ACT ON THE MANAGEMENT OF PUBLIC INSTITUTIONS

영문법령 불러오는 중…

ACT ON THE MANAGEMENT OF PUBLIC INSTITUTIONS — 법갈피

Article 5(Classification of public institutions) #

(1) The Minister of Economy and Finance shall designate a public institution in accordance with the following classification: <Amended on Mar. 31, 2020; Oct. 1, 2025>

1. Public enterprises and quasi-governmental institutions: Public institutions whose prescribed number of employees, revenue, and asset size meet the criteria prescribed by Presidential Decree;

2. Non-classified public institutions: Institutions other than those falling under subparagraph 1.

(2) Notwithstanding paragraph (1)1, the Minister of Economy and Finance may designate public institutions that meet the criteria prescribed by Presidential Decree, such as those in which accountable management systems are established in accordance with other statutes or those for which it is highly needed to secure independence and autonomy in the operation of institutions, as non-classified public institutions. <Added on Mar. 31, 2020; Oct. 1, 2025>

(3) In designating a public enterprise and a quasi-governmental institution under paragraph (1), the Minister of Economy and Finance shall designate an institution whose self-generating revenue out of the total revenue reaches or exceeds the criteria prescribed by Presidential Decree as a public enterprise, and shall designate a public institution that is not a public enterprise, as a quasi-governmental institution. <Amended on Feb. 29, 2008; Mar. 31, 2020; Oct. 1, 2025>

(4) The Minister of Economy and Finance shall subdivide public enterprises and quasi-governmental institutions under paragraphs (1) and (3) into the following categories to designate them accordingly: <Amended on Feb. 29, 2008; Mar. 31, 2020; Jun. 9, 2020; Oct. 1, 2025>

1. Public enterprises:

a. Market-type public enterprises: Public enterprises whose asset size and self-generating revenue out of the total revenue reaches or exceeds the criteria prescribed by Presidential Decree;

b. Quasi-market-type public enterprises: Public enterprises other than market-type public enterprises;

2. Quasi-governmental institutions:

a. Fund-management-type quasi-governmental institutions: Quasi-governmental institutions to which the management of a fund is assigned or commissioned pursuant to the National Finance Act;

b. Commissioned-service-type quasi-governmental institutions: Quasi-governmental institutions other than fund-management-type quasi-governmental institutions.

(5) Where the Minister of Economy and Finance designates other public institutions in accordance with paragraphs (1) and (2), he or she may subdivide non-classified public institutions to designate some of the institutions as institutions aimed at research and development, taking into account each institution's characters, business characteristics, etc. <Amended on Feb. 29, 2008; Mar. 27, 2018; Mar. 31, 2020; Oct. 1, 2025>

(6) Detailed criteria and methods for calculating the self-generating revenue and the total revenue under paragraphs (3) and (4), and the kinds of non-classified public institutions and detailed criteria for classification thereof under paragraph (5) shall be prescribed by Presidential Decree. <Amended on Mar. 27, 2018; Mar. 31, 2020>

Article 6(Procedures for designation of public institutions) #

(1) The Minister of Economy and Finance shall newly designate public institutions, cancel the designation thereof, or designate such public institutions following changes in the classification, within 1 month after the commencement of each fiscal year; provided, the Minister of Economy and Finance may newly designate public institutions, cancel the designation thereof, or designate such institutions following changes in the classification, in accordance with the following classification even in the middle of a fiscal year: <Amended on Dec. 29, 2009; Oct. 1, 2025>

1. Where an institution falling under each subparagraph of Article 4(1) is newly established: New designation;

2. Where an institution designated as a public institution is no longer subject to this Act due to privatization, consolidation, discontinuation, or split of the institution or due to amendments, repeal, etc. of relevant statutes or where it becomes necessary to change the designation thereof: Cancellation of designation or designation following a change in the classification.

(2) Where the Minister of Economy and Finance intends to designate a new public enterprise, quasi-governmental institution, or non-classified public institution, or to cancel or change such designation under paragraph (1), he or she shall consult with an administrative agency having control over the affairs of such public enterprise, quasi-governmental institution, or non-classified public institution (hereinafter referred to as "competent agency") in accordance with relevant statutes, and then shall refer it to the Ownership Steering Committee under Article 8 for deliberation and resolution. <Amended on Feb. 29, 2008; Oct. 1, 2025>

(3) When designating a new public enterprise, quasi-governmental institution, or non-classified institution, or canceling or changing such designation under paragraphs (1) and (2), the Minister of Economy and Finance shall make a public notification thereof. In such cases, if deemed necessary, existing public enterprises, quasi-governmental institutions, and non-classified public institutions may be included in such public notice. <Amended on Feb. 29, 2008; Oct. 1, 2025>

(4) Matters necessary for the procedures, etc. for the designation (including changes in designation) of public enterprises, quasi-governmental institutions, and non-classified public institutions, the cancellation of such designation, and the public notification shall be prescribed by Presidential Decree.

Article 8(Establishment of ownership Steering Committee) #

The Ownership Steering Committee (hereinafter referred to as the "Steering Committee") shall be established under the jurisdiction of the Minister of Economy and Finance for deliberation and resolution on the following matters concerning the management of public institutions: <Amended on Feb. 29, 2008; Dec. 31, 2008: Dec. 29, 2009; Mar. 22, 2016; Mar. 27, 2018; Jun. 9, 2020; Oct. 1, 2025>

1. Designation of public enterprises or quasi-governmental institutions, and of non-classified public institutions, and cancellation and change of such designation pursuant to Articles 4 through 6;

2. Examination on the establishment of a new institution pursuant to Article 7;

3. Publication on the management of public institutions pursuant to Article 11(1)16;

4. Personnel action, etc. based on a violation of the duty of publication, etc. pursuant to Article 12(3);

5. Adjustment of functions, etc. of public institutions under Article 14;

6. Assistance in innovation, etc. of public institutions under Article 15;

7. Appointment of the non-standing senior directors of market-type public enterprises and quasi-market-type public enterprises pursuant to the proviso to Article 21(2);

8. Appointment, etc. of executive officers of public enterprises and quasi-governmental institutions pursuant to Articles 25 and 26;

9. Guidelines for remuneration provided for in Article 33;

10. Removal, proposal to removal, etc., of executive officers of public enterprises and quasi-governmental institutions pursuant to Article 35(2), the proviso to paragraph (3) of Article 35, and Article 52-3(3);

11. Evaluation, etc. of performance of duties of non-standing directors and auditors pursuant to Article 36;

12. Evaluation, etc. of management performance of public enterprises and quasi-governmental institutions pursuant to Article 48;

13. Guidelines for management of public institutions and quasi-governmental institutions provided for in Article 50;

14. Monitoring of the appropriateness of supervision over public enterprises and quasi-governmental institutions and improvement of such supervision pursuant to Article 51(4);

15. Disclosure of a name list under Article 52-4(1);

16. Revocation of passing an examination, etc. under Article 52-5(1);

17. Other matters prescribed by Presidential Decree, concerning the management of public institutions.

Article 9(Composition of Steering Committee) #

1. One Vice Minister-level public official of the Office for Government Policy Coordination as nominated by the Minister of the Office for Government Policy Coordination;

2. Vice Minister, Deputy Administrator, or an equivalent public official of the related administrative agency prescribed by Presidential Decree;

3. Vice Minister, Deputy Administrator, or an equivalent public official of the competent agency who does not fall under subparagraph 2;

4. Not more than 11 persons commissioned by the President on the recommendation of the Minister of Economy and Finance, from among persons in various fields including law, economy, press, academia, labor, etc. who have extensive knowledge of and experience in the area of operation and business administration of public institutions as well as good reputation for impartiality.

