Short-staffed and overwhelmed: Kosdaq IR teams struggle under mounting disclosure rules

"Shareholders keep changing, yet we are told to communicate more."

The government has been pushing listed companies to expand shareholder communication as part of its corporate value-up and shareholder rights initiatives, but the response from the field is one of strain. Investor relations officers say their practical workload is growing rapidly as expanded English-language disclosure requirements, mandatory voting-result disclosures at shareholder meetings, tighter executive pay reporting, and preparations for the 2027 introduction of electronic shareholder meetings all converge at once.

Compounding the problem is the structure of the Kosdaq market itself, where the shareholder base turns over roughly every two months. That churn makes the burden even heavier. With the recent introduction of directors' fiduciary duty to all shareholders now raising the specter of litigation risk, practitioners are increasingly voicing the same complaint: more work, not enough people.

The Financial Services Commission and Korea Exchange said Monday that the government is pursuing a broad overhaul of corporate disclosure rules to modernize capital markets and address the so-called Korea Discount — the chronic undervaluation of Korean equities. Starting next year, companies will be required to disclose item-by-item voting results, including approval rates, from shareholder meetings. Executive compensation disclosure requirements will also be significantly tightened. A plan is also under way to extend English-language disclosure obligations — currently applied to Kospi-listed companies with assets of 2 trillion won (approximately $1.47 billion) or more — to large Kosdaq-listed companies by 2028.

The problem is that the staffing and organizational capacity to handle all of this simply does not exist at many companies. Small and mid-size Kosdaq firms in particular often cannot afford a dedicated IR team. Unlike large-cap companies that run full IR departments, many smaller Kosdaq firms have HR, general affairs, or management support staff doubling as IR officers, with one person routinely handling several roles.

"Companies with a market cap of around 100 billion won often find it difficult to maintain a separate, dedicated IR team," an official at one Kosdaq-listed company said. "There are plenty of cases where someone handling HR or general affairs also takes on IR duties, and with the expansion of English-language disclosures and shareholder response work on top of that, the burden on the ground is considerable."

Where earnings releases and disclosure management once formed the core of IR work, shareholder proposals, proxy solicitation, and explaining dividend policy have now become a much larger part of the job.

What companies find particularly difficult is the gap between the growing demand for shareholder engagement and the reality of how the market actually operates. At a recent roundtable for IR and disclosure officers at listed companies, the Korea Kosdaq Listed Companies Association said that with shareholders constantly changing, expanding communication with them is not straightforward in practice.

Turnover in the Kosdaq market, measured by the market cap-based share turnover ratio, stood at 710.55 percent in 2021, 461.19 percent in 2022, 607.92 percent in 2023, 522.30 percent in 2024, and 439.68 percent in 2025. The share turnover ratio is calculated by dividing the total value of shares traded over a given period by market capitalization — the higher the figure, the more frequently the investor base changes. The five-year average comes to 548.33 percent, which works out to shareholders turning over an average of 5.4 times a year.

The association described Kosdaq as "a market where shareholders change roughly every two months," adding that companies must simultaneously secure proxy votes for shareholder meetings and field dividend-related inquiries even as the shareholder base keeps shifting. "The demand to expand shareholder communication keeps growing, but the gap with reality is significant," it said. The recently introduced directors' fiduciary duty is cited as an additional source of concern. The association warned that minority shareholders are increasingly likely to raise objections and file lawsuits, and said that while disclosure and IR work were once the main focus, practitioners now have to factor in legal risk and litigation response as well.