Nearly one year ago to the week, amended Article 382-3 of the Korean Commercial Code (KCC) took effect, requiring directors to discharge their duties for the benefit of shareholders as well as the company, to protect the interests of shareholders as a whole, and to treat all shareholders equitably.  Alone among the 2025 corporate reforms, this amended Article 382-3 took effect immediately upon promulgation on July 22, 2025.  Every board resolution on a conflicted transaction—one in which the interests of the controlling shareholder and the minority diverge—passed since is measured against the new standard, and the 2026 general meeting season is the first conducted under it, with institutional investors already invoking the statute in their engagement with companies and proxy advisors tightening their voting guidelines in response.

The change matters most in a recurring type of Korean transaction: a deal that harms no one at the company level but disadvantages minority shareholders, such as an affiliate merger at an unfavorable exchange ratio.  Under prior law, directors owed fiduciary duties to the corporate entity alone, so a transaction that redistributed value among shareholders without depleting corporate assets sat largely beyond the reach of director liability.  That shield is gone.  This article leaves the policy debate over the “Korea discount”—the persistent tendency of Korean listed companies to trade below both their underlying asset values and their global peers—to others and addresses a practical question: what might a board do differently when approving a conflicted deal? Because the amended provision took effect only twelve months ago, there is as yet no court precedent or other authoritative guidance on how best to guard against the liabilities it creates.  What follows is therefore offered not as a prescription but as our perspective anchored in a single theme: disciplined, well-documented process has become the board’s most reliable protection.