Skip to content


Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Sungyong Kang: The Responsible Corporate Officer Doctrine is a big gun against grand corruption

Korea’s newly enacted anti-graft statute called the Kim Youngran law can’t be applied retroactively against allegations of grand corruption involving President Park and her confidante and the chaebols (family run conglomerates, such as Samsung and Hyundai). Instead the Special Prosecutor’s office will have to use the Criminal Act, and that will be a daunting task.

Unlike the Kim Youngran law, the Criminal Act requires a reciprocal favor to the bribe payer and doesn’t provide for the vicarious liability of employers. Thus, when the chaebol leaders come up with a simple excuse or fabrication — “I didn’t know anyone from our group was paying bribes to a public official” — imputing liability to them will be difficult, even with the chaebol’s centralized management and ownership structure.

As I discussed in my prior post, even the Kim Youngran law isn’t likely to deter grand corruption due to its low standard of due diligence defense (lack of negligence) and weak penalties (no imprisonment/low amount of financial penalty). So the question is, how should Korea further reform its anti-corruption laws?

One answer is to embrace the Responsible Corporate Officer (RCO) Doctrine, at least against grand corruption. That’s because grand corruption causes serious harm to society and requires a higher level of accountability of employers.

The RCO Doctrine in the United States can be traced to the U.S. Supreme Court decision in United States v. Dotterweich, 320 U.S. 277 (1943), together with its progeny, United States v. Park, 421 U.S. 658 (1975) and United States v. Brittain, 931 F.2d 1413 (10th Cir. 1991). The cases recognize the vicarious liability of responsible corporate officers for their failure to prevent illegal activities of subordinates, regardless of the officers’ criminal intent.

In the context of the Responsible Corporate Officer Doctrine, the due diligence defense is effective only when the corporate officer was powerless to prevent or correct the illegal conduct.

Importantly, the penalties for vicarious liability under the RCO Doctrine can include imprisonment. But penalties under the RCO Doctrine can also include fines and disqualification. The Doctrine can also be diluted somewhat by the application of the willful blindness (or deliberate ignorance) standard, which is close to actual criminal intent.

Adopting the Responsible Corporate Officer Doctrine in Korea would make it difficult for the chaebol leaders to insulate themselves from prosecution merely by pleading ignorance of wrongdoing by subordinates. It would also serve the public interest by creating strong incentives for the chaebol leaders to strengthen their corporate oversight and supervisory roles.

Finally, imposing criminal liability on responsible corporate officers rather than on the corporations themselves would prevent shareholders from becoming innocent victims.


Sungyong Kang is an Inspector for the Korea National Police where he investigates high-profile white collar crimes. He is currently researching anti-corruption and anti-money laundering as an SJD fellow at Fordham Law after receiving his LLM at NYU Law.

Share this post


Comments are closed for this article!