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How should the independence of outside director be enhanced? Won, Dong Wook In the amendment of the Korean Commercial Code, the definition of the outside directors and limitation of the liability of the director tries to be introduced. The outside director has been introduced to improve the manager-monitoring capability of corporate boards of directors since the financial and currency crisis in Korea. But there are several problem concerning the outside director in Korea. The most important thing is the independence of the outside director. In the post-Enron era, the outside director continues to be the focus of corporate governance reform in the U.S. U.S. government is trying to tighten NYSE and NASDAQ listing requirements in relation to independent directors and the enactment of the Sarbanes-Oxley Act, which is the first step toward the federalization of corporate governance norms for outside directors. Delaware court stated the independence test for the outside directors in the case, In re Oracle Corp. Derivative Litigation which is different from the requirement that is set forth in Zapata Corp. v. Maldonado. The expectations for the independent director have never been higher than they are today in the U.S. and Korea. In Korea the roles of corporate boards in corporation have been changed and the outside directors, and audit committee have been introduced, finding out the necessity to pay attention to the independence of outside directors from the management. I think that it is necessary to change the recommendation system for outside director and introduce the limitation of liability and the business judgment rule for outside director.


How should the independence of outside director be enhanced? Won, Dong Wook In the amendment of the Korean Commercial Code, the definition of the outside directors and limitation of the liability of the director tries to be introduced. The outside director has been introduced to improve the manager-monitoring capability of corporate boards of directors since the financial and currency crisis in Korea. But there are several problem concerning the outside director in Korea. The most important thing is the independence of the outside director. In the post-Enron era, the outside director continues to be the focus of corporate governance reform in the U.S. U.S. government is trying to tighten NYSE and NASDAQ listing requirements in relation to independent directors and the enactment of the Sarbanes-Oxley Act, which is the first step toward the federalization of corporate governance norms for outside directors. Delaware court stated the independence test for the outside directors in the case, In re Oracle Corp. Derivative Litigation which is different from the requirement that is set forth in Zapata Corp. v. Maldonado. The expectations for the independent director have never been higher than they are today in the U.S. and Korea. In Korea the roles of corporate boards in corporation have been changed and the outside directors, and audit committee have been introduced, finding out the necessity to pay attention to the independence of outside directors from the management. I think that it is necessary to change the recommendation system for outside director and introduce the limitation of liability and the business judgment rule for outside director.