(2) The term of office of the committee members under the provisions of paragraph (1)4 shall be three years, and they may be consecutively appointed.

(3) The committee members under the provisions of paragraph (1)4 shall perform their duties faithfully following their conscience for the establishment of self-controlling and accountable management system in public institutions and the enhancement of the efficiency in their management.

(4) A committee member under the provisions of paragraph (1)4 may be dismissed if he or she falls under any of the following subparagraphs:

1. If he or she is unable to perform his or her duties due to physical or mental disability;

2. If he or she is found incompetent to his or her office on the ground of neglect of his or her duties, indecent manner, or otherwise;

3. If he or she is indicted in a criminal case in connection with his or her duties.

(5) The committee chairperson may recommend the President to dismiss a committee member under the provisions of paragraph (1)4, if the committee member falls under any of the subparagraphs of paragraph (4); provided, the committee chairperson shall compulsorily recommend the President to dismiss a committee member who falls under paragraph (4)1.

(6) Matters necessary for the composition of the Steering Committee shall be prescribed by Presidential Decree.

Article 11(Public disclosure of management performance) #

(1) A public institution shall disclose the following matters to the public; provided, if any of the following matters is information subject to non-disclosure under Article 9 of the Official Information Disclosure Act or the head of the competent agency has consulted with the Minister of Economy and Finance thereon because it is deemed necessary for national security, the relevant matters may be excluded from disclosure: <Amended on Feb. 29, 2008; Dec. 31, 2008: Dec. 29, 2009; Mar. 22, 2016; Mar. 27, 2018; Dec. 31, 2018; Jun. 9, 2020; Oct. 1, 2025>

1. Business goals, budget, and management plan;

2. Statements on settlement of accounts;

3. Current status of executive officers and operating personnel (including the gender of executive officers, the gender and wages of executive officers and employees, the types of employment of workers, and the rate of non-regular workers converted into regular workers);

4. Budget for personnel expenses and fringe benefits, and status of execution thereof (the budget for different types of allowances shall be disclosed by type);

5. Current status of the details of transactions and the exchange of human resources with subsidiaries, invested companies, and second-tier invested companies (including the employment status of executive officers and employees resigned or retired during the recent five years in subsidiaries, invested companies and second-tier invested companies);

6. Results of a survey on customer satisfaction level conducted pursuant to Article 13(2);

7. Results of audit and appraisal of the actual performance of duties of audit commissioners of the audit committee provided for in Article 36(1);

8. Results of business performance evaluation conducted pursuant to Article 48 (limited to public enterprises and quasi-governmental institutions);

9. Articles of association, the corporate bond register, internal regulations such as guidelines and established rules, minutes of directors' meeting;

10. Audit report prepared by the auditor or the audit committee (including matters pointed out, matters requesting disposition and a plan of measures for them);

11. Results of audit on public institutions by the heads of the competent agencies (including matters pointed out, matters requesting disposition and a plan of measures for them);

12. Details of the judgment on the liability for damages or the request for disciplinary action, correction, improvement, etc. pursuant to Articles 31 through 34-2 of the Board of Audit and Inspection Act or the request for correction pursuant to Article 16 of the Act on the Inspection and Investigation of State Administration, if any, and the measures taken by the public institution, etc. for such judgment or demand;

13. Current status of operation of the disciplinary system, including information about the disciplinary system and disciplinary action taken;

14. Current status of lawsuits, legal advice, attorneys and legal advisers;

15. Medium- and long-term financial management plan of each institution among medium- and long-term financial management plans submitted to the National Assembly pursuant to Article 9-2 of the National Finance Act;

16. Other important matters concerning the management of the public institution, as requested by the Minister of Economy and Finance to publish after deliberation and resolution by the Steering Committee.

(2) A public institution shall disclose the matters specified in each subparagraph of paragraph (1) to the public on its website, and shall keep necessary documents at its offices.

(3) Upon receipt of a request for inspection or a copy of the matters disclosed referred to in paragraph (1), a public institution shall allow the applicant to inspect them or deliver him or her a copy or reproduced material. In such cases, Article 17 of the Official Information Disclosure Act shall apply mutatis mutandis to the defrayment of expenses incurred therefrom.

(4) Matters necessary for the public disclosure of management performance of public institutions shall be prescribed by Presidential Decree.

Article 17(Establishment and functions of board of directors) #

(1) Every public enterprise and quasi-governmental institution shall have the board of directors for deliberation and resolution on the following matters: <Amended on May 17, 2010>

1. Business goals, budget, management plan, and mid-and long-term financial management plan;

2. Use of reserve fund and carry-over of budget;

3. Settlement of accounts;

4. Acquisition and disposition of fundamental assets;

5. Borrowing of long-term loans, issuance of corporate bonds, and repayment plan for such loans or bonds;

6. Selling prices for products and services;

7. Appropriation of retained earnings;

8. Investment in and contribution to other corporation, etc.;

9. Guarantees for obligations of other corporation; provided, it shall exclude the guarantees for obligations provided by a public enterprise and quasi-governmental institution that engage in a guarantee business under the relevant Act in the course of executing its business;

10. Amendment of the articles of association;

11. Establishment and amendment of bylaws;

12. Remuneration for executive officers;

13. Matters that the head of the public enterprise or quasi-governmental institution (hereinafter referred to as "institution head") considers necessary to refer to the board of directors for deliberation and resolution;

14. Other matters considered necessary by the board of directors.

(2) The institution head shall report the following matters to the board of directors: <Amended on Jun. 9, 2020>

1. Matters pointed out at the inspection of state administration, the accounting audit conducted pursuant to Article 43(1), or the audit conducted by the Board of Audit and Inspection pursuant to Article 52, and the plan for measures to be taken for such matters and the results thereof;

2. Results of a collective agreement executed by the public enterprise or quasi-governmental institution and the estimated budget required for such an agreement (limited to a case where a collective agreement is entered into);

3. Other matters on which the board of directors demands the institution head to report.

(3) Where any other Act requires a public enterprise or quasi-governmental institution to have any organization in lieu of the board of directors to perform the functions referred to in paragraph (1) in providing for the establishment and management of the public enterprise or the quasi-governmental institution, such organization in whatsoever name shall be deemed to be the board of directors, while the members of such an organization shall be deemed to be the directors under this Act, to whom this Act shall apply.

Article 18(Composition) #

(1) The board of directors shall be comprised of not more than 15 directors including the institution head; provided, it may be comprised of not less than 15 directors if the institution falls under any of the following: <Amended on Jun. 9, 2020; Feb. 3, 2022>

1. A public enterprise or quasi-governmental institution having the general meeting of members, such as the general meeting of shareholders or the general meeting of investors, and established as a federation of local or trade institutions under any other Act;

2. Where the number of directors as of the time when it is designated as a public enterprise or quasi-governmental institution pursuant to Article 6 exceeds 15 persons; provided, the foregoing shall be applicable only for the period of time during which the term of incumbent directors as of the time of designation under the proviso to Article 28(1) is guaranteed;

3. Where the number of directors exceeds 15 persons as a consequence of appointment of non-standing directors under Article 25(4).

