July 2 is fast approaching—the Phase 3 submission deadline for the accountability framework (chaekmu-gujodo), applying to financial investment and insurance companies with assets under 5 trillion won, specialized credit finance companies with assets over 5 trillion won, and savings banks with assets exceeding 700 billion won. As financial authorities significantly strengthen their compliance reviews and on-site inspections, a practical guidebook has been drawing attention across the financial industry: the "2026 Edition Accountability Implementation Guide," authored by Kwon Sung-min, a partner attorney at Jinheon Law Firm who previously led the accountability framework implementation project at Shinhan Investment & Securities' Compliance Division.
The accountability framework originated from the 2019 DLF (Derivative-Linked Fund) crisis, which caused principal losses of approximately 400 billion won. At the time, the Supreme Court drew a strict distinction between the duty to "establish" internal control standards and the duty to "operate" them, ultimately ruling in favor of the financial institutions. This revealed the limitations of the existing legal framework in holding senior management accountable. In response, the amended Corporate Governance Act explicitly assigned individual executives a duty to manage internal controls within their respective areas, advancing the principle that "authority can be delegated, but responsibility cannot."
The supervisory authorities' inspection approach has likewise shifted—from "design reviews" that examine form, to "operational reviews" that verify whether the system actually functions in practice. Because responsibility now rests directly with the executive to whom the duty was assigned, rather than with the employee who caused the incident, the key challenge for executives is to demonstrate through concrete records that they have faithfully carried out their internal control activities.
Attorney Kwon Sung-min emphasized, "For this system to land successfully, financial institutions must go beyond merely preparing formal documents and make genuine, structural efforts to embed a culture of compliance into their everyday business operations."
Kwon Sung-min, a partner attorney at Jinheon Law Firm, draws on his experience leading the accountability framework implementation project and the development of monitoring systems at Shinhan Investment & Securities' Compliance Division to provide in-depth counsel on building internal control systems and navigating accountability framework compliance. As a legal professional who has directly overseen frontline operations, he offers distinctive expertise in designing internal control systems that genuinely function—going beyond formal documentation—and in helping executives prevent legal risk.
July 2 is fast approaching—the Phase 3 submission deadline for the accountability framework (chaekmu-gujodo), applying to financial investment and insurance companies with assets under 5 trillion won, specialized credit finance companies with assets over 5 trillion won, and savings banks with assets exceeding 700 billion won. As financial authorities significantly strengthen their compliance reviews and on-site inspections, a practical guidebook has been drawing attention across the financial industry: the "2026 Edition Accountability Implementation Guide," authored by Kwon Sung-min, a partner attorney at Jinheon Law Firm who previously led the accountability framework implementation project at Shinhan Investment & Securities' Compliance Division.
The accountability framework originated from the 2019 DLF (Derivative-Linked Fund) crisis, which caused principal losses of approximately 400 billion won. At the time, the Supreme Court drew a strict distinction between the duty to "establish" internal control standards and the duty to "operate" them, ultimately ruling in favor of the financial institutions. This revealed the limitations of the existing legal framework in holding senior management accountable. In response, the amended Corporate Governance Act explicitly assigned individual executives a duty to manage internal controls within their respective areas, advancing the principle that "authority can be delegated, but responsibility cannot."
The supervisory authorities' inspection approach has likewise shifted—from "design reviews" that examine form, to "operational reviews" that verify whether the system actually functions in practice. Because responsibility now rests directly with the executive to whom the duty was assigned, rather than with the employee who caused the incident, the key challenge for executives is to demonstrate through concrete records that they have faithfully carried out their internal control activities.
Attorney Kwon Sung-min emphasized, "For this system to land successfully, financial institutions must go beyond merely preparing formal documents and make genuine, structural efforts to embed a culture of compliance into their everyday business operations."
Kwon Sung-min, a partner attorney at Jinheon Law Firm, draws on his experience leading the accountability framework implementation project and the development of monitoring systems at Shinhan Investment & Securities' Compliance Division to provide in-depth counsel on building internal control systems and navigating accountability framework compliance. As a legal professional who has directly overseen frontline operations, he offers distinctive expertise in designing internal control systems that genuinely function—going beyond formal documentation—and in helping executives prevent legal risk.