South Korea’s much-hyped plan to push companies to improve management and corporate governance disappointed investors with a lack of enforcement and concrete details.
Companies with management practices that prioritize shareholder returns will be given "bold incentives” and tax benefits under the the "Corporate Value-up Program,” the Financial Services Commission said in a statement Monday. The guidelines for the program will be finalized in June, the financial regulator said.
The nation will also introduce the "Korea Value-up Index” in the third quarter — similar to Japan’s JPX Prime 150 Index and composed of best-practicing companies — that will be used by pension funds and other institutional investors as a benchmark. New exchange-traded funds will be able to track the index, the FSC said.