Aju Corporate Management Research Institute Evaluates 1,035 Businesses, Reporting an Average Overall Score of 37.1

Recent environmental, social, and governance (ESG) performance assessments indicate that corporate governance standards are on the rise, primarily propelled by stronger protections and disclosures regarding shareholder rights. Analysts point out that this upward trend stems from a greater number of firms earning favorable scores for transparent dividend policies and active share buyback and retirement initiatives.

A report titled "2026 ESG Evaluation Results Review," published on the 15th by the Aju Corporate Management Research Institute, reveals that the overall average score for the 1,035 corporations examined reached 37.1 points—a 0.6-point increase compared to last year. The collective average grade held steady at BB. Top-tier ratings (AAA to AA) were achieved by 142 companies (13.7%), while 430 businesses (41.5%) landed in the A to BB bracket.

Although the share of companies trapped in the lowest C grade fell from 18.2% to 15.8%, enterprises rated BB or lower still comprised a majority at 631 firms (61.0%).

When broken down by category, the governance score improved from 42.6 to 44.6 points, and the environmental score rose from 25.6 to 26.2 points. Conversely, the social category dipped marginally from 35.9 to 35.2 points.

Disparities across sectors remained stark. The environment and social fields saw heavy clustering in the C grade, representing 55.5% and 31.2% of companies, respectively. In contrast, governance skewed higher, with the BB grade representing the largest share at 29.4% and C-grade firms accounting for a negligible 1.5%.

The research institute observed that "the proportion of C-grade enterprises slightly widened from 54.5% to 55.5%, illustrating deeper polarization." It further noted that "since C-tier companies averaged only 1.6 points in environmental impact, the main driver keeping them at the bottom is not poor operational performance, but rather a lack of adequate public disclosures."

The findings highlight that governance evaluations experienced significant leaps in the shareholder rights domain, fueled by clearer dividend reporting, corporate commitments to purchasing and retiring treasury shares, and strict execution of those plans.

Within the governance sector, the proportion of companies earning an A grade or higher grew by 2.2 percentage points to reach 32.9%. Among sub-categories, board management advanced 0.6 points to 28.4 points, and auditing mechanisms climbed 2.3 points to 53.9 points. The shareholder rights segment experienced the most dramatic growth, soaring 4.4 points to 55.4 points.

An examination of annual reports from major enterprises like Nongshim showed that corporate dividend frameworks have become significantly more detailed. Companies are now routinely outlining target payout ratios, enforcement timeframes, specific calculation metrics, and the rationale behind restriction clauses.

Experts emphasize that predictable dividends require alignment between formal policy and operational execution. Following regulatory reforms introduced in 2023 that removed rigid quarterly cutoff dates, authorities now encourage firms to clearly distinguish year-end payouts from interim dividends and transparently map out operational timelines.

Meanwhile, the capital market experienced a dramatic surge in stock retirements. Figures from the Financial Services Commission cited in the report show that share cancellations by listed entities expanded from roughly 13.9 trillion won in 2024 to 21.4 trillion won in 2025, before skyrocketing to approximately 43.1 trillion won between January and May 2026.

The research institute advises businesses to treat dividends and treasury stocks as core components of balanced capital allocation that weigh growth investments against financial stability. For dividends, companies ought to specify funding origins and adjustment contingencies; for treasury shares, they should explicitly separate plans for cancellation from shares designated for retention or disposal.

Ultimately, the institute stresses that long-term governance enhancement relies on institutionalizing transparent communication, ensuring that corporate strategies concerning dividends and share buybacks are clearly articulated and fulfilled for all shareholders.

[ⓒ Global Economic Times. 무단전재-재배포 금지]