Compliance management

A company that fails to build a proper compliance management framework can see liability extend to the criminal responsibility of its executives and employees.

In recent years, courts have increasingly held the representative director and officers, as the parties with genuine decision-making authority, directly criminally liable, which makes building an internal control framework all the more important.

In particular, where a company's internal control failure is confirmed, the joint penalty provision may also impose criminal liability on the company itself.

For this reason, compliance management is now seen not as a mere response to regulation but as a core management strategy for a company's sustainability.

Large corporations and financial institutions sometimes run a separate compliance organization. Its main roles are as follows.

• Establishing internal control policy
• Checking compliance with laws and regulations
• Internal audit
• Risk management
• Operating an internal reporting system

This allows a company to manage its legal risks in advance.

Compliance management under the Monopoly Regulation and Fair Trade Act is a highly important area of corporate activity. The leading types of regulation are as follows.

• Collusion
• Unfair trade practices
• Improper support
• Violations of the Fair Transactions in Subcontracting Act
• Violations of the Act on Fair Transactions in Large Retail Business

A company can build its internal control framework through a fair trade compliance program (CP).

The Improper Solicitation and Graft Act is a leading law that strengthens corporate anti-corruption compliance.

Global companies should also consider the following foreign anti-corruption regimes.

• The U.S. FCPA
• UK Bribery Act

These laws strictly regulate bribery, improper solicitation, and corrupt conduct by a company's officers and employees.

Compliance relating to personal information has become one of the leading regulatory concerns in recent years.

The governing statutes include the following.

• Personal Information Protection Act
• Network Act
• Credit Information Act

A data breach may give rise to the following sanctions.

• Penalty surcharge
• Administrative fine
• Damages
• Criminal punishment

As ESG management expands, environmental regulation has also become a significant area of compliance management. The principal statutes include the following.

• Environmental Crimes Control Act
• Clean Air Conservation Act
• Wastes Control Act

A breach of environmental regulation can also have a considerable effect on a company's reputation and its ability to attract investment.

When unlawful conduct occurs, or is suspected, within a company, an internal investigation is called for.

An internal investigation generally proceeds through the following steps.

1. Receipt of a report
2. Investigation of the facts
3. Securing of evidence
4. Legal review
5. Remedial measures

In recent practice, digital forensics is used to analyze email, messaging, and internal data, which improves the accuracy of an investigation.

Responding to investigations by the following authorities is equally important.

• Fair Trade Commission investigations
• Financial Supervisory Service examinations
• Prosecutorial investigations

Throughout this process, a company needs to respond promptly and strategically.

For compliance management to be effective, a company should put the following strategies in place.

• Establishing a framework of internal rules
• Conducting regular compliance reviews
• Providing training for officers and employees
• Building an internal reporting system
• Preparing a crisis response manual

With such a framework in place, a company can manage its legal and reputational risks at the same time.