Democratic Party chief meets FKI leadership

Lee Jae-myung, leader of the main opposition Democratic Party of Korea (DPK), met with the Federation of Korean Industries (FKI) leadership earlier this week. It was the first meeting between a DPK leader and FKI in a decade, since then-party leader Moon Jae-in met with FKI’s predecessor, Heo Chang-soo, in 2015. This week’s meeting did not resolve key differences between DPK and FKI on corporate governance reform, the 52-hour workweek exemption for the semiconductor industry, or other pressing economic issues.

Lee’s outreach to FKI appears to be part of a broader effort to project his party as business-friendly, likely with an eye on an early presidential election. He has already met with several major business organizations, including the Korea Chamber of Commerce and Industry. By engaging with FKI—an organization long shunned by the DPK as a "conglomerate lobby"—Lee is signaling a shift in tone.

During the meeting, FKI Chairman Ryu Jin urged Lee to reconsider his party’s proposed revision to corporate law, which would expand directors’ fiduciary duty from serving the "company" to serving both the "company and shareholders." Lee, however, defended the proposal, arguing that it would enhance transparency in capital markets and help eliminate the so-called "Korea discount." He also dismissed calls to include an exemption for semiconductor firms from the 52-hour workweek regulation, stating that the current system allows for sufficient flexibility. For someone who has recently championed “business-led growth,” Lee’s unwillingness to heed the concerns of corporate leaders is regrettable.

One notable development was Lee’s indication that he is open to reconsidering Korea’s strict laws on corporate breach of trust. Many business leaders fear that expanding fiduciary duty could lead to an influx of lawsuits from minority shareholders and foreign funds, potentially stifling decision-making. However, since breach of trust laws exist not only in corporate law but also in Korea’s criminal code and the Act on the Aggravated Punishment of Specific Economic Crimes, addressing this issue requires a comprehensive legal overhaul. Lee also reportedly emphasized the need for regulatory reform, proposing a systematic review where unnecessary regulations would be clearly identified and eliminated.

At a time when Korean companies are already grappling with economic uncertainties, including U.S. protectionist policies under the Trump administration and weak domestic consumption, the proposed corporate law amendments could further erode business confidence. The main cause of the Korea discount is not the absence of the word “shareholder” in corporate law but rather the weakening of corporate innovation and future growth potential. That said, Lee’s openness to revisiting breach of trust laws is a step in the right direction. If the DPK is serious about reducing regulatory burdens, it must follow through with concrete action, not just rhetoric.