2/4/2026
Activist Fund-Sponsored ISS Seminar Raises Neutrality Questions
Korea Times (02/04/26) Hyun-woo, Nam
A planned seminar in Seoul by Institutional Shareholder Services (ISS), the world’s largest proxy adviser for institutional investors, is raising questions over the firm's neutrality, as the event is sponsored by a local fund. According to industry officials, the U.S. advisory firm will hold its first seminar in Korea at IFC Seoul in Yeouido on Feb. 12, weeks before Korean companies begin their annual general meetings and decide whether to accept shareholder proposals. The event is hosted by Bside Korea, the operator of a local shareholder platform that received seed investment from the fund Align Partners in 2021. Align Partners is sponsoring the seminar. With more than 1,700 global institutional investors as clients, ISS wields substantial influence at key moments in shareholder decision-making, including governance issues and mergers. In the Korean market, it has particular influence over foreign investors, who have relatively limited access to information about the companies they invest in. In 2019, ISS played a critical role in helping Hyundai Motor (KRX: 005380) and Hyundai Mobis (KRX: 012330) fend off Elliott’s demands by characterizing the fund’s proposals as excessive. In 2015, ISS opposed the merger between Samsung C&T (KRX: 028260) and Cheil Industries, a stance that later became a starting point for a prolonged controversy over the legitimacy of the deal. Industry officials say ISS' participation in an event hosted and sponsored by activist-linked entities may be seen as undermining the firm’s neutrality. Bside Korea's platform allows shareholders to launch or join shareholder campaigns and has been used by Align Partners in its engagements with companies including SM Entertainment (KOSDAQ: 041510), JB Financial Group (KRX: 175330), and Coway (KRX: 021240). In 2022, Align Partners requested that SM Entertainment terminate its contract with founder Lee Soo-man’s personal company and improve its governance structure, and ultimately succeeded in pushing through its demands. In 2024, the fund also secured the appointment of two outside directors to the board of JB Financial Group, and is currently pressing Coway to strengthen shareholder return policies and enhance its independence from its parent company, Netmarble, through Bside Korea. “Given the enormous influence that a major proxy advisory firm like ISS has on shareholder meetings, speaking at an event sponsored by an activist fund and hosted by an activism platform could send the wrong signal,” an industry official said. ISS rejected concerns over its neutrality, saying in a statement to The Korea Times that it will “discuss publicly disclosed information regarding our benchmark voting policies on Korea” and that “there will be no risks” of undermining its impartiality. “We have neither solicited nor received payment from the organizer for our participation, consistent with our policies,” ISS said. “Most importantly, we’re a policy-based organization whereby any proposal, whether filed by an activist or mainstream investor, must be measured against that policy, which is publicly disclosed. No preferential treatment can be afforded to any party, under our model. “ISS is not an activist or advocacy organization. Rather, we are an impartial, federally regulated service provider to institutional investors who direct and control their own proxy voting decisions.” Align Partners CEO Lee Chang-hwan told The Korea Times that the seminar is open to all institutional investors and listed companies interested in attending, and will be helpful for all market participants. "Align Partners decided to sponsor the event at the request of Bside Korea, taking into account the positive impact that ISS' visit could have on Korea’s capital market," he said. "In particular, the law firm Yulchon, which provides defensive advisory services to listed companies, is also participating as a sponsor, making it a meaningful event for all parties involved." He added that Align Partners has made a minority investment in Bside Korea, but it is not involved in the platform’s management. Bside Korea stressed that it operates as a platform used both for shareholder activism and companies defending their management rights, citing its involvement in a campaign related to Kolmar Holdings' conflict over its managing rights. "We do not take sides. Our company also carries out many side projects with listed firms,” Bside Korea CEO Lim Sung-chul said. "The upcoming seminar will be open to all listed companies without restrictions on participation. We are also carefully addressing neutrality to improve foreign investors’ access to local companies. Many other firms hold similar seminars inviting proxy advisory firms, and we do not believe such events significantly undermine neutrality."
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