(2) The chairperson of the board of directors of a market-type public enterprise and quasi-market-type public enterprise, the asset size of which is not less than two trillion won shall become a non-standing senior director under Article 21; provided, one of the non-standing directors shall act as chairperson on behalf of the chairperson, as provided for in the articles of association, if the chairperson is unable to perform his or her duties due to unavoidable reasons. <Amended on Dec. 29, 2009>

(3) In applying paragraph (2), if no non-standing director exists at the time an institution is designated as a market-type public enterprise or quasi-market-type public enterprise pursuant to Article 6, the person prescribed by statutes at the time the institution is designated as a market-type public enterprise or a quasi-market-type public institution shall be the chairperson of the board of directors until non-standing directors are appointed under Article 25(4). <Amended on Dec. 29, 2009; Jun. 9, 2020; Feb. 3, 2022>

(4) The institution head shall become the chairperson of the board of directors of a quasi-market-type public enterprise, the asset size of which is less than two trillion won, or a quasi-governmental institution; provided, the concurrent holding of the office of the institution head and the office of the chairperson of the board of directors shall be prohibited, if there are provisions in any other Act that prohibit such concurrent holding of offices. <Amended on Dec. 29, 2009>

Article 24(Executive officers) #

(1) A public enterprise or quasi-governmental institution shall have directors, including the head of such enterprise or institution, and auditors; provided, where an audit committee is established pursuant to Article 20(2) and (3), no auditor shall be appointed.

(2) Directors shall be classified into standing and non-standing directors.

(3) The number of standing directors of a public enterprise, and the number of a quasi-governmental institution, the size of which meets or exceeds the criteria prescribed by Presidential Decree or which is prescribed by Presidential Decree in consideration of the special characteristics of business affairs of such institution, shall respectively be less than 1/2 of a fixed number of directors, including each head of such enterprise and institution; provided, where the fixed number of standing directors as at the time such enterprise and institution were designated respectively as a public enterprise and quasi-governmental institution pursuant to Article 6 equals or exceeds 1/2 of a fixed number of directors, including each head of such enterprise and institution, the fixed number of standing directors may equal or exceed 1/2 of the fixed number of directors, including each head of such enterprise and institution, while the terms of office of executive officers have been guaranteed pursuant to the proviso to Article 28(1). <Amended on Dec. 29, 2009; Jun. 9, 2020>

(4) The number of standing directors of any quasi-governmental institution other than those referred to in the main clause of paragraph (3) shall be less than 2/3 of a fixed number of directors, including the head of such institution; provided, where a fixed number of standing directors as at the time such institution was designated as a quasi-governmental institution pursuant to Article 6 equals or exceeds 2/3 of a fixed number of directors, including the head of such institution, the fixed number of standing directors may equal or exceed 2/3 of the number of directors, including the head of the institution, while the terms of office of executive officers have been guaranteed pursuant to the proviso to Article 28(1). <Added on Dec. 29, 2009>

(5) An auditor shall be a standing or non-standing member as prescribed by other statutes, or the articles of association. <Added on Dec. 29, 2009>

Article 25(Appointment or removal of executive officers of public enterprises) #

(1) The head of a public enterprise shall be appointed by the President on the recommendation of the head of the competent agency, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers as provided for in Article 29 (hereinafter referred to as the "Committee for Recommendation of Executive Officers"), and then be selected through deliberation and resolution by the Steering Committee; provided, the head of a public enterprise, the size of which is below the criteria prescribed by Presidential Decree, shall be appointed by the head of the competent agency, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers, and then selected through deliberation and resolution by the Steering Committee. <Amended on Jun. 9, 2020>

(2) Standing directors of a public enterprise shall be appointed by the head of the public enterprise; provided, a standing director who becomes an audit commissioner of the audit committee under Article 20(2) and (3) (hereinafter referred to as "standing audit commissioner") shall be appointed either by the President or the Minister of Economy and Finance in accordance with the procedures prescribed in paragraph (4). <Amended on Dec. 29, 2009; Oct. 1, 2025>

(3) Non-standing directors of a public enterprise shall be appointed by the Minister of Economy and Finance after deliberation and resolution by the Steering Committee from among the multiple candidates falling under the following who are recommended by the Committee for Recommendation of Executive Officers; in such cases, 1 person falling under subparagraph 2 shall be included: <Amended on Feb. 29, 2008; Jun. 9, 2020; Feb. 3, 2022; Oct. 1, 2025>

1. A person who has extensive knowledge of and experience in management (excluding public officials who are not teachers of national or public schools);

2. A person who receives the recommendation of the representative of employees (referring to the representative of a labor union if there is a labor union organized by a majority of employees; hereinafter the same shall apply) or obtains the consent of a majority of employees from among the employees belonging to the relevant institution who has worked for the institution at least three years (referring to the employees under Article 2(1)1 of the Labor Standards Act; hereinafter the same shall apply).

(4) A public enterprise that has no non-standing director as at the time of designation referred to in Article 6 shall appoint at least 2 non-standing directors within 3 months from the date of designation pursuant to paragraph (3). <Added on Feb. 3, 2022>

(5) The auditor of a public enterprise shall be appointed by the President on the recommendation of the Minister of Economy and Finance, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers, and then be selected through the deliberation and resolution by the Steering Committee; provided, the auditor of a public enterprise, the size of which is below the criteria prescribed by Presidential Decree shall be appointed by the Minister of Economy and Finance, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers, and then be selected through deliberation and resolution by the Steering Committee. <Amended on Feb. 29, 2008; Jun. 9, 2020; Feb. 3, 2022; Oct. 1, 2025>

(6) The head of a public enterprise shall not be removed earlier than the expiry of his or her term unless he or she is removed by his or her appointing authority under Article 22(1), 35(3), 48(4) or (8), or 52-3(3) or unless there is any ground for removal specified in the articles of association. <Amended on Dec. 31, 2008; Mar. 25, 2009; Mar. 27, 2018; Feb. 3, 2022>

(7) Procedures for the recommendation and consent of non-standing directors under paragraph (3)2 and other necessary matters shall be prescribed by Presidential Decree. <Added on Feb. 3, 2022>

Article 26(Appointment or removal of executive officers of quasi-governmental institutions) #

(1) The head of a quasi-governmental institution shall be appointed by the head of the competent agency, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers; provided, the head of a quasi-governmental institution, the size of which meets or exceeds the criteria prescribed by Presidential Decree or which is specified by Presidential Decree considering the peculiarities of its business affairs, shall be appointed by President on the recommendation of the head of the competent agency, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers. <Amended on Jun. 9, 2020>

(2) Standing directors of a quasi-governmental institution shall be appointed by the head of the quasi-governmental institution, and, where other statutes or regulations require to establish a separate recommendation committee for standing directors, the provisions of such statutes shall govern the recommendation of standing directors; provided, a standing audit commissioner shall be appointed either by the President or the Minister of Economy and Finance in accordance with the procedures prescribed in paragraph (4). <Amended on Dec. 29, 2009; Oct. 1, 2025>

(3) Non-standing directors of a quasi-governmental institution (excluding those appointed as ex officio non-standing directors pursuant to other statutes or the articles of association of the quasi-governmental institution; hereinafter the same shall apply in this paragraph) shall be appointed by the head of the competent agency, while the non-standing directors of a quasi-governmental institution, the size of which meets or exceeds the criteria prescribed by Presidential Decree or which is prescribed by Presidential Decree considering the special characteristics of its business affairs, shall be appointed by the head of the competent agency from among multiple candidates recommended by the Committee for Recommendation of Executive Officers. In such cases, from among employees belonging to the relevant institution who have worked for the institution at least three years, one person who receives recommendation of the representative of the employees or obtains the consent of a majority of the employees shall be included. <Amended on Dec. 29, 2009; Jun. 9, 2020; Feb. 3, 2022>

