[{"report_no":"2278","report_type_name":"Issue Papers","img_src":"\/kcmifile\/report_data\/2278\/reportpic_2278.jpg","report_title":"International Comparison of Director Qualification Requirements and Disclosure Regimes: Implications for South Korea","report_num":"[26-09]","author":"Research Fellow Jung, Soomin","pub_date":"Apr. 02, 2026","summary":"This study examines the current legal framework governing director qualification requirements and disclosure obligations in Korea and compares them with regulatory practices in major jurisdictions, including Japan, the United Kingdom, Australia, the United States, Hong Kong, and Singapore. While Korea formally bases both qualification requirements and disclosure duties in statute, the substantive level of regulation is considerably weaker than that of major foreign jurisdictions.\r\n\r\nA key institutional gap in Korea’s framework is that disqualification rules under the Commercial Act apply only to independent directors, while no statutory qualification criteria exist for inside directors. This asymmetry is unique among major jurisdictions, where disqualification rules—whether statutory or administrative—generally apply uniformly to all directors regardless of their board role. Although certain sector-specific statutes (e.g., the Act on Corporate Governance of Financial Companies, the Act on Aggravated Punishment of Specific Economic Crimes) impose additional limitations, their coverage is narrow and fragmented, leaving substantial regulatory blind spots.\r\n\r\nKorea’s disclosure regime for director nominees, introduced in 2020, also relies heavily on indirect and summary-level information, such as tax delinquency, statutory disqualification status, and employment history at insolvent firms. Unlike foreign regimes that require disclosure of specific factual information—including criminal convictions, bankruptcy and insolvency proceedings, regulatory sanctions, and civil judgments—Korea does not mandate disclosure of the underlying facts that investors need to evaluate risks associated with director candidates. As a result, shareholders’ ability to make informed decisions about board composition remains limited.\r\n\r\nIn contrast, major jurisdictions operate far more comprehensive and integrated regulatory frameworks. Japan, the United Kingdom, and Australia apply uniform qualification standards to all directors—regardless of whether they serve as inside or independent directors—and permit broad grounds for disqualification, including misconduct, insolvency-related violations, regulatory breaches, or deficiencies in integrity and competence. The United Kingdom’s Company Directors Disqualification Act (CDDA) enables courts and regulators to impose disqualification orders for up to fifteen years, reflecting the jurisdiction’s strong emphasis on safeguarding corporate governance and market integrity. Australia adopts a similarly stringent approach, allowing disqualification for up to twenty years in cases involving repeated violations or conduct demonstrating unfitness to serve as a director.\r\n\r\nFurthermore, jurisdictions such as Hong Kong, Singapore, the United States, and Australia require extensive disclosure of a director’s criminal, civil, insolvency-related, and regulatory histories at the time of appointment. These regimes emphasize fact-based transparency, mandating the disclosure of specific events—such as convictions, sanctions, bankruptcy proceedings, and regulatory investigations—rather than relying on summary indicators or categorical statements. As a result, investors in these markets are equipped with sufficiently detailed information to evaluate the suitability and risk profile of director candidates, enabling more informed market-based assessments of board quality and governance risks.\r\n\r\nBased on these findings, this study suggests that Korea should pursue a two-track reform strategy. First, in the short term, Korea should strengthen its disclosure regime by expanding the scope of required information to include criminal, civil, administrative, and insolvency-related histories, and by shifting from a binary “yes\/no” reporting structure to one that provides factual context necessary for market-based evaluation.\r\n\r\nSecond, in the medium to long term, Korea should consider harmonizing qualification criteria across inside and independent directors, addressing the current regulatory asymmetry and aligning domestic standards with global norms. Incorporating foreign disqualification records or insolvency-related sanctions into Korean qualification assessments may also enhance consistency and regulatory effectiveness.