S. Korea’s FSC proposes corporate governance revision for financial firms

The revisions include the adoption of responsibilities maps and management of internal control duties by executive officers.

The Financial Services Commission (FSC) has issued a preliminary notice regarding a proposed revision to the enforcement decree of the Act on Corporate Governance of Financial Companies and its supervisory regulation. 

This revision aims to implement changes to the act, such as the adoption of responsibilities maps by financial companies and the management of internal control duties by executive officers.

Key points of the proposed revision include:

• Specific details on preparing and submitting responsibilities maps, including the requirement for financial companies to submit responsibilities statements and responsibilities diagrams within seven business days of board approval.
• Establishment of timelines for submitting responsibilities maps based on the size and type of financial companies. Different deadlines will apply to banks, financial holding companies, financial investment businesses, insurance companies, specialized credit finance businesses, and savings banks.
• Clarification of the internal control oversight duty of chief executives, including examining potential conflicts of interest and preventing violations of internal control standards.

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The proposed revision will undergo a public comment period from 13 February to 25 March. 

After deliberation by the FSC and a legislative review process, the revised measures are expected to take effect on 3 July.

To support the transition, the FSC, along with industry associations and financial companies, will establish a support centre and hold regular meetings with stakeholders. Best practice guidelines may also be prepared for dissemination where necessary.