(4) Notwithstanding paragraph (3), where other statutes or regulations otherwise prescribe recommendation procedures for non-standing directors of the relevant quasi-governmental institution, the provisions of such statutes or regulations shall apply to the recommendation of non-standing directors. <Added on Feb. 3, 2022>

(5) The auditor of a quasi-governmental institution shall be appointed by the Minister of Economy and Finance, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers, and shall be selected through deliberation and resolution by the Steering Committee; provided, the auditor of a quasi-governmental institution shall, if its size exceeds the criteria prescribed by Presidential Decree or if it is prescribed by Presidential Decree considering the peculiarities of its business affairs, be appointed by the President on the recommendation of the Minister of Economy and Finance, from among multiple candidates recommended by the Committee for Recommendation of Executive Officers and then be selected through deliberation and resolution by the Steering Committee. <Amended on Feb. 29, 2008; Jun. 9, 2020; Feb. 3, 2022; Oct. 1, 2025>

(6) Article 25(6) shall apply mutatis mutandis to the guarantee of the term of office for the head of a quasi-governmental institution. In such cases, "head of a public enterprise" shall be construed as "head of a quasi-governmental institution." <Amended on Dec. 29, 2009; Feb. 3, 2022>

(7) Procedures for recommendation and consent of non-standing directors under the latter part of paragraph (3) and other necessary matters shall be prescribed by Presidential Decree. <Added on Feb. 3, 2022>

Article 28(Term of office) #

(1) The term of office of the institution head appointed pursuant to Article 25 and 26 shall be three years, and the term of office of directors and auditors shall be two years; provided, the directors incumbent as at the time the public institution is designated as a public enterprise or quasi-governmental institution pursuant to Article 6 shall be deemed to have been appointed pursuant to Article 25 and 26, and the relevant statutes, etc. in force as at the beginning of the terms of office of such directors shall apply to their terms.

(2) An executive officer of a public enterprise and quasi-governmental institution may be consecutively appointed to one-year terms. In such cases, his or her appointing authority shall decide whether to appoint an executive officer consecutively, considering the matters as categorized in the following subparagraphs: <Amended on Mar. 22, 2016>

1. Institution head: Evaluation results of management performance as provided for in Article 48;

2. Standing director: Results of the evaluation of the standing director’s performance under the performance agreement executed pursuant to Article 31(7) and results of performance of other duties;

3. Non-standing director and auditor: Results from an evaluation of performance of duties provided for in Article 36 and results of performance of other duties.

(3) Where an executive officer of a public enterprise or quasi-governmental institution is consecutively appointed pursuant to paragraph (2), such an appointment does not require the recommendation process conducted by the Committee for Recommendation of Executive Officers.

(4) Where an institution head is appointed for a consecutive term pursuant to paragraph (2), an agreement shall be made again in compliance with Article 31(3). In such cases, a negotiation with the Committee for Recommendation of Executive Officers provided in Article 31(2) is not required.

(5) Executive officers shall perform their duties even after expiration of their terms until their successors are appointed.

Article 29(Committee for Recommendation of Executive Officers) #

(1) Every public enterprise and quasi-governmental institution shall have the Committee for Recommendation of Executive Officers for recommending candidates for executive officers of the public enterprise or quasi-governmental institution pursuant to Article 25 and 26 and for negotiating the matters concerning the draft agreement with candidates for the institution head pursuant to Article 31(2). <Amended on Dec. 29, 2009>

(2) The Committee for Recommendation of Executive Officers shall be comprised of non-standing directors of the public enterprise or quasi-governmental institution and the members appointed by the board of directors.

(3) Neither executive officers and employees of a public enterprise or quasi-governmental institution nor public officials may become members of the Committee for Recommendation of Executive Officers; provided, the foregoing shall not apply to non-standing directors of the public enterprise or quasi-governmental institution, teaching staff under the Educational Officials Act, and public officials of the competent agency for the quasi-governmental institution.

(4) The fixed number of the members appointed by the board of directors shall be less than 1/2 of the fixed number of the members of the Committee for Recommendation of Executive Officers; provided, if only one non-standing director exists at the time the Committee for Recommendation of Executive Officers is established, the fixed number of the members appointed by the board of directors may be 1/2 of the fixed number of the members of the Committee for Recommendation of Executive Officers. <Amended on Dec. 29, 2009>

(5) The chairperson of the Committee for Recommendation of Executive Officers shall be elected by the committee members among non-standing directors of the public enterprise or quasi-governmental institution, who are also the committee members.

(6) If there is no non-standing director in a public enterprise or a quasi-governmental institution at the time when the Committee for Recommendation of Executive Officers is established, the committee shall be comprised of outside members appointed by the board of directors, and the chairperson of the committee shall be elected by and among the outside members.

(7) The Committee for Recommendation of Executive Officers shall prepare and maintain a set of minutes that describe all the matters discussed and resolved at each meeting, and make them available for inspection by the public; provided, the Committee may not allow public access to such minutes, if the case falls within any subparagraph of Article 9(1) of the Official Information Disclosure Act. <Added on Dec. 27, 2016>

(8) Matters necessary for the composition, operation, deadline for recommendation of candidates, etc. of the Committee for Recommendation of Executive Officers shall be prescribed by Presidential Decree. <Amended on Dec. 27, 2016; Mar. 31, 2020>

Article 30(Criteria for recommendation of candidates for executive officers) #

(1) The Committee for Recommendation of Executive Officers shall recommend a person, as a candidate for the institution head, who has good knowledge and experience relating to corporate management and business affairs of the public enterprise or quasi-governmental institution and competent ability for Chief Executive Officer.

(2) The Committee for Recommendation of Executive Officers shall recommend a person, as a candidate for a director other than the institution head and an auditor, who has good knowledge, experience, and competent ability necessary for performing his or her duties as a director or auditor of the public enterprise or quasi-governmental institution; provided, in cases of an auditor (including a standing audit commissioner), it shall recommend persons who meet any of the following qualifications: <Amended on Mar. 31, 2020; Jun. 9, 2020>

1. A person qualified as a certified public accountant or attorney-at-law, who has engaged in the affairs related to such qualification for at least three years;

2. A person who has served as an assistant professor or in a higher position for at least three years in the field directly related to the affairs, such as audit, investigation, and legal affairs, budget and accounting, or inquiry, planning, and evaluation (hereinafter referred to as "audit-related affairs"), at schools under subparagraphs 1 through 5 of Article 2 of the Higher Education Act;

3. A person who has been in charge of audit-related affairs for at least three years in a public institution, a stock-listed corporation under Article 9(15)3 of the Financial Investment Services and Capital Markets Act, or a research institute and who has career experience prescribed by Presidential Decree;

4. A person who has been in charge of audit-related affairs in the State or local governments for at least three years and who has served as a public official in the position prescribed by Presidential Decree;

5. Other persons with expertise based on the affairs administered by the relevant institutions, who have qualifications prescribed by Presidential Decree.

