The outside director system was introduced to overcome the economic crisis of Korea in 1997. We continue to change the corporate governance for transparency, liability of business management and to enhance the utility. Among them, it is the most conspicuous that the board of directors was changed in the supervision and policy decision function of management. The board of directors system is based on the assumption that ownership and management should be separated. As a result, the competence of the general meeting of shareholders was decreased and Korean Commercial Law conceded the powerful executive competence to the board of directors. The directors, as a member of the board of directors, makes a decision on the business and affairs of their corporate and supervises the execution of corporate affairs. And as a representative director, he manages the corporate business or affairs. In this paper, I will examine why the board of directors on Commercial Law could not play its function, and the established basis of outside directors that accepted to strengthen its function. And then, I propose improvement measures in order to outside director system in Commercial Law.

The outside director system was introduced to overcome the economic crisis of Korea in 1997. We continue to change the corporate governance for transparency, liability of business management and to enhance the utility. Among them, it is the most conspicuous that the board of directors was changed in the supervision and policy decision function of management. The board of directors system is based on the assumption that ownership and management should be separated. As a result, the competence of the general meeting of shareholders was decreased and Korean Commercial Law conceded the powerful executive competence to the board of directors. The directors, as a member of the board of directors, makes a decision on the business and affairs of their corporate and supervises the execution of corporate affairs. And as a representative director, he manages the corporate business or affairs. In this paper, I will examine why the board of directors on Commercial Law could not play its function, and the established basis of outside directors that accepted to strengthen its function. And then, I propose improvement measures in order to outside director system in Commercial Law.

corporate governance, outside director system, board of directors, outside director, inside director