Capital Group Unveils Korea-specific Voting Policy
Top shareholder in KB, Hana sets 30% dividend benchmark, stricter board standards 23 February 2026
SquareWell was quoted in The Korea Herald in an article by Im Eun-byel, titled “Capital Group unveils Korea-specific Voting Policy”.
The article reports that Capital Group has introduced a stand-alone voting policy for South Korea, marking the first time the US-based asset manager has adopted a country-specific stewardship framework for the Korean market. The policy complements its broader Asia-Pacific voting guidelines and reflects a more tailored approach to Korea’s corporate governance environment. According to the article, the new framework addresses characteristics specific to Korean listed companies, including concentrated ownership structures and the prevalence of family-controlled conglomerates.
One notable provision concerns board independence. Under the new Policy, Capital Group states that independent directors should not represent a major shareholder, defined as one holding more than 10 percent of issued shares or exercising de facto influence over key management decisions. SquareWell commented on this point in the article: “The explicit reference to de facto influence is not something we see in Capital Group’s policies in other markets and appears specifically tailored to the Korean ownership context.”
The article also highlights Capital Group’s introduction of a 30 percent dividend payout ratio benchmark for Korean companies. While dividend proposals will continue to be assessed on a case-by-case basis, the policy indicates that further scrutiny may be applied where payout ratios remain consistently below that level without sufficient justification.
In addition, the policy endorses cumulative voting and signals opposition to efforts that would restrict or weaken its application in board elections. According to the article, this represents a stronger position than that outlined in Capital Group’s global policy.
Capital Group holds significant stakes in major Korean financial institutions, including Hana Financial Group and KB Financial Group, underscoring the potential influence of its governance stance in the market.
The introduction of a Korea-specific voting policy suggests a formalization of Capital Group’s expectations on board independence, capital allocation and shareholder rights in a market shaped by concentrated ownership structures.
The full article can be accessed here.
