I just realized that I have written an article on the new Compliance Officer System in the Korean language, but have not written about the matter in the English language. Sorry to the handful of the readers of this blog that may be interested in this article.
The Korean article appeared in the Korean Language Legal Times.
The new system will come into effect when the amended KCC comes into effect in April of 2012.
Compliance Control Standards under Article 542-13 of the amended Korean Commercial Code (KCC) will be only applied to listed companies with capital holdings above a threshold amount.
The determination of the threshold amount and the qualification to become a “Compliance Officer,” along with other key aspects of the amended KCC, has been delegated to the President through his power to issue presidential decrees. Thus, this post will be updated when the presidential decree is issued next year.
Key Aspects of the Compliance Control Standards System in Korea
- The Compliance Officer must have a three-year term;
- The Compliance Officer must be a full-time member of the company;
- The Compliance Officer must (a) Have a license to practice law in Korea; OR (b) Have taught law for five years as at least an assistant professor. A presidential decree may prescribe other requirements. Wow- even I qualify.
- The Compliance Officer may develop Compliance Control Standards that must be followed by all company employees and officers; and,
- The Compliance Officer may be held personally liable based on fiduciary duties to company.
I advise all foreign companies with a sizable footprint in Korea to implement this system. In-house counsel at foreign companies in Korea have nothing to fear and the company will benefit when the ubiquitous audit and government investigations occur.
A few other posts I have made on the amended KCC:
- Limited Liability Companies under The Amended Commercial Code of Korea
- Korean Commercial Code Revisions Make Capital Reductions in Korea Easier
- Classification of Directors in Korea under The Korean Commercial Code: Inside, Outside and Other Directors in Korea
- Establishing a Company in Korea: New Corporate Forms Available under Revised Korean Code
- Squeezing-out Minority Shareholders under Korean Corporate Law
- Limiting Director Liability under Korean Law: Don’t drop the Insurance Policy Yet
- Compliance Control in Korea: Amended KCC
- Limiting Director Liability in Korea under new KCC
- Renewal Rights/Terms for Commercial Leases in Korea Under Amended Commercial Building Lease Protection Act of Korea
- Legal/Compliance Checklist for your Korean Company: Top 7 Things to Do Before you Do Business in Korea
- Executive Compensation Necessary to be Publicly Disclosed in Korea: Korean Commercial Law
- Involuntary Dissolution of a Company in Korea: Shareholder Disputes in Korean Companies
- Korean Merger Control and the Korean FTC