'Pilot Operation of Accountability Structure' with Participation of 18 Companies... Authorities Conduct Inspection and Advisory Consulting

Policy to Provide Feedback to Each Financial Company Within the Year
Expansion of Pilot Operation in Sectors Such as Geumtu and Insurance Also Under Consideration

As a result of the application process for participation in the pilot operation to facilitate the early establishment of the accountability structure following the enforcement of the amended Corporate Governance Act, 18 major holding companies and banks have decided to participate.

According to financial authorities on the 3rd, as of the deadline on the 31st of last month, nine financial holding companies including Shinhan, Hana, KB, Woori, NH, DGB, BNK, JB, and Meritz, as well as nine banks including Shinhan, Hana, Kookmin, Woori, Nonghyup, iM, Busan, Jeonbuk, and IBK, have agreed to participate in the pilot operation of the accountability structure.

Financial companies participating in the pilot operation are expected to strengthen their internal control capabilities through the actual operation of an internal control management system based on the accountability structure from the day they submit it. Participating financial companies will operate the internal control management system based on the accountability structure during the pilot period by utilizing computerized systems or their own checklists (manual) to efficiently implement internal control management measures for each executive.

During the pilot operation period until January 2nd of next year, incentives for early adoption will be applied, such as not holding companies accountable under the Corporate Governance Act if internal control management obligations are not fully performed.

The financial authorities have formed a working group consisting of 14 related departments involved in supervision and inspection tasks to provide efficient and systematic consulting that can be practically helpful to the participating companies. The working group will review and advise on legal correction and supplementation reasons, appropriateness of accountability allocation, etc., based on the submitted accountability structures, and plans to provide feedback to each financial company within the year.

A financial authority official explained, "While reviewing the preparation status of financial investment and insurance industries, which are subject to submitting the accountability structure, we will also consider expanding the pilot operation to other financial sectors," adding, "We will continue to communicate with the financial sector and support the stable establishment of the new system."