As the Corporate Value-Up Program marks its second anniversary, capital market experts pointed to "more substantive disclosure" as the next task for expanding the system. They argued that Value-Up disclosures should not stop at large-cap blue chips but take root as a tool for market re-rating of undervalued firms, small- and mid-cap listed companies, and growth companies with significant information asymmetry.
The Korea Exchange (KRX) held a seminar on Nov. 27 at its headquarters in Yeouido, Seoul, marking the second anniversary of the Corporate Value-Up Program and discussing its achievements and future tasks. About 200 people attended, including officials from pension funds, asset managers, and listed companies.
Kim Jung-young, executive director of KRX's Management Support Division, said in his keynote presentation that the program has contributed to a stock market re-rating and expanded shareholder returns. As of the 21st, 733 companies had disclosed corporate value-up plans, accounting for about 87% of the KOSPI's market capitalization. "The Value-Up Index has risen 273.9% since its launch in late September 2024, outpacing the KOSPI's gain over the same period by 72.5 percentage points, and the net asset value of related ETFs has grown to 4.2 trillion won," Kim said. The exchange plans to strengthen tailored support to boost participation by smaller listed firms, publicly identify low-PBR companies, and provide governance consulting and stewardship code compliance reviews.
Kang So-hyun, head of a department at the Korea Capital Market Institute, said value-up disclosures are sending positive signals to investors. According to Kang, disclosing companies recorded returns about 1.5% above the market on the day of disclosure, and portfolios of disclosing firms outperformed portfolios of non-disclosing firms with similar characteristics over the medium and long term. The disclosure effect was especially pronounced for smaller firms and those with limited analyst coverage and investor relations activity. "As simplified disclosures have increased, we need standardized templates and amendment standards, and separate guidelines reflecting technological capabilities and market scalability are needed for companies listed under special exceptions," Kang said.
In the panel discussion, participants said value-up disclosures should not be left as a purely voluntary scheme but developed into a mechanism that promotes communication between companies and investors. Kim Hak-kyun, head of the research center at Shinyoung Securities, said the issue of low-PBR companies should be analyzed in terms of market misperception, controlling-shareholder-driven decision-making, and low capital efficiency. "The more mature a company is, the more it must explain to shareholders how it will use its retained capital," he said. "Listed companies do business with shareholders' money, so they have a duty to clearly disclose their plans."
The role of institutional investors was also emphasized. Lee Dong-sup, head of the stewardship responsibility office at the National Pension Service, said institutional investors should expand engagement to encourage companies to participate in value-up disclosures. He also noted the need to link voting rights when disclosures are inadequate or diverge from actual implementation. "If we compare disclosed content with the company's actual execution and find it lacking, we should be able to express opinions on agenda items such as the appointment of related directors or approval of financial statements," Lee said.
Sohn Chang-wan, professor at Yonsei University Law School, emphasized board accountability against the backdrop of household assets shifting from real estate to the stock market. He said that for the rise in stock prices to be more than a one-off, capital allocation and governance improvements must go hand in hand. "We must consider how to keep the elevated index on a stable upward trajectory, and in that process examine what role the board should play," Sohn said.
Kim Ji-san, executive director at Kiwoom Securities, who joined the discussion as a representative of an award-winning firm, said, "In the securities industry, there is a dilemma between expanding shareholder returns and bolstering capital." He added that sustainability improves only when corporate value enhancement becomes a board-level capital policy rather than a personal task of the CEO or CFO. Both Kim and Kang agreed on the direction of expanding disclosures but stressed that companies must establish goals and implementation review systems that investors can understand, rather than settling for perfunctory disclosures.
