unveiled during the second joint seminar held on May 2, 2024. The Corporate Value-Up Program bears three key pillars of (i) offering incentives such as tax benefits to listed companies to (ii) voluntarily prepare and communicate their corporate value enhancement plans (the “Corporate Value-Up Plan”) through disclosures and (iii) supporting investors in making informed investment decisions through a new corporate “value-up” index and establishing support systems such as a dedicated team at the Korea Exchange.

Focused on improving corporate governance and shareholder returns and enhancing self-regulatory requirements, the recent proposal of the Guidelines provides principles and examples of how listed companies can establish their own Corporate Value-Up Plan and ways to communicate with investors regarding the Corporate Value-Up Plan on voluntary and self-initiated basis.

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