(3) In cases of recommending candidates for executive officers pursuant to paragraphs (1) and (2), the Committee for Recommendation of Executive Officers shall provide for the eligibility criteria for executive officers in consideration of the specialties and requirements of the corresponding enterprise or institution, and recommend candidates meeting such criteria. In this case, any particulars that would be necessary for providing for the eligibility criteria shall be determined based on the management guidelines established under Article 50. <Added on Dec. 27, 2016>

(4) In order to recommend a candidate for an executive officer, the Committee for Recommendation of Executive Officers may invite the general public for the candidacy, as prescribed by Presidential Decree. <Amended on Dec. 27, 2016; Jun. 9, 2020>

Article 31(Agreement with institution head) #

(1) In relation to the appointment of the institution head as provided for in Article 25(1) and 26(1), the board of directors shall prepare a draft agreement that contains the specific business goals that the institution head shall achieve during his or her term of office, the performance-based compensation, etc., and shall deliver the draft to the Committee for Recommendation of Executive Officers. In such cases, the incumbent institution head shall not participate in the directors' meeting for preparing such a draft agreement.

(2) In receipt of the draft agreement delivered under paragraph (1), the Committee for Recommendation of Executive Officers shall negotiate the terms and conditions of the agreement with the person whom the committee considers recommending as candidate for the institution head, and shall inform the head of the competent agency of the result. In such cases, the Committee for Recommendation of Executive Officers may partially modify the details, terms, and conditions of the draft agreement, if necessary for negotiation with the candidates for the institution head. <Amended on Jun. 9, 2020>

(3) The head of the competent agency shall sign an agreement with the person to be appointed as the institution head in accordance with the draft agreement as negotiated under paragraph (2), but an agreement with the head of a public enterprise shall be signed after prior consultation with the Minister of Economy and Finance. In such cases, the head of the competent agency may negotiate the terms and conditions of the agreement with the person to be appointed as the institution head to determine the terms and conditions differently from those of the draft agreement prepared under paragraphs (1) and (2). <Amended on Feb. 29, 2008; Oct. 1, 2025>

(4) The institution head and the head of the competent agency may modify the details, terms, or conditions of the agreement through negotiations when unavoidable circumstances occur after the agreement is signed under paragraph (3); provided, the head of the competent agency shall consult with the Minister of Economy and Finance in advance when he or she intends to agree with the head of a public enterprise to modify the details, terms, or conditions of the agreement. <Amended on Feb. 29, 2008; Oct. 1, 2025>

(5) The head of the competent agency shall sign the agreement as negotiated under paragraph (3) with the institution head incumbent as at the time the institution is designated as a public enterprise or quasi-governmental institution (excluding the case of change of designation) pursuant to Article 6, within three months after such designation; provided, the agreement as negotiated under paragraph (3) shall not be singed if the remaining term of office is less than six months. <Amended on Jun. 9, 2020>

(6) The Minister of Economy and Finance or the head of the competent agency may evaluate the performance of the head of a public enterprise or quasi-governmental institution at least once during his or her term of office based on the reports on the performance of the agreements under paragraph (3) or (4). <Added on Mar. 22, 2016; Oct. 1, 2025>

(7) The institution head may enter into a performance agreement with standing directors of the institution concerned (excluding a standing audit commissioner; hereinafter the same shall apply in this paragraph) and evaluate their performance under the performance agreement, and may remove any standing director if the results of evaluation of the standing director's performance show poor performance. <Amended on Dec. 29, 2009; Mar. 22, 2016>

Article 32(Duties of executive officers) #

(1) The institution head shall represent the public enterprise or quasi-governmental institution, have overall control over its business affairs, and take the responsibility for the management performance of the public enterprise or quasi-governmental institution.

(2) The institution head shall not represent the public enterprise or quasi-governmental institution with respect to a matter in which the public enterprise or quasi-governmental institution and he or she have conflicting interests. In such cases, the auditor or the audit committee shall represent the public enterprise or quasi-governmental institution instead. <Amended on Dec. 29, 2009>

(3) When the institution head is unable to perform his or her duties due to any unavoidable cause (including when the institution head is detained under Article 70 or 201 of the Criminal Procedure Act), one of the standing directors shall act on behalf of the institution head in accordance with the articles of association, while an executive officer prescribed by the articles of association shall act on behalf of the institution head when there is no standing director or if the relevant standing director is unable to act on behalf of the institution head. <Amended on Dec. 31, 2018; Jun. 9, 2020>

(4) Directors shall deliberate on the matters brought up to the directors' meeting, and shall participate in the adoption of a resolution.

(5) The auditor shall audit the business affairs and accounting of the public enterprise or quasi-governmental institution in compliance with the audit guidelines determined by the Minister of Economy and Finance, and shall present his or her opinion to the board of directors. In such cases, the Board of Audit and Inspection may present its opinion regarding the audit guidelines to the Minister of Economy and Finance. <Amended on Feb. 29, 2008; Oct. 1, 2025>

(6) The institution head shall assist, as necessary, the auditor or the audit committee in employment, placement, etc. of employees necessary for performing his, her, or its duties. <Amended on Dec. 29, 2009>

Article 35(Liabilities of directors and auditors) #

(1) The provisions of Article 382-3, 382-4, 399, 400, and 401 of the Commercial Act shall apply mutatis mutandis to directors of public enterprises and quasi-governmental institutions, while the provisions for release of liability to company in Article 414 and 415 of the Commercial Act shall apply mutatis mutandis to auditors of public enterprises and quasi-governmental institutions (including auditors of the audit committee; hereafter the same shall apply in this Article).

(2) If a non-standing director (excluding a non-standing director of a quasi-governmental institution; hereafter the same shall apply in this paragraph) or auditor (including a standing audit commissioner; hereafter the same shall apply in this paragraph) fails or neglects to perform his or her duties and responsibilities under paragraph (1) and his or her duties under Article 32, the Minister of Economy and Finance may, following the deliberation and resolution by the Steering Committee, remove the non-standing director or auditor or recommend the appointing authority to remove the non-standing director or auditor and may also demand the public enterprise or quasi-governmental institution concerned to claim indemnification for damages. <Amended on Feb. 29, 2008; Dec. 29, 2009; Oct. 1, 2025>

(3) If the institution head, a standing director (excluding a standing audit commissioner; hereafter the same shall apply in this paragraph), and non-standing director of a quasi-governmental institution fails or neglects to perform his or her duties and responsibilities under paragraph (1) and his or her duties under Article 32, the head of the competent agency may remove the institution head, standing director, and non-standing director of the quasi-government institution or recommend or demand the appointing authority to remove such institution head, standing director, and non-standing director, and may also demand the public enterprise or quasi-governmental institution concerned to claim indemnification for damage; provided, if the head of the competent agency removes the institution head of a public enterprise or recommends the appointing authority to remove such institution head, it shall undergo deliberation and resolution by the Steering Committee. <Amended on Dec. 29, 2009>

Article 39(Accounting principles) #

(1) The accounting of a public enterprise and a quasi-governmental institution shall be based on accruals to clearly show business performance and increases, decreases, and changes in assets.

(2) The head of a public enterprise or quasi-governmental institution may restrict qualification for participation in tendering for a certain period not exceeding 2 years with respect to a person (hereinafter referred to as "inappropriate business entity") who is deemed to undermine fair competition or proper performance of contracts (hereinafter referred to as "violation of contractual order"); provided, even in cases where the head of the public enterprise or quasi-governmental institution intends to restrict qualification for participation in tendering, he or she need not restrict qualification for participation in tendering in any of the following cases, if an inappropriate business entity pays the amount under the relevant subparagraph, as prescribed by Decree of the Ministry of Economy and Finance: <Amended on Mar. 26, 2024; Oct. 1, 2025>

1. Cases prescribed by Decree of the Ministry of Economy and Finance where the liabilities of the inappropriate business entity are minor, such as violations caused by unpredictable economic conditions, the amount prescribed by Decree of the Ministry of Economy and Finance within the limit of 10/100 of the estimated price);

2. In cases prescribed by Decree of the Ministry of Economy and Finance, where an effective competitive bidding is not clearly established due to restrictions on the qualification to participate in a bid: The amount prescribed by Decree of the Ministry of Economy and Finance within the limit of 30/100 of the contract amount (referring to the estimated price in cases where a contract is not concluded) of a contract related to an act in violation of the contractual order.