\r\n\r\nUltimately, a more comprehensive qualification and disclosure framework would improve investor protection, strengthen market confidence, and enhance the integrity and accountability of corporate boards in Korea.","content":"","report_pdf_download_link":"\/common\/downloadw?fid=28838&fgu=002002&fty=004003","report_pdf_preview_link":"\/flexer\/view?fid=28838&fgu=002002&fty=004003","report_subject_name":"Capital Markets","displayset":"","tag_list":[{"tag_title":"Director qualification"},{"tag_title":"Fit and proper"}]},{"report_no":"2276","report_type_name":"Research Papers","img_src":"\/kcmifile\/report_data\/2276\/reportpic_2276.jpg","report_title":"The Effects of Mandatory Corporate Governance Report Disclosure and Its Policy Implications","report_num":"[26-05]","author":"Research Fellow Lim, Nayeon","pub_date":"Mar. 26, 2026","summary":"Korea has gradually mandated corporate governance reporting by firm size since 2019 and will extend it to all KOSPI-listed companies by 2026. Using panel data on all non-financial KOSPI firms from 2017–2024, this study estimates the causal effects of mandatory disclosure on governance quality and firm value. Employing Staggered Difference-in-Differences and Regression Discontinuity designs, I find that mandatory disclosure raised overall governance scores—especially in shareholder rights and audit practices—yet had no significant impact on board governance or firm value. \r\n\r\nThese findings suggest that increases in governance scores were either too small or limited to easily adjusted quantitative and formal aspects, failing to bring substantive governance reform or enhance firm value. Even with higher compliance rates, without qualitative improvements in management practices or decision-making, disclosure risks remaining a mere “box-ticking” exercise with little impact on firm value. Korea’s persistently low rankings in qualitative governance assessments and the gap between formal compliance and actual governance improvements support this view. In particular, insufficient progress in board governance may have constrained the improvement of firm value. Numerous prior studies document a positive link between board effectiveness and firm value, and our analysis likewise shows that firms with rising board scores after mandatory disclosure experienced higher firm value. These results suggest that difficult-to-reform board elements may have remained unchanged while only easier, more formal indicators improved.\r\n\r\nTo ensure that disclosure translates into genuine governance reform and firm value improvement, policy should (i) refine and, where needed, add core indicators to capture substantive improvements and (ii) strengthen disclosure practices—requiring fuller explanations of both compliance and non-compliance, enhancing oversight, and integrating governance reports with business and sustainability reports for more effective information provision.","content":"","report_pdf_download_link":"\/common\/downloadw?fid=28827&fgu=002002&fty=004003","report_pdf_preview_link":"\/flexer\/view?fid=28827&fgu=002002&fty=004003","report_subject_name":"Capital Markets","displayset":""},{"report_no":"2265","report_type_name":"Issue Papers","img_src":"\/kcmifile\/report_data\/2265\/reportpic_2265.jpg","report_title":"Target Date Funds in Korea: Trends, Performance, and Policy Implications","report_num":"[26-08]","author":"Research Fellow Hong, Wonku","pub_date":"Mar. 05, 2026","summary":"The Korean Target Date Fund (TDF) market has expanded substantially over the past decade, growing from KRW 67.2 billion in 2016 to KRW 16.6 trillion in 2024. The majority of TDF assets are held within retirement pension accounts, with Defined Contribution (DC) plans and Individual Retirement Pensions (IRP) serving as the primary channels of utilization. This development suggests that TDFs have played a meaningful role in retirement asset management in Korea, particularly as a structured investment option for long-term savers.\r\n \r\nDespite this expansion, the introduction of the Default Investment Option (DIO) system in July 2023 has had a limited impact on increasing TDF utilization to date. Structural features of the current system—such as the inclusion of a large share of principal-protected products and the requirement that participants actively select default options—have constrained the automatic allocation function that default arrangements are intended to provide. At the same time, the competitive landscape of retirement asset management has evolved rapidly, with exchange-traded funds (ETFs), robo-advisors, and industry-wide retirement pension funds emerging as alternative investment vehicles.\r\n \r\nAn empirical analysis of TDF performance reveals several notable characteristics. First, risk exposure and return profiles vary systematically across target dates, reflecting differences in asset allocation paths over the investment horizon. Second, even among TDFs with the same target date, performance dispersion and persistence are observed, indicating meaningful variation in investment strategies across asset managers. These findings suggest that competition and differentiation among TDF providers are actively shaping market outcomes, rather than TDFs operating as a homogeneous product category.