Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices

CHAPTER 62

CORPORATE GOVERNANCE: SOUTH KOREA

Jill Solomon, PhD

62.1 INTRODUCTION

62.2 TRADITIONAL FRAMEWORK OF CORPORATE GOVERNANCE IN SOUTH KOREA

62.3 CORPORATE GOVERNANCE REFORM IN SOUTH KOREA: REFORMING OWNERSHIP STRUCTURE

62.4 TRANSPARENCY AND BOARD STRUCTURE

62.5 EMPIRICAL EVIDENCE RELATING TO CORPORATE GOVERNANCE REFORM IN SOUTH KOREA

62.6 CONCLUDING COMMENTS

REFERENCES

62.1 INTRODUCTION

Corporate governance in South Korea has undergone substantial reform in recent years. The Asian financial crisis focused attention on corporate governance weaknesses in Asian companies. In the wake of the financial crisis, countries in the region have focused attention on improving and tightening their systems of corporate governance and corporate control. As outlined in Solomon (2007), South Korea has witnessed substantial economic and political change in recent years. The political environment has been liberalized and the political strategy has been to open up the South Korean economy to international investment. President Kim Dae-jung's policy of segyehwa (globalization) focused on making Korean businesses more internationally competitive and more attractive to foreign investors (Ungson, Steers, and Park 1997). As stressed by the Organization for Economic Cooperation Development (OECD) (2004), attracting international investment by financial institutions is one of the primary motivations for countries to reform their systems of corporate governance. Institutional investors will be more ...