(1) A listed company shall ensure that outside directors comprise no less than one fourth of the total number of directors except in cases prescribed by Presidential Decree in light of the scale of assets; Provided, That listed companies prescribed by Presidential Decree based on the scale of assets, etc., shall appoint three or more outside directors and the number of outside directors shall account for more than half of the total number of directors.
(2) No outside director of a listed company shall fall under any of the following subparagraphs as well as any subparagraph of Article 382 (3), and if he or she falls under any of the following subparagraphs, he or she shall be removed from his or her office: <Amended by Act No. 10600, Apr. 14, 2011; Act No. 15755, Sep. 18, 2018>
1. A minor, person under adult guardianship, or person under limited guardianship;
2. A person declared bankrupt and not yet reinstated;
3. A person for whom two years have not elapsed since his or her imprisonment without labor or greater punishment declared by a court was completely executed or exempted;
4. A person for whom two years have not elapsed since he was dismissed or removed from office after violating an Act separately prescribed by Presidential Decree;
5. In cases where a shareholder of the listed company and persons who have a special relationship with the shareholder as prescribed by Presidential Decree (hereinafter referred to as "specially related persons") own the largest number of shares, based on the total number of issued and outstanding shares other than nonvoting shares, such shareholder (hereinafter referred to as the "largest shareholder") and his or her specially related persons;
6. A shareholder who owns more than 10 percent of the total number of issued and outstanding shares other than nonvoting shares on his or her own account regardless of in whose name the shares are held, or exerts de facto influence on important matters related to the management of the listed company, including the appointment and dismissal of directors, executive directors or auditors, and his or her spouse, lineal ascendants and lineal descendants (hereinafter referred to as a "major shareholder");
7. A person determined by Presidential Decree, who has difficulty faithfully performing any of his or her duty as an outside director, or who may have an influence on the management of the listed company.
(3) In cases where the number of outside directors does not meet the quorum required for the establishment of the board of directors under paragraph (1) due to any cause such as resignation or death of any outside director, a listed company under paragraph (1) shall appoint outside directors at the first general meeting of shareholders convened after such cause has occurred, to satisfy the requirements prescribed in paragraph (1).
(4) A listed company under the proviso to paragraph (1) shall establish a committee referred to in Article 393-2 (hereafter referred to as the "committee for recommending candidates for outside directors" in this Article) to recommend candidates for outside directors. In such cases, the committee shall ensure that outside directors comprises a majority of the total number of committee members. <Amended by Act No. 10600, Apr. 14, 2011>
(5) When a listed company under the proviso to paragraph (1) intends to appoint outside directors at a general meeting of shareholders, the company shall appoint outside directors from among candidates recommended by the committee for recommending candidates for outside directors. In such cases, when the committee recommends candidates for outside directors, the candidates recommended by a shareholder who is eligible to exercise the rights provided for in Article 363-2 (1), 542-6 (1) and (2) six weeks prior to the date set for a general meeting of shareholders (in cases of an ordinary general meeting of shareholders, referring to the date of the relevant year that corresponds to the date of an ordinary general meeting of shareholders of the immediately preceding year) shall be included. <Amended by Act No. 10600, Apr. 14, 2011>[This Article Newly Inserted by Act No. 9362, Jan. 30, 2009]