\r\n \r\nIn terms of costs, TDF expense ratios are generally lower than those of traditional mutual funds but remain higher than those of ETFs and other low-cost alternatives. Moreover, expense ratios tend to increase with longer target horizons, reflecting structural features of TDF design. Importantly, the relationship between costs and performance is not uniform: higher-cost TDFs do not necessarily underperform lower-cost funds, underscoring the need to evaluate fees in conjunction with investment strategy and outcomes rather than in isolation.\r\n \r\nOverall, the findings indicate that the key policy issue is not whether TDFs should continue to grow, but under what institutional and market conditions they can function effectively as an automatic asset allocation tool within the retirement pension system. Improvements in the design and objectives of the default investment framework, greater transparency in cost structures, enhanced comparative disclosure, and clearer evaluation of performance relative to risk are essential to strengthening the role TDFs can play. Within a competitive retirement investment environment, TDFs represent one of several viable options for supporting long-term, life-cycle–based asset allocation, provided that the surrounding regulatory and institutional conditions are appropriately aligned.","content":"","report_pdf_download_link":"\/common\/downloadw?fid=28777&fgu=002002&fty=004003","report_pdf_preview_link":"\/flexer\/view?fid=28777&fgu=002002&fty=004003","report_subject_name":"Asset Management\/Pension","displayset":"","tag_list":[{"tag_title":"Pension TDF"}]},{"report_no":"2263","report_type_name":"Issue Papers","img_src":"\/kcmifile\/report_data\/2263\/reportpic_2263.jpg","report_title":"Cross-border Crypto Asset Transactions: Trend and Implications","report_num":"[26-07]","author":"Senior Research Fellow Kim, Hansoo and others","pub_date":"Feb. 26, 2026","summary":"Cross-border transactions in blockchain-based cryptoassets are rapidly expanding in ways that complement or potentially substitute traditional financial infrastructure. According to IMF estimates, the volume of cross-border cryptoasset transactions reached approximately USD 2.5 trillion as of 2024. After a period of rapid expansion in 2021 followed by a subsequent correction, cross-border activity has entered a renewed growth phase led primarily by stablecoins. In particular, recent cross-border transactions have moved beyond investment-driven flows centered on store-of-value cryptoassets, with an increasing share of activity reflecting actual use cases such as payments and remittances conducted via stablecoins.\r\n\r\nEmpirical evidence and the existing literature suggest that store-of-value cryptoassets are highly sensitive to the global financial cycle and tend to behave as typical risk assets, whereas stablecoins and small-value cryptoasset transactions are more closely linked to real-economy factors such as remittance costs, exchange rate volatility, and the intensity of capital controls. Moreover, in some jurisdictions, stablecoins have been observed to function as de facto substitutes for foreign currency or as channels for regulatory circumvention in cross-border capital movements. At the same time, discussions surrounding wholesale CBDC–tokenised deposit–based settlement architectures, such as the BIS’s Project Agora, indicate that international coordination efforts to integrate private-sector innovation into the formal payment system are gaining momentum.\r\n\r\nThese developments point to a gradual shift toward a more layered and networked structure in the international monetary and foreign exchange system. For Korea, the growing use of stablecoins and on-chain cross-border transactions raises important policy challenges, including ensuring consistency within the existing foreign exchange and capital account regulatory framework, enhancing real-time monitoring capabilities, modernising domestic payment infrastructure through tokenised deposits and CBDC-based systems, and engaging strategically in international discussions on payment and settlement standards. Accordingly, Korea needs to move beyond a narrow focus on whether to regulate digital assets and instead formulate policy from a broader perspective that redefines the role of the won and domestic financial institutions within an evolving international payment environment shaped by digital liquidity.","content":"","report_pdf_download_link":"\/common\/downloadw?fid=28755&fgu=002002&fty=004003","report_pdf_preview_link":"\/flexer\/view?fid=28755&fgu=002002&fty=004003","report_subject_name":"Macrofinance","displayset":"","tag_list":[{"tag_title":"Cross-border crypto flows"},{"tag_title":"Global capital flows"},{"tag_title":"Digital payments infrastructure"},{"tag_title":"Global financial order"}]}]