Seoul: South Korea's parliament on Monday passed a revision to a corporate law that will make boards at major companies more accountable to shareholders, as the government promotes reform to lift undervalued equities.

Asia's fourth largest economy is dominated by family-run conglomerates -- known as chaebol -- which maintain control through complex webs of cross-shareholdings that allow them to wield outsized power without majority stakes.

Critics have long argued that greater transparency in corporate governance is needed at such groups, including tech giant Samsung Electronics.

Lawmakers passed the revised Commercial Act with 180 votes in favour, while opposition members, who had staged a filibuster, boycotted the vote.

The revised bill requires firms with assets exceeding $1.4 billion to introduce a new voting system that allows shareholders to concentrate their votes when electing board members.

The measure, designed to strengthen minority shareholders' rights, would effectively allow them to use all of their votes on a single candidate to elect the board representative they want.

The revision also lifts the number of audit committee members not elected by controlling shareholders from one to at least two.

President Lee Jae Myung, elected in June, campaigned on a platform of corporate reform to better protect minority shareholders.

South Korea's stock market is known for the so-called Korea discount, with shares undervalued compared with global peers in part due to opaque corporate governance at family-run conglomerates.

The reform bill "has enhanced corporate governance transparency, paving the way for the advancement of the capital market and the realisation of economic justice," said ruling Democratic Party lawmaker Park Soo-hyun in a statement.

But business groups voiced concern, warning it could increase management disputes and legal risks.

"We urge parliament to pursue balanced legislation that minimises such adverse side effects," the Federation of Korean Industries said in a statement.

Fueled by anticipation of corporate reform, South Korea's benchmark Kospi index has risen 15.8 percent since Lee's inauguration in June.

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