[Bills in Focus] Addressing smartphone addiction, strengthening cooperative finances

Proposed Bill: Partial Amendment to the Act of Corporate Governance of Financial Companies

Proposed by Rep. Lee Jung-mun (Democratic Party of Korea)

● In response to recent financial incidents such as the misselling of funds and large-scale embezzlements, this amendment is part of ongoing efforts to promote responsible management within the financial sector. The core objective of the amendment is to establish unified disciplinary standards for employees across all financial companies when internal control failures occur.

Additionally, it seeks to improve the internal control system by removing the exemption that previously allowed certain financial subsidiaries whose parent companies had established internal control standards from developing their own. The amendment also clarifies the duties of financial companies to ensure the effective implementation of these internal control standards.

Proposed Bill: Partial Amendment to the Commercial Act

Proposed by Rep. Yoo Dong-soo (Democratic Party of Korea)

● This bill seeks to protect shareholders by explicitly extending the duty of loyalty of corporate directors to include shareholders' interests. It also mandates that directors consider environmental and societal impacts when making decisions to promote sound corporate governance.

Rep. Yoo highlighted that the Korean capital market has been undervalued, partly due to inadequate protections against actions that infringe on shareholder interests, commonly referred to as the "Korea Discount." Under current law, directors have a duty of loyalty only to the company, which means they may not be held accountable for actions contrary to shareholder interests.

"The amendment explicitly imposes a duty of protection towards shareholders, ensuring that the collective interests of all shareholders are safeguarded and preventing any specific shareholder from infringing on the rights or interests of individual shareholders. I hope this will protect the long-term interests of shareholders, contribute to company growth and restore investor confidence, ultimately addressing the undervaluation of our capital market," Rep. Yoo said.

Pending Bill: Partial Amendment to the Act on Promotion of Information and Communications Network Utilization and Information Protection

Proposed by Rep. Cho Jung-hun (People Power Party)

● In response to increasing concerns over youth smartphone addiction, this bill introduces protective measures for adolescents under the age of 16. It proposes parental discretion for setting daily limits on social media use and requires parental consent for algorithms that could be addictive.

Promulgated Bill: Enforcement Decree of the Community Credit Cooperatives Act

Competent Authority: Ministry of the Interior and Safety

●This amendment aims to enhance the financial stability of community credit cooperatives by reducing the borrowing limits from the Korean Federation of Community Credit Cooperatives. It also improves the methods for maintaining reserves for reimbursements. Additionally, the amendment increases the number of external experts on the personnel recommendation committee to promote greater fairness and transparency.

Administrative Announcement: Partial Amendment to the Framework Act on Science and Technology

Competent Authority: Ministry of Science and ICT

● Although the requirements for preliminary feasibility studies for research and development projects have been abolished, it remains essential to conduct a thorough evaluation of the promotion plans and feasibility of R&D projects that involve large-scale construction due to the significant risks associated with potential failure.

Therefore, this amendment introduces a system to efficiently evaluate the feasibility and suitability of such projects, including those involving large-scale accelerators and space launch vehicles.

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The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For any queries about the bills, contact cr@draju.com