For regular public companies: Cumulative voting is not regulated in securities law, so we will apply the corporate law in the order of law application (Securities Law – specialized laws – corporate law).
According to clause 3, Article 148 of the Enterprise Law, except for cases where the company’s charter provides otherwise, the voting for the election of members of the Board of Directors and the Supervisory Board must be conducted by cumulative voting, whereby each shareholder has a total number of votes corresponding to the total number of shares multiplied by the number of members elected to the Board of Directors or the Supervisory Board.
Thus, according to this provision, cumulative voting in regular public companies is not mandatory but allows flexible regulations in the company’s charter. Only when the company’s charter does not have provisions, cumulative voting becomes mandatory.
However, this provision in the Enterprise Law does not apply to public companies that are credit institutions. Because, considering the order of law application for public companies that are credit institutions, the priority is given to the application of laws on credit institutions first. Accordingly, according to Point d, Clause 3, Article 59 of the Law on Credit Institutions, the election of members of the Board of Directors and the Supervisory Board must be conducted by cumulative voting. Thus, cumulative voting for the election of members of the Board of Directors, members of the Supervisory Board is a mandatory procedure for public companies that are credit institutions.
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