DR & AJU’s Comments
Korean companies that are listed in the NYSE, including Posco Holdings, KT, SKT, LG Display, KB Financial Group, Woori Financial Group, Shinhan Financial Group, Korea Electric Power Corporation, and the MMORPG game company Gravity, must promptly prepare and implement corporate clawback policies by December 1, 2023. Companies that fail to comply may be delisted or banned from U.S. stock exchanges. Therefore, domestic companies preparing to be listed in exchanges in the U.S. must especially be alert of the coming changes.
The SEC’s clawback rule requires companies to strictly manage their financials, as a company’s financial statement can be crucial information to current and future investors. Likewise, companies will increasingly be expected to establish internal controls in corporate governance to create an equitable and orderly financial system.
Similarly, Korea is actively reviewing and seeking to improve issues in the existing financial system. Korea’s Financial Services Commission (the “FSC”) and Financial Supervisory Service (the “FSS”) have recently launched a joint task force to improve the corporate governance of banks in relation to compensation policies and are also currently operating a working group. Specifically, in a meeting with the CEOs of major financial holding companies, the FSC announced plans to implement the following measures: (i) the adoption of incentive plans for the long-term performance of executive officers; (ii) the reinforcement of shareholder control for executive remuneration plans; (iii) the expansion of disclosures for individual executive remuneration payment; and (iv) the establishment of legal grounds to recover incentive-based pay in the event that the company suffers a loss.
DR & AJU's Washington, D.C. Liaison Office and D&A Advisory, Inc. deliver accurate and crucial information to help companies operating overseas to effectively respond to changes in local laws and regulations and ensure compliance with applicable laws by providing comprehensive advisory on implementing internal control strategies.
DR & AJU will continue to closely monitor developments in global public relations and international affairs to respond expeditiously with close cooperation with businesses when necessary.
Introduction to GCG
DR & AJU’s Global Compliance Group (the “GCG”) is founded with the purpose to prevent and minimize corporate risks for companies in Korea. GCG's goal is to create a favorable business environment by providing strategic solutions to prevent, manage, and minimize various risks a corporate entity may face doing business domestically or globally.
DR & AJU GCG provides various risk management services from pre-transaction investigation, strategic research, and field investigation to review of a potential dispute, monitoring, and representing in litigations and post-litigation follow-up work. Furthermore, GCG aims to be a strategic partner to our clients in their creative management by predicting and preparing political and regulatory risks due to changes in global dynamics or political landscape that our clients may face in or out of Korea.
DR & AJU GCG team comprises experienced lawyers of various backgrounds, including the prosecution, police, politicians, administration officials, military generals and intelligence officers, national security authorities, North Korea experts, investigators, computer forensics experts, and financial and media experts.
