As the most direct method of shareholders’ inquiring into responsibility for poor management of the board of directors, the derivative suit plays a role in protecting shareholders’ rights and interests by not only strengthening responsibility management, but also ensuring that the relevant directors compensate for the damage on the company caused by their illegal acts. However, we only have 69 cases of derivative suit filed so far, which is about four cases per year. Therefore, the issue related to the effectiveness of the derivative suit is rising. This thesis aimed to examine the current status of the derivative suits and the problems of the current system, and also to suggest the improvement measures.
Regarding the standing to sue, first, it is necessary to stipulate that the effectiveness of lawsuit is not influenced even when the qualifications of shareholders are changed due to the exchange, transfer, and consolidation of stocks after the lawsuit while the minority shareholders’ rights are maintained. In case when a company files a lawsuit against directors, or when a derivative suit is filed by some shareholders, it is needed to notify or announce the lawsuit to shareholders, so that other shareholders also can participate in the relevant lawsuit. Regarding the burden of proof, next, it is suggested to have an amendment in which some requirements for reading account books are eased in order for the smooth progress of the lawsuit and relieving shareholders’ burden of proof in case when a derivative suit is filed, and also they are authorized to demand an inspector. In order to check if the company does not file a lawsuit even when there is a clear illegal act by a director, and to collect data necessary for the proof, it is required to legalize the corporate system of notifying the cause of no-lawsuit. The last suggestion is related to the litigation costs. It is necessary to improve litigation costs which is the most realistic issue, so that the derivative suit can play a role of the sound supervision in the corporate management. Considering that the derivative suit is a lawsuit not for shareholders as the plaintiff, but for the company, it is suggested to regulate it just like the Capital Market Act by raising “every cost caused by other lawsuits such as the litigation costs” ruled by the Article 191-13 Paragraph 15 of the Securities and Exchange Act.
Through the improvement measures, it is expected that the derivative suit can work as the representative post-regulation method that can protect shareholders’ rights and also recover the damage on the company caused by illegal acts of the board of directors.