A Study on the Executive Officer System in the Proposed Amendment of Korean Commercial Code

Korean Government proposed the proposed amendment of Korean Commercial Code to The National Assembly of Republic of Korea in 26th of September 2007. This proposed amendment contains a proposal of the establishment of the executive officer system. The executive officer system separates the supervision functions and the management functions of the board of directors to enforce the supervision and vigilance functions of the board of directors to the corporate management, and the authority to execute and administer the corporate policies determined by the board of directors delegate to executive officers. In this proposed amendment all corporations can choose the executive officer system. Officers are selected and are removable by the board of directors, and the status and liability of executive officers are as similar to those of directors, and executive officers can hold concurrently a position of directors. But in small and closely-held corporation executive officer is not necessary, to the grand-scale corporation which capital is over two trillion won it is desirable to make one's duty to establish the executive officer system. Moreover, to enforce the supervision function of the board of directors on corporate management in Korean corporation, it should be prohibited that executive officers hold concurrently a position of directors. And this proposed amendment apply the provision on the limitation of the directors' negligence liability correspondingly to the liability of executive officers, but executive officers and directors have many differences in authority and functions each other, this part should be eliminated.