(3) Matters necessary for the accounting principles and restrictions on the qualification for bidding under paragraphs (1) and (2) shall be prescribed by Decree of the Ministry of Economy and Finance. <Amended on Feb. 29, 2008; Mar. 26, 2024; Oct. 1, 2025>

Article 39-2(Establishment of mid-and long-term financial management plans) #

(1) The head of an institution falling under any of the falling subparagraphs shall annually establish a mid- and long-term financial management plan (hereinafter referred to as "mid- and long-term financial management plan") for at least 5 fiscal years, including the relevant year, have such plan finalized via resolution by the board of directors, and submit them to the Minister of Economy and Finance and the heads of competent administrative agencies by June 30: <Amended on Jan. 21, 2014; Oct. 1, 2025>

1. Public enterprises and quasi-governmental institutions, the total asset size of which is over two trillion won, or for which the provisions on compensation by the Government for their losses are prescribed by the Acts that set forth the grounds for the establishment of such public enterprises and quasi-government institutions;

2. Other public enterprises and quasi-governmental institutions falling under the categories prescribed by Presidential Decree, in consideration of the size of their assets and liabilities.

(2) The mid- and long-term financial plan shall include the following details:

1. Business goals under Article 46;

2. Business plans and investment directions;

3. Financial outlook, the grounds thereof, and management plans;

4. Liability management plan detailing the outlook for liability increase or decrease, the grounds thereof, management plan, etc.;

5. Evaluation and analysis on any change against the mid- and long-term financial management plan for the previous year, causes of changes, management plan, etc.;

6. Other matters prescribed by Presidential Decree.

(3) In consideration of the direction for national policies as well as the management environment and economic conditions of an institution preparing a mid- and long-term financial management plan (hereafter referred to as "institution subject to formulation of the plan" in this paragraph), the Minister of Economy and Finance may request the head of an institution subject to formulation of the plan, which is a public enterprise, to change its mid- and long-term financial management plan, and the head of the competent agency may request the head of an institution subject to the plan, which is a quasi-governmental institution, to change its mid- and long-term financial management plan. <Added on Jan. 21, 2014; Oct. 1, 2025>

(4) Matters, such as detailed methods for preparing a mid-and long-term financial management plan, shall be prescribed by Presidential Decree. <Amended on Jan. 21, 2014>

[This Article Added on May 17, 2010]

Article 40(Budget compilation) #

(1) The budget of a public enterprise or quasi-governmental institution shall be compiled with the separate parts of the general provisions, the estimated income statement, the estimated balance sheet, and the financial plan.

(2) The institution head shall prepare a budget bill for the next fiscal year in accordance with the business goals under the provisions of Article 46 and the guidelines for management under the provisions of Article 50, and shall submit the bill to the board of directors of the public enterprise or quasi-governmental institution no later than the beginning of the next fiscal year.

(3) The institution head shall conduct a preliminary feasibility study as prescribed by Presidential Decree, in order to compile a budget for a new investment project and capital investment; provided, such preliminary feasibility study need not be conducted for any of the following projects: <Added on Mar. 22, 2016>

1. A project for which the preliminary feasibility study is conducted pursuant to Article 38 of the National Finance Act among projects funded by the government budget;

2. A project related to inter-Korean exchanges and cooperation or a project implemented under an agreement or treaty entered into with another country;

3. A simple improvement and maintenance project implemented to increase the use of an existing facility, such as road maintenance and improvement of deteriorated waterworks;

4. A project that needs to be implemented urgently to support the recovery from a disaster defined in subparagraph 1 of Article 3 of the Framework Act on the Management of Disasters and Safety (hereinafter referred to as "disaster"), or to ensure the safety of facilities and to cope with health or food safety issues;

5. A project that needs to be implemented urgently to prevent a disaster, to which the consent of the competent Standing Committee of the National Assembly has been granted;

6. A project that should be implemented pursuant to the statutes;

7. A project that needs to be implemented as a national policy in order to ensure balanced regional development and to cope with urgent economic and social situations, and that meets both of the following requirements. In such cases, the details of a project exempt from the preliminary feasibility study and the grounds for exemption shall be reported without delay to the competent Standing Committee of the National Assembly:

a. A detailed project plan including the purpose, scale and implementation method of the project and other matters shall have been formulated;

b. The project shall have been confirmed at the meeting of the State Council because it needs to be implemented as a national policy.

(4) The budget bill prepared and submitted under the provisions of paragraph (2) shall be finalized by resolution of the board of directors; provided, if other Act requires a separate process in connection with the budget of a public enterprise or quasi-governmental institution, such as a resolution by the general meeting of members including the general meeting of shareholders or investors, or a resolution by the fund management deliberation council under the provisions of Article 23, the budget shall be finalized through such a process after resolution by the board of directors, and where other Act requires approval of the head of the competent agency for finalizing a budget of a quasi-governmental institution, such approval shall be obtained from the head of the competent agency after resolution by the board of directors. <Amended on Mar. 22, 2016>

(5) The budget already finalized at the time of designation as a public enterprise or quasi-governmental institution under the provisions of Article 6 shall be deemed to have been prepared and finalized in accordance with the provisions of paragraphs (1) through (4). <Amended on Mar. 22, 2016>

(6) The institution head who intends to revise the finalized budget of the public enterprise or quasi-governmental institution because of a change in business goals of the public enterprise or quasi-governmental institution or any other unavoidable circumstances shall prepare and submit a bill of revised budget to the board of directors. In this case, paragraph (4) shall apply mutatis mutandis to the finalization of the bill of revised budget. <Amended on Mar. 22, 2016>

(7) When the budget is finalized or modified under paragraphs (4) through (6), the public enterprise or quasi-governmental institution shall report, without delay, the details to the Minister of Economy and Finance, the head of the competent agency, and the Chairperson of the Board of Audit and Inspection; provided, it shall be deemed to have been reported to the head of the competent agency, where approval in accordance with the proviso of paragraph (4) has been obtained from the head of the competent agency. <Amended on Feb. 29, 2008; Mar. 22, 2016; Oct. 1, 2025>

(8) Where the budget is finalized or revised pursuant to paragraphs (4) through (6), the public enterprise or quasi-governmental institution shall, without delay, submit the details thereof (including a revenue and expenditure plan for the relevant year) to the competent standing committee of the National Assembly. <Added on Dec. 31, 2018>

Article 43(Submission of statements on settlement of accounts) #

(1) Each public enterprise or quasi-governmental institution shall prepare the statements on the settlement of accounts for the corresponding fiscal year, without delay, at the end of the fiscal year, and shall be subject to an accounting audit conducted by an accounting auditor (hereinafter referred to as "accounting auditor") appointed, from among persons falling under any of the following subparagraphs, in accordance with the Rules of the Board of Audit and Inspection. In such cases, each public enterprise or quasi-governmental institution shall submit the statements on settlement of accounts within the period prescribed by the Rules of the Board of Audit and Inspection, after each fiscal year ends: <Amended on Mar. 25, 2009; Oct. 31, 2017; Jun. 9, 2020>

1. An accounting firm (hereinafter referred to as "accounting firm") referred to in Article 23 of the Certified Public Accountant Act;

2. An audit team (hereinafter referred to as "audit team") referred to in subparagraph 7b of Article 2 of the Act on External Audit of Stock Companies.

