Corporate compliance system

We commit to promote awarding outside board directors, compliance officers, and compliance assistants with authorities to supervise and control corporate compliance management and commit to expand public disclosure of important business management risk information.

Completion Status:
Partially fulfilled

Commitment filtering:

Specific: ✔ yes

This commitment aims to develop a corporate compliance system, such as an external board directors, compliance officers and compliance assistants to ensure monitoring and control functions, and pursue the increased disclosure of important business risks.

Measurable: ✔ yes

We can measure the introduction of related policies or administrative measures that improve corporate compliance through the appointment of an external board of directors, compliance officers and compliance assistants with the authority to supervise and control compliance.

Last updated: 30 November 2020
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Evaluation:

According to the information provided by the ACRC, in June 2019 ACRC drafted the proposal to enhance the effectiveness of corporate compliance system and sent it to the relevant authority. Currently the system to promote compliance officers and assistants is being improved. For example, in January 2019, the Ministry of Justice amended the Standard compliance control guideline for listed companies. The Guidelines provide that: an internal reporting system for whistleblowing may be established, personal information about whistleblowers and details of related internal reports shall be kept confidential, extenuating circumstances shall be taken into consideration in cases where a whistleblower reports a tort or illegal act in which he or she has been involved, and no whistleblowers shall be subject to any disadvantages due to their whistleblowing.1 In January 2020, the Ministry of Justice has amended the Enforcement Decree of Commercial Act, to extend the disqualification requirement of listed companies to strengthen independence of outside board directors (January 2020). It stipulates that the following persons cannot serve as outside directors of a listed company: (1) anyone who worked as an outside director of such company for more than six years; (2) anyone who worked as an outside director of the company or any of its affiliates for more than nine years in total.1 In June 2020, the Ministry of Justice has also proposed an amendment to Act on Corporate Governance of Financial Companies to improve corporate governance regime.2 In addition, Fair Trade Commission established a guideline to make public announcement of corporate governance mandatory.  

Opportunities to accelerate commitment implementation
The five-year comprehensive anti-corruption plan should be used to further promote a corporate compliance system.

Reccomendations
Strengthen corporate compliance system, through the appointment of an external board of directors, compliance officers and compliance assistants to ensure they monitor and control compliance and pursue increased disclosure of business risks.

Sources:
  1. The Law Reviews, The Corporate Governance Review – Edition 10, South Korea, https://thelawreviews.co.uk/edition/the-corporate-governance-review-edition-10/1222300/south-korea
    May 2020
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  2. Kim & Chang, The Ministry of Justice Amending the Korean Commercial Code to Reinforce Regulations on Corporate Governance, 18 June 2020 https://www.kimchang.com/en/insights/detail.kc?sch_section=4&idx=21522
    18 June 2020
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