"The System Is in Place, Now Execution Is Key: Experts Outline the Essentials for 'Korea Premium'"

Korea Premium Weeks
Stewardship Codes: Action Required from Each Stakeholder
"South Korea, Not Just Major AI Firms—Small and Mid-Cap Stocks Also Deserve Attention"

Global experts have stated that, for South Korea to move beyond the "Korea Discount" and toward a "Korea Premium," it is essential to underpin this transition with sustainable, long-term stewardship and corporate governance reform.

Conor Kehoe, Chair of the United Nations Principles for Responsible Investment (UN PRI) Board, said in a special keynote speech at "Korea Premium Weeks 2026," the largest domestic capital market investor relations (IR) event, held on September 29 at The Grand Lotte Seoul in Jung-gu, Seoul, "South Korea has shifted from the stage of diagnosing the Korea Discount to the stage of building a Korea Premium."

Stephen Dover, Chief Market Strategist of Franklin Templeton, is delivering a special lecture at the 'Korea Premium Weeks 2026,' the largest capital market investor relations (IR) event in South Korea, held on the 29th at The Grand Lotte Seoul in Jung-gu, Seoul. Photo by Seungwook Park

Kehoe continued, "South Korea has significantly strengthened the foundation for corporate value creation, and the next step will depend on how companies, investors, and asset owners utilize this progress. For companies, this means turning value-up commitments into operational and financial decisions. For asset managers, it means engaging and exercising voting rights in accordance with their own analysis. For asset owners, it means holding others accountable for stewardship codes."

He specifically cited the sustainability disclosure roadmap as an example. Kehoe stated, "The sustainability disclosure roadmap announced in July by the Financial Services Commission requires companies to include sustainability information in their statutory business reports alongside financial information. As more information is now required, institutional investors must be able to demonstrate how this information is used for investment decisions, engagement activities, and exercise of voting rights." He added, "This means integrating corporate strategy, financial information, and sustainability disclosures – for example, whether capital expenditures support strategies disclosed by the company, whether management incentives are aligned with standards, and whether spending is building future competitiveness."

On the same day, Stephen Dover, Chief Market Strategist at Franklin Templeton, also emphasized the need to improve access to small- and mid-cap stocks in his special keynote speech. He noted, "When I speak with foreign investors, I discuss transparency, liquidity, and improvements in corporate governance, but I believe that foreign investors in Korea expect something different. They are looking for improved access to growing small- and medium-sized enterprises in Korea, similar to what exists in the United States."

Dover remarked, "No country has achieved an economic miracle like South Korea," and added, "South Korea has gained a competitive edge compared to other nations as it transitions to a knowledge-based economy." He went on to advise, "In a situation where bond yields are rising and risk is concentrated in the US dollar, I recommend diversifying investments by targeting small- and mid-cap stocks in emerging markets such as South Korea. There are also many opportunities among unlisted companies operating in the private market, not just the public market."

A panel discussion is taking place on the 29th at The Grand Lotte Seoul in Jung-gu, Seoul, during Korea's largest capital market investor relations (IR) event, "Korea Premium Weeks 2026." Photo by Seungwook Park

As global investment banks and domestic and international capital market professionals participated, key challenges for the advancement of the Korean stock market were also discussed.

Kim Hakgyun, Head of the Research Center at Shinyoung Securities, asserted that it is necessary to strengthen voting rights through active exchange-traded funds (ETFs). He said, "It is not the case that capital market behavior changes simply because the law changes. The current difficulty regarding corporate governance is that institutions do not hold enough shares. As funds flow into passive ETF products, the influence of active funds that seriously exercise voting rights is weakened."

Kim Namjong, Head of Capital Market Research at Korea Institute of Finance, pointed out the need to expand the scope of corporate analysis and address analyst bias. He stated, "Last year, less than 40% of KOSDAQ-listed companies had corporate analysis reports issued. To revitalize the KOSDAQ market, it is necessary to expand the scope of corporate research to alleviate information asymmetry. The extremely low proportion of 'sell' recommendations among analysts also sets unrealistic expectations. Therefore, we need to redesign the incentive structures and independence of analysts."

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Peter Stein, CEO of the Asia Securities Industry & Financial Markets Association (ASIFMA) and the Global Financial Markets Association (GFMA), stressed the need for smoother investment by foreign investors. He said, "Making the market more attractive to foreigners is about ensuring their investments can proceed without friction. If increased trading in Korea is accompanied by difficulties in execution or higher collateral requirements, such obstacles will prevent the market from functioning efficiently and will hinder investor transactions."

He further highlighted that trading must remain smooth even with the introduction of a shorter settlement cycle (T+1). Stein remarked, "If T+1 is introduced abruptly, it can cause significant system problems. For example, FX settlements could become more complicated. Therefore, it is necessary to upgrade the infrastructure in advance before implementing T+1."

This content was produced with the assistance of AI translation services.