Certified Director System Expected to Be Introduced as Early as 2005

The system of ‘Certified Directors’ will be introduced to the nation as early as 2005.

This is a system to certify the quality and ability of directors such as CPAs. The Korean Directors’ Association, with Chairman Lee Hun-jae, former Finance and Economy Minister, is pushing ahead with the introduction of the new system.

“Every director is required to be equipped with independence and professionalism as well as professional knowledge in order to improve corporate governance and normalize the board of directors,” said Vice Chairman Kim Il-sup (Vice president of School of Management at Ewha Woman’s University) at a seminar in Daejon Saturday.

“For a director to secure independence regardless of the company’s owner or CEO, there should be active human resources for directors and increased opportunities for reappointment,” Kim added. “If the system takes root, it is expected to serve as a human resource for selecting and reappointing in- and outside directors.”

He also said that a certificate will be given to a qualified director.

A qualified director should be equipped with experience, moral integrity, completion of a course of study, and knowledge. Most of all, moral integrity throughout one’s career and capabilities as a director are particularly important for the position.

“To that end, we will should have discussion with the government to come up with standards of qualification,” the vice chairman added. “If the government is unwilling to take part in the process, we will put the system in place on our own.”

Kim claimed that Britain and Australia have been applying the certified director system since the second half of last year. “We are actively considering a plan to develop the system into an international one in connection with them,” he added.

Seung-Ho Huh tigera@donga.com