Edited by Jennifer G. Hill and Randall S. Thomas
Chapter 24: Dynamics of shareholder power in Korea
Korean society has undergone a transformation during the last fifty years. Developments in the Korean economy are particularly noteworthy. Small family firms which sprouted from the ruins of the Korean War have evolved into giant conglomerates competing in the global marketplace. The shareholder profile of large corporations has changed in the process. Fifty years ago, even the largest firms were essentially family operations without significant outside investors. As of 2012, more than 10 percent of the population (5 million out of 50 million people) invests in the stock market.1 Despite the staggering growth of the shareholding public, the legal status of shareholders remains largely the same as 50 years ago. Their role and influence, however, has been changing. The purpose of this chapter is to explore the dynamics of shareholder power in Korea. Shareholder power has attracted much attention recently in connection with the so-called shareholder empowerment debate, which has taken center stage in recent corporate governance discourse in the US. The shareholder empowerment debate, however, fails to draw much attention in Korea. The ubiquity of control shareholders may weaken the need to empower shareholders to stem the potential abuse by strong managers. However, it still seems worthwhile to explore the topic of shareholder power in the context of corporate governance in Korea. Such an endeavor will help in understanding better how shareholder power works in a different corporate governance environment.
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