Large listed companies can no longer exclude cumulative voting by their articles — effective 10 September 2026 | two audit committee members elected separately
From 10 September 2026, listed companies designated by Presidential Decree by reference to asset size cannot exclude cumulative voting in their articles of incorporation. Today the articles may exclude it, and in a company that has done so minority shareholders cannot use it even on request. The number of audit committee members elected separately from other directors rises from one to two, and it applies from the first director-election general meeting convened after the effective date.
Conditions used in the video
- Effective date
- 2026-09-10
- Promulgated
- 2025-09-09
- Basis
- Commercial Act Article 542-7(3) · Article 542-12(2)
- Who
- listed companies designated by Presidential Decree by reference to asset size
- Applies from
- the first director-election general meeting convened after the effective date
- Asset threshold
- Presidential Decree
Results
- Cumulative voting
- excludable by the articles → not excludable for covered companies
- Separately elected audit committee members
- 1 → 2
- By the articles
- the separately elected number may be raised to three or more
- Cumulative voting means
- concentrating votes on one candidate when several directors are elected
- First application
- the first director-election meeting convened after the effective date
Why it works this way
Cumulative voting gives each shareholder, at a meeting electing several directors, as many votes per share as there are seats, and lets them pile those votes on a single candidate. It is the device by which minority shareholders can seat one director. Today a company may exclude it in its articles, and where excluded it cannot be used even on request.
Commercial Act Article 542-7(3) (effective 2026-09-10).
- Nowthe articles may exclude cumulative voting
- Amendedlisted companies designated by decree cannot exclude it
- Effecton a minority request, directors are elected by cumulative voting
The asset threshold for covered companies is set by Presidential Decree.
The number of audit committee members elected separately from other directors rises from one to two, and the articles may set it at three or more. Because it applies from the first director-election meeting convened after the effective date, for many companies the spring 2027 annual meeting will be the first.
Commercial Act Article 542-12(2).
- Nowone elected separately
- Amendedtwo elected separately
- Articlesmay raise it to three or more
In a separate election, the largest shareholder's voting rights are capped at 3%.
This video and page describe a measure that has been promulgated but has not taken effect. Details may change through a decree or notice.
In short, from 10 September 2026 large listed companies cannot block cumulative voting through their articles and must elect two audit committee members separately, starting with the next director-election meeting.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
Commercial Act Article 542-7(3) (Special provisions on cumulative voting)
In force Effective 2026-09-10 (promulgated 2025-09-09; Addenda Article 1)
A listed company designated by Presidential Decree in consideration of asset size and other factors may not exclude cumulative voting by its articles of incorporation.
What this means
The one-line exclusion in the articles that blocked minority requests is closed off for large listed companies.
Commercial Act Article 542-12(2) (Special provisions on audit committee composition) · Addenda Article 2
In force Effective 2026-09-10
Two audit committee members (or more, if the articles so provide) are elected separately from other directors. Applies from the first director-election general meeting convened after the effective date.
What this means
Separately elected audit committee members double, and the new rules start with the next director-election meeting.
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Frequently asked
Which companies are covered?
Listed companies designated by Presidential Decree by reference to asset size. The threshold amount is set by the decree.
What is cumulative voting?
When several directors are elected, each shareholder receives as many votes per share as there are seats and may pile them on one candidate. It lets minority shareholders seat one director.
From which meeting does it apply?
From the first director-election general meeting convened after the effective date. For December year-end companies, the spring 2027 annual meeting is often the first.
What is separate election of audit committee members?
Directors who will serve on the audit committee are elected separately from other directors, with the largest shareholder's votes capped at 3%. The number rises from one to two.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.