(2) Each public enterprise or quasi-governmental institution shall submit each of the following statements on the settlement of accounts prepared in accordance with paragraph (1) to the Minister of Economy or Finance and the head of the competent agency, respectively, no later than March 15 of the following year, and shall finalize the settlement of accounts by obtaining approval by April 10; provided, the settlement of accounts shall be finally approved by the general meeting of members, if the public enterprise or quasi-governmental institution has the general meeting of members, such as the general meeting of shareholders or investors: <Amended on Feb. 29, 2008; Mar. 25, 2009; Dec. 29, 2009; Jun. 9, 2020; Mar. 26, 2024; Oct. 1, 2025>

1. Financial statements (including the auditor's opinion by an accounting auditor) and accompanying documents;

2. Other documents necessary for clarifying the details of the settlement of accounts.

(3) The Minister of Economy and Finance and the head of the competent agency shall submit to the Board of Audit and Inspection the statements on the settlement of accounts of the public enterprise or quasi-governmental institution as finalized in accordance with paragraph (2) and other necessary documents (hereinafter in this Article, referred to as "statements, etc. on the settlement of accounts") no later than May 15 every year. <Amended on Feb. 29, 2008; Dec. 29, 2009; Mar. 26, 2024; Oct. 1, 2025>

(4) The Board of Audit and Inspection in receipt of the statements, etc. on the settlement of accounts in accordance with paragraph (3) shall inspect the statements, etc. on the settlement of accounts submitted by the legal entities under Article 22(1)3 of the Board of Audit and Inspection Act and by other public enterprises and quasi-governmental institutions prescribed by the Rule of the Board of Audit and Inspection, and shall submit the results thereof to the Minister of Economy and Finance by no later than July 10. <Amended on Feb. 29, 2008; Dec. 29, 2009; Mar. 26, 2024; Oct. 1, 2025>

(5) Necessary matters concerning the criteria for selection of an accounting firm and audit team qualified for accounting audits pursuant to paragraph (1), the procedures of accounting audits, and the audit by the Board of Audit and Inspection for the settlement of accounts pursuant to paragraph (4) shall be prescribed by the Rule of the Board of Audit and Inspection. <Amended on Mar. 25, 2009>

(6) The Minister of Economy and Finance shall report to the State Council the statements, etc. on the settlement of accounts under paragraph (3), along with the results of the audit conducted by the Board of Audit and Inspection under paragraph (4), and shall also submit them to the National Assembly no later than July 31. <Amended on Feb. 29, 2008; Dec. 29, 2009; Mar. 26, 2024; Oct. 1, 2025>

(7) Notwithstanding paragraphs (1) through (6), the settlement of accounts for the year in which each public enterprise or quasi-governmental institution is designated under the provisions of Article 6 shall be governed by the statues in force as at the time of such designation. <Amended on Jun. 9, 2020>

Article 46(Establishment of management goals) #

(1) The institution head shall set up medium- and long-term management goals for not less than 5 fiscal years including the following year, considering the substance of business, the management environment, and the details, etc. of the agreements executed under Article 31(3) and (4), and shall submit them to the Minister of Economy and Finance and the head of the competent agency by no later than October 31 every year after finalizing them through resolution by the board of directors. <Amended on Feb. 29, 2008; May 17, 2010; Oct. 1, 2025>

(2) Notwithstanding paragraph (1), with respect to the year in which the institution is designated as a public enterprise or quasi-governmental institution (excluding a change in designation) under Article 6, the institution head shall set up medium and long-term management goals for not less than three fiscal years including the relevant year within 3 months after such designation, and shall submit them to the Minister of Economy and Finance and the head of the competent agency after finalizing them through resolution by the board of directors. <Amended on Feb. 29, 2008; Mar. 31, 2020; Jun. 9, 2020; Oct. 1, 2025>

(3) Whenever the management goals set up in accordance with paragraphs (1) and (2) are changed, the head of institutions shall submit the details of the change to the Minister of Economy and Finance and the head of the competent agency without delay after finalizing them through resolution by the board of directors. <Amended on Feb. 29, 2008; May 17, 2010; Oct. 1, 2025>

(4) Considering the management environment, the economic situation, the direction of national policies, etc. of a public enterprise or quasi-governmental institution, the Minister of Economy and Finance may demand the head of a public enterprise to change business goals, while the head of the competent agency may demand such a change to the head of a quasi-governmental institution. <Amended on Feb. 29, 2008; Oct. 1, 2025>

Article 48(Evaluation of management performance) #

(1) The Minister of Economy and Finance shall evaluate the management performance of a public enterprise or quasi-governmental institution based on an annual report under Article 24-2(3), a report on the performance of an agreement executed under Article 31(3) and (4), management goals under Article 46, and a management performance report; provided, such management performance shall not be evaluated in the year when the relevant institution is designated as a public enterprise or quasi-governmental institution under Article 6 (excluding where such designation is changed). <Amended on Feb. 29, 2008; Dec. 31, 2018; Jun. 9, 2020; Oct. 1, 2025>

(2) In evaluating the management performance of a public enterprise or quasi-governmental institution under the main clause of paragraph (1), the Minister of Economy and Finance shall utilize the results of the evaluation already made for the institutions subject to the evaluation of fund management under Article 82 of the National Finance Act and the institutions subject to the evaluation in accordance with Article 32(3) of the Framework Act on Science and Technology. <Amended on Feb. 29, 2008; May 28, 2014; Oct. 1, 2025>

(3) The Minister of Economy and Finance may request a public enterprise or quasi- governmental institution to submit relevant data if necessary for the evaluation of management performance under paragraph (1). <Amended on Feb. 29, 2008; Dec. 31, 2008; Oct. 1, 2025>

(4) Where a public enterprise or quasi-government institution fails to submit an annual report under Article 24-2(3), a report on the performance of an agreement under Article 31(3) and (4), a management performance report, and accompanying documents, or prepares and presents a false report thereon, or impedes ethical management by unfair personnel operation, etc. which are prescribed by Presidential Decree, the Minister of Economy and Finance shall modify the results of evaluation of management performance and the performance-based payment, through deliberation and resolution by the Steering Committee, and shall take measures, such as caution and warning, against the relevant institution, or request the head of the competent agency or institution head to take personnel action against relevant persons. In such cases, if an auditor or an audit commissioner of the audit committee or an institution head fails or neglects to perform their relevant duties, the Minister of Economy and Finance or the head of the competent agency may dismiss the relevant auditor, audit commissioner of the audit committee, or institution head through deliberation and resolution by the Steering Committee, or may propose that his or her appointing authority should dismiss such auditor, audit commissioner of the audit committee, or institution head. <Added on Dec. 31, 2008; Mar. 27, 2018; Dec. 31, 2018; Oct. 1, 2025>

(5) Criteria and methods for the evaluation of management performance under paragraph (1) shall be prescribed by the Minister of Economy and Finance through deliberation and resolution by the Steering Committee, in such a manner that the following matters shall be included in the evaluation of a public enterprise or quasi-governmental institution: <Amended on Mar. 22, 2016; Oct. 1, 2025>

