Financial regulator publishes guideline for revised corporate governance code

SEOUL, The financial regulator on Tuesday published a guideline for the revised corporate governance code for financial firms that requires companies to clearly state who is responsible for certain actions or decisions. The revised law, set to go into effect Wednesday, seeks to enhance the accountability of financial firms and their employees to shareholders and customers in case of financial incidents, such as incomplete sales of products or embezzlement of funds by officials. Under the revised law, financial companies will be required to draw up and submit a new organizational chart on accountability, detailing which official is responsible for which action. "Responsibility refers to the obligation to internal control and risk management that financial companies and their employees must observe under related laws," the Financial Services Commission (FSC) said in a press release. "Responsibility differs from business duties in that it is an obligation of financial firms and their employees to maintain a nd implement internal control so no legal violation will occur while the companies or their employees execute their business duties," it added. The manual explains the chief executive official (CEO) should adequately distribute corporate responsibilities so that they are not omitted, overlapped or skewed toward a few executive officials. Financial firms are required to submit an organizational chart of responsibilities to the financial authorities after having them approved by their boards, according to the FSC. "Considering that there is no incentive for financial firms to submit their accountability structure charts at an early date ... the financial authorities are reviewing ways to test run the new system and incentivize financial firms that take part in the test run so that the financial industry can begin introducing an accountability system at an early date," it said. The financial regulator said it will also offer guidelines on internal penalties for failures to comply with companies steps aimed a t enhancing accountability and transparency in the near future. Source: Yonhap News Agency