Same duty, different enforcement power
The principle that management is a trustee of shareholder capital is the same, but the chain of power that actually enforces that principle is different
United States
Executive performance compensation is directly linked to stock price and shareholder return indicators
Activist funds demand increased dividends while vying for board seats
Delaware courts actually hear and rule on lawsuits regarding breaches of fiduciary duty
Management that only retains earnings is exposed to the risk of a dismissal vote
South Korea
The family of the largest shareholder effectively determines the composition of the board
2016Introduction of Stewardship Code — recommendation for institutional investors to exercise voting rights
2020Introduction of separate election of audit committee members and a 3% limit on voting rights for the largest shareholder
Up to the 2024 Value-up Program, check-and-balance mechanisms are playing catch-up
Fiduciary duty: The legal obligation of management to operate the company's interests solely for the benefit of shareholders