Terms of listed firms' execs to be set at 1 yr.

A scheme to reduce the term of office for the executive officers of listed companies from three years to one year is being reviewed. Moreover, the authority of outside directors is likely to be reinforced, meaning companies might be forced to show detailed operating records and accounting books to them.

The Ministry of Justice held a public hearing Tuesday at the lawyer's hall in Seocho-dong, Seoul on corporate governance reform and resolved to implement the reform bill after completing legislative procedures.

As for the class action suit system, the core agenda for the corporate governance reform, the government will arrange a special provision with the Civil Proceedings Act separate from the business law.

Lawyers, university professors, and corporate representatives engaged in a heated debate at the public hearing on the five core issues of the corporate governance reform presented by the Ministry of Justice.

Debaters presented pros and cons on the five core issues, including reforming the board of directors meeting, reinforcing the rights of minor shareholders, mandating cumulative voting, reinforcing shareholders' preemptive rights on new issues and supervising transactions among interested parties.

According to the Ministry of Justice's reform proposal, the mandated committee that nominates candidates for outside directors in listed companies with assets over 2 trillion won would gradually be tailored to include listed companies with assets less than 2 trillion won. Moreover, the rights of minor shareholders would be reinforced. Even a minor shareholder holding just one share would be given the right to request the election of auditors to prevent any illegal activity by companies.

Choi Young-Hae moneychoi@donga.com