The legacy of controlling minority structure: a kaleidoscope of corporate governance reform in Korean Chaebol

摘要

Recently, in one of the most comprehensive and influential surveys of corporate governance published in the 1990s, Andrei Shleifer and Robert W. Vishny criticized the Korean chaebol structure as among the least investor-protective corporate systems in the world. In one representative passage, Shleifer and Vishny allege that "In many countries today, the law protects investors better than it does in Russia, Korea, or Italy." This statement provokes several questions regarding corporate governance in Korea. For instance, do Korean chaebol firms have weak governance structures? If so, which aspects of the legal and economic environment in Korea enable such weak governance structures? In today's globalized business environment, how is it possible that chaebol can engage in such practices and yet still be so persistently successful? What does the future hold for such a weak corporate governance system? Are changes in the ownership structure a necessary or sufficient condition for overcoming the weakness of this system? Although it will not be possible to discuss all of these issues presently, the purpose of this Article is to explore the theoretical foundations of better corporate governance in Korea against the backdrop of the current legal and economic environment.