The board of directors is the core management and oversight body of many Korean companies. Through board meetings, directors approve key business decisions, supervise management, review financial results and ensure that the company complies with the Korean Commercial Act and its own Articles of Incorporation.

Legal basis under the Korean Commercial Act

  • Companies with three or more directors must operate through a board of directors.

    Article 383 (Number, Term of Office) (1) Directors shall be at least three in number; provided, in case of a company of which the total capital is less than a prescribed amount, the number of the directors may be one or two. (2) The terms of office of directors may not exceed three years. (5) Where the number of a director is turned into one under the proviso of paragraph (1), the provisions on the board of directors in certain Articles shall not apply.

  • The board has authority over major business decisions and must supervise the performance of duties by directors.

    Article 393 (Authority of Board of Directors) (1) Disposal and transfer of important property, borrowings of large scale assets, appointment or dismissal of managers, and management of affairs such as establishment, transfer or abolition of branch offices shall be made by a resolution of the board of directors. (2) The board of directors shall supervise the performance of duties by the directors. (4) Directors shall report on the progress of their duties to the board of directors more than once every three months.

  • Board resolutions must follow statutory procedures on convocation and decision-making.

    Article 390 (Convocation of Board Meeting) and Article 391 (Methods of Resolution by Board of Directors) provide that board meetings are convened in accordance with the Articles of Incorporation and that resolutions are generally adopted by the attendance of a majority of incumbent directors and the affirmative vote of a majority of directors present, unless stricter requirements are set by law or the Articles.

  • Minutes must be prepared for each board meeting and kept as part of the company’s permanent records.

    Article 391-3 (Minutes of Board of Directors’ Meeting) (1) Minutes shall be prepared with regard to the proceedings of a meeting of the board of directors. (2) The agenda, gist of the progress, results thereof, dissenters and reasons for their dissension shall be entered in the minutes, and the directors and auditors present at the meeting shall write their names and affix seals, or sign thereon. (3) Shareholders may, during office hours, request perusal or copies of the minutes; the company may refuse only with reasons, in which case the shareholder may seek court permission.

  • Articles of incorporation and minutes must be retained at the principal office and be open to inspection and copying.

    Article 396 (Obligation to Retain and Disclose Articles of Incorporation, etc.) requires directors to retain the articles of incorporation and the minutes of the general meeting of shareholders at the principal office and each branch office, and to retain the register of shareholders and bond register at the principal office, and grants shareholders and creditors a right to inspect or copy these documents during business hours.

  • Certain failures relating to registration, record-keeping and access to minutes are subject to administrative fines.

    Article 635 (Acts Subject to Administrative Fines) (1) provides that a director or other specified officer may be subject to an administrative fine of up to five million won if, among other things, he or she neglects to make a registration prescribed in the Commercial Act, neglects to give a required public notice or notification, refuses without good cause to permit inspection or copying of documents such as minutes, or fails to state required particulars in statutory books, minutes, reports or financial statements.

Are board meetings and a board minute book mandatory?

For Korean stock companies (주식회사) with three or more directors, operating through a board of directors and preparing minutes of each board meeting is mandatory under the Korean Commercial Act. In smaller companies that are legally permitted to have only one or two directors, the law allows certain board functions to be exercised directly by the general meeting of shareholders instead of a formal board. However, once a company has three or more directors, board structures and the associated record-keeping obligations apply in full.

Failure to hold necessary board meetings, to document resolutions properly in minutes, or to keep those minutes available at the principal office can expose directors to administrative fines under Article 635 and may create evidentiary problems in audits, disputes or due diligence.

Board meeting practice in Korea

In practice, Korean boards meet multiple times per year. Article 393 envisages regular reporting by directors to the board at least once every three months, which in practice leads to at least quarterly meetings in many companies. Key recurring board agendas often include approval of financial statements and the business report before they are submitted to the statutory auditor and then to the AGM, approval of major contracts and transactions, appointment and dismissal of managers, establishment or closure of branches, and oversight of compliance and internal controls.

Board minute book requirements

Under Article 391-3, the minutes of each board meeting must record the agenda, the gist of discussions, the results of resolutions, and the identity and reasons of dissenting directors. The minutes must bear the names and seals or signatures of directors and auditors present. These minutes are then kept at the principal office, commonly in a bound board minute book that compiles minutes of all board meetings. Shareholders have a statutory right to inspect or copy the minutes during business hours, subject to limited grounds for refusal.

Common issues for foreign-owned companies

  • Board decisions being taken by email or messaging apps without a formal board meeting, agenda or minutes that satisfy Korean law.
  • Minutes that are too brief or generic, lacking clear descriptions of resolutions and dissent, which creates uncertainty in later reviews or disputes.
  • Board minutes or resolutions kept only in English or only at overseas headquarters, instead of being retained at the Korean principal office.
  • Unclear distinction between matters that require board resolution and those that can be decided by management, leading to potential challenges to corporate approvals.

How KOISRA UP can help

KOISRA UP designs practical board calendars, prepares bilingual board agendas and draft resolutions, and drafts minutes that reflect the requirements of the Korean Commercial Act while remaining concise and business-focused. We also help clients establish a robust board minute book at the principal office and coordinate with Korean lawyers and judicial scriveners where board decisions must be reflected in commercial registry filings.

This article is part of KOISRA UP’s Corporate Secretarial & Governance Services series. To learn more about our support for board meetings and board minute books in Korea, please visit our Corporate Secretarial & Governance Services in Korea page.