[Background] 

Internal Control: The need to ​strengthen internal control has been raised due to soundness issues in local fishery cooperatives, such as rising delinquency rates, and the emergence of large cooperatives with significant mutual finance operations.

It is necessary for cooperatives and depositories above a certain scale to appoint a standing auditor to prevent financial accidents, enhance the efficiency of audit tasks, and strengthen continuous internal monitoring functions.

Governance Structure: The current long term of office (4 years) for the standing director, who is solely responsible for credit business operations, leads to rigidity in the governance structure.

It is necessary to improve the system to secure flexibility in the re-appointment process and strengthen accountability for management performance, especially in light of the deteriorating soundness of mutual finance.

[Main Points] 

① Introduction of Mandatory Standing Auditor System (Proposed Article 46(3))

Mandate a standing auditor for large cooperatives with significant available asset sizes.

Delegate the specific scope of application, such as the asset criteria, to the Enforcement Decree.

② Adjustment of Standing Director's Term of Office (Proposed Article 50(1))

Delete the proviso related to the evaluation of the standing director's work performance.

Shorten the term of office to 2 years to strengthen accountability for management performance.