Kyung-Hoon Chun, Anti-Corruption and the Role of Corporate Law, Journal of Economic Law, Vol. 18, No. 2 (2019), pp. 91-119.
<Abstract>
In order to prevent corruption committed in or by corporations, in addition to punishment and prohibition imposed by the statutes, an internal approach is necessary that defines and coordinates roles and responsibilities of the various players contemplated by corporate law (e.g., shareholders, directors, statutory auditors). Current Korean law requires corporations to appoint compliance officers and adopt related regulations as ex ante measures, and imposes liability for breach of ‘duty to monitor’ as an ex post measure. However, redundancy of similar regulations and under-enforcement problem make the current law less than satisfactory. Based on analysis of the current law, this paper suggests the following. Compliance system (including anti-corruption system) within the company should be put in place by the autonomous decision of each company, rather than compulsorily by the statutes. The law should not be so much ambitious as to require one-size-fits-all model for roles and responsibilities of the various players within the company regarding anti-corruption activities. Instead of requiring mere “forms” such as appointment of certain officers and adoption of certain policies, the law should pay more attention to the “substance” by promoting internal systemization of anti- corruption activities.
<Keywords>
corruption, anti-corruption, internal control, compliance, duty to monitor
Kyung-Hoon Chun, Anti-Corruption and the Role of Corporate Law, Journal of Economic Law, Vol. 18, No. 2 (2019), pp. 91-119.
<Abstract>
In order to prevent corruption committed in or by corporations, in addition to punishment and prohibition imposed by the statutes, an internal approach is necessary that defines and coordinates roles and responsibilities of the various players contemplated by corporate law (e.g., shareholders, directors, statutory auditors). Current Korean law requires corporations to appoint compliance officers and adopt related regulations as ex ante measures, and imposes liability for breach of ‘duty to monitor’ as an ex post measure. However, redundancy of similar regulations and under-enforcement problem make the current law less than satisfactory. Based on analysis of the current law, this paper suggests the following. Compliance system (including anti-corruption system) within the company should be put in place by the autonomous decision of each company, rather than compulsorily by the statutes. The law should not be so much ambitious as to require one-size-fits-all model for roles and responsibilities of the various players within the company regarding anti-corruption activities. Instead of requiring mere “forms” such as appointment of certain officers and adoption of certain policies, the law should pay more attention to the “substance” by promoting internal systemization of anti- corruption activities.
<Keywords>
corruption, anti-corruption, internal control, compliance, duty to monitor