Prescribe that the internal rules on governance structure of each financial company shall include matters concerning strengthened transparency of the procedures for selecting chief executive officers, tightened independence and expertise requirements when selecting outside directors, and guaranteed independence of the internal auditing body

Details

Method of consecutive appointment of outside directors to prevent lack of work continuity and expertise arising from mass replacement of directors 
Standards to ensure the pool of outside director candidates reflects talent groups recommended by various stakeholders and outside experts

Criteria for assessing whether the members of the board of directors represent the various areas of expertise necessary for the management of a financial company including finance, IT, law, and industry
Matters concerning the reasons for activating the transfer procedures for chief executive officers and eligibility requirements (including financial expertise) for candidates
Method of reporting to shareholders on the yearly suitability assessments of the candidates for chief executive officers and the results thereof 
Matters concerning the guarantee of the rigts of the audit committee to supervise the work of the department in charge of audit affairs, and prior negotiation with the audit committee on personnel policies for auditing staff
Matters concerning the guarantee of the minimum working period for auditing staff, and prevention of unfavorable treatment in relation to the performance of auditing dutie

Partial Amendment to the Enforcement Decree of the Act on Corporate Governance of Financial Companies

The Enforcement Decree of the Act on Corporate Governance of Financial Companies shall be partially amended as follows.
Article 13, paragraph 1, subparagraph 1; items G through I shall be newly inserted as follows.
    G. Method of consecutive appointment of outside directors
    H. Standards to ensure the pool of outside director candidates reflects talent groups recommended by various stakeholders and outside experts
    I. Assessment criteria to determine whether the board of directors consists of a balanced mixture of the various areas of expertise necessary for the management of a financial company including finance, economics, strategy and planning, law, accounting, consumer protection, and information technology
In Article 13, paragraph 1 subparagraph 4, item A, “The principle of the transfer of business control of the chief executive officer” shall read “The principle of the transfer of business control of the chief executive officer and reasons for activating the transfer procedures,” and item B of the same subparagraph shall read as follows.
    B. Qualifications of the chief executive officer (including indicators to assess financial expertise, such as finance industry-related experience for a certain period)
Article 13, paragraph 1, subparagraph 4, item F shall be newly inserted as follows.
    F. Criteria for selecting candidates of chief executive officers, yearly suitability assessment of the candidate pool, and method of reporting to shareholders
Article 13, paragraph 1, subparagraph 5 shall be newly inserted as follows.
  5. Matters concerning audit committee activities and internal audit affairs
    A. Matters concerning the guarantee of the rights of the audit committee to supervise the work of the department in charge of audit affairs
    B. Matters concerning the minimum period of continuous service and status guarantee of audit staff
    C. Matters concerning the prevention of unfavorable treatment against audit staff due to the performance of auditing duties
    D. Matters concerning prior negotiation with the audit committee on personnel policies for the department in charge of auditing
In Article 16, paragraph 1, subparagraph 4, “the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Service Commission” shall read “Bank of Korea under the Bank of Korea Act, the Financial Supervisory Service under the Act on the Establishment, etc., of the Financial Service Commission.”
In Article 17, paragraph 1, subparagraph 1, “non-standing directors” shall read “auditors”; in paragraph 2, subparagraph 1 of the same Article, “auditors” shall read “outside directors, auditors”; in the main sentence of subparagraph 3 of the same paragraph, “employees” shall read “Persons determined following deliberation and a resolution by the Remuneration Committee”; and in the main sentence of paragraph 3, subparagraph 2 of the same Article, “outside directors and non-standing directors” shall read “non-standing directors).
In requirement item B in the attached Table 1, subparagraph 1, “financial institution which is a corporate group subject to restriction on cross share-holding, etc.” shall read “financial institution which is a corporate group subject to disclosure under the Monopoly Regulation and Fair Trade Act.”

Addenda

Article 1 (Enforcement Date) This Decree shall enter into force as of the date 3 months after promulgation; Provided, that the amended provisions of Article 17, paragraphs 2 and 3 shall enter into force as of the date of promulgation.

Article 2 (Applicability to the Preparation of a Remuneration System, etc.) The amended provisions of Article 17, paragraph 1 shall apply starting from the first session of the Remuneration Committee after the enforcement of this Decree.