The revised Commercial Act, which will take effect from September 10, 2026, is expected to bring significant changes to the governance structure of listed companies and the rights exercise of minority shareholders. In particular, the mandatory introduction of cumulative voting for large listed companies with total assets of over 2 trillion won and the expansion of the separate election of audit committee members are key points that those concerned about corporate governance disputes or shareholder rights must be familiar with.

[Complete Overview of the Revised Commercial Act] Strategies for Responding to the Mandatory Introduction of Cumulative Voting and Expansion of Separate Election of Audit Committee Members in 2026

[Table of Contents and Summary]

This post discusses the main changes of the revised Commercial Act scheduled to take effect on September 10, 2026. It analyzes the legal changes that expand the opportunities for minority shareholders to enter the board of directors, such as prohibition of exclusion from cumulative voting for listed companies with assets exceeding 2 trillion won and expansion of the number of separately elected audit committee members (from 1 to 2), and summarizes how this can be practically utilized as a strategic solution.

1. Implementation of the 2026 Revised Commercial Act: What Will Change?

2. A Powerful Weapon for Minority Shareholders: The Importance of Cumulative Voting

3. The Key to Governance Transparency: The System of Separate Election of Audit Committee Members

4. A Guide to Utilizing the Revised Commercial Act: Strategies for Cumulative Voting Requests and Responses

1. Implementation of the 2026 Revised Commercial Act: What Will Change?

From September 10, 2026, the provisions of the Commercial Act related to the governance structure of listed companies will be significantly strengthened. The key points are twofold.

• Prohibition of Exclusion from Cumulative Voting: Previously, even companies with total assets exceeding 2 trillion won could exclude cumulative voting through their articles of incorporation. However, under the revised Commercial Act, these large listed companies will no longer be able to exclude cumulative voting through their articles, ensuring that the opportunities for minority shareholders to elect directors are practically guaranteed.

• Expansion of Separate Election of Audit Committee Members: The number of directors elected separately as audit committee members from other directors will be expanded from 1 to 2. Since the major shareholders' voting rights are restricted to 3% when aggregated, the chances of minority shareholders’ voices being heard in the board have increased.

2. A Powerful Weapon for Minority Shareholders: The Importance of Cumulative Voting

Cumulative voting will completely change the voting process at the shareholders' meeting. Unlike the general voting method, the cumulative voting system grants 'as many voting rights as the number of directors to be elected per share'.

For instance, if three directors are to be elected at this shareholders' meeting, shareholders will have 3 votes per share. Minority shareholders can concentrate these votes on a specific candidate they prefer without spreading them out. Therefore, the more directors that need to be elected, the more favorable the structure becomes for candidates representing minority shareholders to enter the board.

3. The Key to Governance Transparency: The System of Separate Election of Audit Committee Members

Originally, the process of electing directors favored the large shareholders. This was because there were no restrictions on the voting rights of the major shareholder at the stage of electing directors before selecting audit committee members.

However, the use of the separate election system changes the situation. By electing the directors who will become audit committee members separately from other directors from the start, it is possible to limit the voting rights of the major shareholders to 3% at the director election stage. With this revision, the number can increase to 2, making it easier to elect independent directors to monitor governance transparency.

4. A Guide to Utilizing the Revised Commercial Act: Strategies for Cumulative Voting Requests and Responses

In order to make the most of the opportunities provided by the revised Commercial Act, thorough legal preparation is required as follows.

• Securing Shareholding Requirements: First, you must secure at least 1% of the shares of the respective listed company.

• Compliance with Written Request Timing: You must formally request to conduct cumulative voting in writing at least 6 weeks prior to the date of the shareholders' meeting.

• Strategic Cumulative Voting: If you develop a strategy to focus votes on the two candidates for audit committee members being separately elected, you can maximize the benefits of the revised Commercial Act and successfully elect a representative for minority shareholders in the board.

The restructuring of governance or the exercise of shareholder rights following the implementation of the revised Commercial Act requires complex legal procedures and strategic judgment. If you are concerned about appropriate response measures related to the mandatory introduction of cumulative voting and the expansion of separate election of audit committee members in 2026, please contact Cheongchul Law Firm, which has extensive experience in corporate legal affairs and governance strategy. We will provide you with the optimal legal solutions to protect your rights.