Lawmakers of the National Assembly’s Legislation and Judiciary Committee have drawn ire from listed companies by requiring them to hire at least one “compliance support officer” starting April next year.
The new regulation was put into the amended Commercial Code despite opposition from the corporate community. The revision bill passed the panel on March 11 and won approval on the floor the next day. It now awaits proclamation by the president.
The revised Commercial Code defines a compliance support officer as a legal expert who helps the company’s management abide by the law and reports any legal breach to its board of directors.
The lawmakers asserted this new system was necessary to make corporate management more transparent and efficient. But most listed companies already have their own compliance officers who are responsible for running their in-house compliance programs. In particular, financial companies are required by law to set up an internal control system and appoint a compliance officer in charge of it.
For this reason, listed companies view the new compliance support officer as redundant and suspect that the lawmakers had an ax to grind―to create jobs for the new lawyers to be turned out by law schools starting next year.
Early next year, law schools across the nation will churn out their graduates, totaling some 1,500 in number. Some of them will be appointed as prosecutors but most are likely to work as lawyers. The planned compliance support officer system will help them find a job.
The qualifications set for the new corporate post support the suspicions of listed companies. Eligible candidates must be lawyers, law professors with more than five years of teaching experience and people with sufficient legal knowledge and experience. Given that law professors are unlikely to apply for the three-year job, the new system can be seen as intended primarily for lawyers.
If the system is designed to create jobs for the graduates of law schools, as alleged by listed companies, it should be scrapped because it will only line the pockets of lawyers at the expense of companies. Compliance is a matter that can be left to the listed companies themselves.