Shin & Kim LLC said on the 24th that it concluded a seminar on the 20th at the Sejong seminar room on the 24th floor of Gran Seoul in Jongno-gu, Seoul, on the third topic in its "global corporations legal series – managing overseas legal risks and practical cases," titled "cases of misconduct by officers and employees of overseas subsidiaries and risk management measures." About 180 officials from domestic and overseas corporations attended the seminar.
Overseas subsidiaries are often physically separated from headquarters and operate independently. Differences in laws, systems, and culture by country, and the particularities of local regulatory environments, make it difficult to establish headquarters-level management, supervision, and internal control systems. In addition, misconduct by officers and employees may lead not only to financial losses but also to legal liability, business disruptions, and damage to corporate image locally.
Attorney Gil Young-min (Judicial Research and Training Institute class 33), who serves as Head of Team for Southeast Asia at Sejong as well as co-head of the Singapore office and head of the Vietnam office, introduced major types of misconduct that frequently occur at overseas subsidiaries and real cases. He then explained the management framework corporations should have in place in advance and response measures when problems arise.
Gil explained, by category, key risks for overseas subsidiaries: ▲ misappropriation and embezzlement of company funds ▲ leakage of technology and information ▲ employees' competing business activities ▲ personnel and labor-related issues. He said, "First, it is essential to properly design the day-to-day internal control system and ensure it actually operates, including proper separation of authority and duties, reporting and approval structures, and regular inspections," adding, "When an actual incident occurs, it is necessary to set the response direction from the initial stage and, if needed, work quickly with local legal experts."
Starting with Beijing, China, in 2006, followed by Shanghai (2010), Ho Chi Minh City, Vietnam (2017), Hanoi (2018), and Jakarta, Indonesia (2019), Sejong opened an overseas office in Singapore in April 2023.