1. The rationality and achievement level of management goals;

2. The public nature and efficiency of major projects;

3. The adequacy of organizational and personnel management, including types of employment of employees;

4. Soundness in financial management and budget-saving efforts, including the implementation of the mid- and long-term financial management plan established under Article 39-2;

5. Results of the customer satisfaction survey conducted under Article 13(2);

6. Operation of a rational performance-based payment system;

7. Other matters related to the management of the public enterprise or quasi-governmental institution.

(6) The Minister of Economy and Finance may organize and operate an evaluation team for the management of public enterprises and quasi-governmental institutions (hereinafter referred to as "management evaluation team") to ensure the efficient evaluation of management performance under paragraph (1) and to provide professional and technical research or consultation regarding the evaluation of management performance. <Added on Mar. 25, 2009; Oct. 1, 2025>

(7) The Minister of Economy and Finance shall finish the evaluation of the management performance of public enterprises and quasi-governmental institutions by no later than June 20 each year, through deliberation and resolution by the Steering Committee, and shall report the results therefrom to the National Assembly and the President. <Amended on Feb. 29, 2008; Dec. 31, 2008; Mar. 25, 2009; Oct. 1, 2025>

(8) If the evaluation of management performance of a public enterprise or quasi-governmental institution under paragraph (7) reveals its poor performance, the Minister of Economy and Finance may propose or request that a person authorized under Article 25 and 26 who appointed the institution head and standing directors of such public enterprise or quasi-governmental institution should remove the institution head or standing directors, through deliberation and resolution by the Steering Committee. <Amended on Feb. 29, 2008; Dec. 31, 2008; Mar. 25, 2009; Oct. 1, 2025>

(9) If the evaluation of management performance of a public enterprise or quasi-governmental institution under paragraph (1) reveals that it has caused the insolvent management due to the excessive appropriation of personnel expenses and violation of guidelines for management under Article 50 (1), the Minister of Economy and Finance may request to take personnel or budgetary measures for securing the responsibility for future management and improvement in management, through deliberation and resolution by the Steering Committee. <Added on Dec. 31, 2008; Mar. 25, 2009; Oct. 1, 2025>

(10) Matters necessary for the procedure for the evaluation of management performance, the measures following the evaluation results of management performance under paragraph (1), and the composition, operation, etc. of the management evaluation team shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2008; Mar. 25, 2009>

Article 56(Penalty provisions) #

(1) Where any person falling under Article 635(1) of the Commercial Act, or any other person who is in charge of accounting of a public enterprise or quasi-governmental institution prepares and announces a false financial statement, in violation of the accounting principles under Article 39(1), he or she shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 50 million won.

(2) Where any person falling under Article 635(1) of the Commercial Act, or any other person who is in charge of accounting of a public enterprise or quasi-governmental institution or who is an accounting auditor or certified public accountant under his or her control performs any of the following acts, such person shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won: <Amended on Jul. 25, 2011>

1. Where he or she fails to appoint an accounting auditor without good cause;

2. Where he or she fails to make an entry of any matter to be described in the auditor's opinion or makes any false entry;

3. Where he or she divulges confidential information, in violation of Article 43-3(4);

4. Where he or she fails to prepare the statements on the settlement of accounts.

(3) Where any person falling under Article 635(1) of the Commercial Act or any other person who is in charge of accounting of a public enterprise or quasi-governmental institution performs any of the following acts, such person shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 20 million won: <Amended on Jul. 25, 2011>

1. Where he or she presents false data to an accounting auditor or certified public accountant under his or her control or interferes with an accounting auditor in conducting a normal accounting audit by deceit or other illegal means;

2. Where he or she refuses, interferes with, or challenges an accounting auditor's requests for inspection, reproduction, submission, etc. of data or investigation under Article 43-3(3) or fails to submit relevant data, without justifiable grounds;

3. Where he or she fails to submit the statements on the settlement of account to an accounting auditor, in violation of Article 43(1).

[This Article Added on Mar. 25, 2009]

ACT ON THE MANAGEMENT OF PUBLIC INSTITUTIONS

Article 1(Purpose) #

Article 2(Scope of application) #

Article 3(Guarantee for self-controlling operation) #

Article 4(Public institutions) #

Article 5(Classification of public institutions) #

Article 6(Procedures for designation of public institutions) #

Article 7(Examination on establishment of new institution) #

Article 8(Establishment of ownership Steering Committee) #

Article 9(Composition of Steering Committee) #

Article 10(Steering Committee's meeting) #

Article 11(Public disclosure of management performance) #

Article 12(Consolidated publication) #

Article 13(Customer charter and customer satisfaction level survey) #

Article 14(Adjustment of functions of public institutions) #

Article 15(Innovation of public institutions) #

Article 16(Matters to be entered in article of association) #

Article 17(Establishment and functions of board of directors) #

Article 18(Composition) #

Article 19(Meetings) #

Article 20(Committees) #

Article 21(Non-standing senior director) #

Article 22(Request for removal) #

Article 23(Fund management deliberation council) #

Article 24(Executive officers) #

Article 24-2(Quota system for appointment of executive officers for gender equality) #

Article 25(Appointment or removal of executive officers of public enterprises) #

Article 26(Appointment or removal of executive officers of quasi-governmental institutions) #

Article 27(Special exception concerning appointment of executive officers of public enterprises and quasi-governmental institutions with general meeting of members) #

Article 28(Term of office) #

Article 29(Committee for Recommendation of Executive Officers) #

Article 30(Criteria for recommendation of candidates for executive officers) #

Article 31(Agreement with institution head) #

Article 32(Duties of executive officers) #

Article 33(Guidelines for remuneration for executive officers) #

Article 34(Grounds for disqualification) #

Article 35(Liabilities of directors and auditors) #

Article 36(Evaluation of actual performance of duties as non-standing directors and auditors) #

Article 37(Restriction on concurrent offices of executive officers and employees) #

Article 38(Fiscal year) #

Article 39(Accounting principles) #

Article 39-2(Establishment of mid-and long-term financial management plans) #

Article 40(Budget compilation) #

Article 40-2(Disclosure of data related to results of preliminary feasibility study) #

Article 40-3(Feasibility review and disclosure of results thereof) #

Article 41(Quasi-budget) #

Article 42(Establishment of management plan) #

Article 43(Submission of statements on settlement of accounts) #

Article 43-2(Consultation on transferring capital of public enterprise) #

Article 43-3(Appointment of accounting auditors) #

Article 43-4(Liability for damage) #

Article 44(Commission of purchasing goods and contracting construction works) #

Article 45(Investment method) #

Article 46(Establishment of management goals) #

Article 47(Report on management performance) #

Article 48(Evaluation of management performance) #

Article 49(Preparation of annual reports) #

Article 50(Guidelines for management) #

Article 51(Supervision over public enterprises and quasi-governmental institutions) #

Article 51-2(Consultations on establishment of funding or investment institutions) #

Article 52(Audit by Board of Audit and inspection) #

Article 52-2(Presentation of audit results to National Assembly) #

Article 52-3(Request for investigation of persons who have committed misconduct) #

Article 52-4(Disclosure of list of persons who have committed employment misconduct) #

Article 52-5(Revocation of passing examinations of persons involved in employment misconduct) #

Article 52-6(Personnel audit) #

Article 53(Legal fiction as public officials in applying penalty provisions) #

Article 53-2(Notification by investigation agencies upon commencement and completion of investigations) #

Article 53-3(Restrictions on voluntary dismissal from office) #

Article 54(Exercise of minority stockholders' rights) #

Article 55(Penalty provisions) #

Article 56(Penalty provisions) #