Shareholder Activism in Korea - "Partial Success" says SquareWell

Shareholder activism is gradually gaining momentum in South Korea, as highlighted SquareWell’s latest insight paper. The report reveals a significant increase in activist investor initiatives targeting Korean firms, jumping from nine in 2020 to 71 in 2023. Although many campaigns have not secured a majority vote, Ali Saribas, a partner at SquareWell, considers these efforts “partially successful” due to the pressure they exert on companies. Saribas believes that merely having a proposal on a company’s agenda can be seen as a success, as it draws attention to necessary changes.

SquareWell’s report also casts doubt on the role of the National Pension Service (NPS) in the local capital market. The NPS, a major shareholder in many listed companies, has faced criticism for allegedly favoring chaebols, South Korea’s large family-owned business conglomerates. A recent activist campaign targeting Samsung C&T for better governance received only 23 percent shareholder support, with SquareWell claiming this could rise significantly without NPS and chaebol family votes.

The full article can be accessed here.