Corporate Governance Country Assessment : Republic of Korea
Since 1998, Korea has taken important steps to address the weaknesses that contributed to the economic crisis of 1997. The corporate governance framework has been strengthened significantly. The reform agenda, however, remains unfinished and the eq...
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| Format: | Corporate Governance Assessment (ROSC) |
| Language: | English en_US |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2003/09/6569761/republic-korea-report-observance-standards-codes-rosc-corporate-governance-country-assessment http://hdl.handle.net/10986/14507 |
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okr-10986-14507 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTABILITY ADVISORY SERVICES ANTI-CORRUPTION APPLICABLE LAWS AUDIT COMMITTEES AUTHORIZATION AUTHORIZED SHARES BALANCE SHEET BOARD BOARD MEMBERS BOARD OF DIRECTORS BOARDS OF DIRECTORS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CASH FLOW CASH FLOWS COMMON STOCK CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSENSUS CORPORATE CONTROL CORPORATE CULTURE CORPORATE GOVERNANCE CORPORATE INFORMATION CORPORATE PERFORMANCE CORPORATE STRATEGY CORPORATION CORPORATIONS DEGREE OF CONTROL DISCLOSURE DISCLOSURE OF INFORMATION DISCRIMINATION DIVIDENDS DOMESTIC INSTITUTIONAL INVESTORS DRAFT LAW DRAFT LEGISLATION DUE DILIGENCE ECONOMIC CRISIS EQUITY MARKETS EXPENDITURES EXTERNAL AUDITORS FINANCIAL CONTROL FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SITUATION FINANCIAL STATEMENTS FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FTC HOLDING COMPANIES INDIVIDUAL SHAREHOLDERS INSIDER TRADING INSTITUTIONAL FRAMEWORK INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INTERNATIONAL STANDARDS INVESTMENT BANKERS INVESTMENT TRUSTS LABOR UNIONS LAWYERS LEGAL OWNERSHIP LEGISLATION LEGISLATIVE CHANGES LISTED COMPANIES MAJORITY OF SHARES MANAGEMENT MINISTRY OF FINANCE MINORITY SHAREHOLDER MINORITY SHAREHOLDERS MUTUAL FUNDS NUMBER OF SHARES PARENT COMPANY PENSION SYSTEM PORTION OF SHARES PRIVATE SECTOR PROTECTION OF INVESTORS PUBLIC COMPANIES PUBLIC INFORMATION REGULATORY AUTHORITIES REGULATORY FRAMEWORK SHARE OWNERSHIP SHAREHOLDER MEETING SHAREHOLDER MEETINGS SHAREHOLDERS SHAREHOLDING STAKEHOLDERS STATEMENT STATEMENTS STOCK EXCHANGE SUPPLIERS TOTAL MARKET CAPITALIZATION TRANSPARENCY VOTING VOTING SHARES |
| spellingShingle |
ACCOUNTABILITY ADVISORY SERVICES ANTI-CORRUPTION APPLICABLE LAWS AUDIT COMMITTEES AUTHORIZATION AUTHORIZED SHARES BALANCE SHEET BOARD BOARD MEMBERS BOARD OF DIRECTORS BOARDS OF DIRECTORS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CASH FLOW CASH FLOWS COMMON STOCK CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSENSUS CORPORATE CONTROL CORPORATE CULTURE CORPORATE GOVERNANCE CORPORATE INFORMATION CORPORATE PERFORMANCE CORPORATE STRATEGY CORPORATION CORPORATIONS DEGREE OF CONTROL DISCLOSURE DISCLOSURE OF INFORMATION DISCRIMINATION DIVIDENDS DOMESTIC INSTITUTIONAL INVESTORS DRAFT LAW DRAFT LEGISLATION DUE DILIGENCE ECONOMIC CRISIS EQUITY MARKETS EXPENDITURES EXTERNAL AUDITORS FINANCIAL CONTROL FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SITUATION FINANCIAL STATEMENTS FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FTC HOLDING COMPANIES INDIVIDUAL SHAREHOLDERS INSIDER TRADING INSTITUTIONAL FRAMEWORK INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INTERNATIONAL STANDARDS INVESTMENT BANKERS INVESTMENT TRUSTS LABOR UNIONS LAWYERS LEGAL OWNERSHIP LEGISLATION LEGISLATIVE CHANGES LISTED COMPANIES MAJORITY OF SHARES MANAGEMENT MINISTRY OF FINANCE MINORITY SHAREHOLDER MINORITY SHAREHOLDERS MUTUAL FUNDS NUMBER OF SHARES PARENT COMPANY PENSION SYSTEM PORTION OF SHARES PRIVATE SECTOR PROTECTION OF INVESTORS PUBLIC COMPANIES PUBLIC INFORMATION REGULATORY AUTHORITIES REGULATORY FRAMEWORK SHARE OWNERSHIP SHAREHOLDER MEETING SHAREHOLDER MEETINGS SHAREHOLDERS SHAREHOLDING STAKEHOLDERS STATEMENT STATEMENTS STOCK EXCHANGE SUPPLIERS TOTAL MARKET CAPITALIZATION TRANSPARENCY VOTING VOTING SHARES World Bank Corporate Governance Country Assessment : Republic of Korea |
| geographic_facet |
East Asia and Pacific Korea, Republic of |
| description |
Since 1998, Korea has taken important
steps to address the weaknesses that contributed to the
economic crisis of 1997. The corporate governance framework
has been strengthened significantly. The reform agenda,
however, remains unfinished and the equity markets relative
to other OECD countries remain underdeveloped. There has
been good progress in upgrading accounting and auditing
standards and practices, as well as strengthening underlying
institutions responsible for setting standards and ensuring
compliance. The Financial Supervisory Commission/Financial
Supervisory Services have been established, and the role of
the Korean Institute of Certified Public Accountants has
been strengthened. Efforts should continue to further
improve accounting standards and improve accounting and
auditing practices, and include measures to clarify and
strengthen the role and function of audit committees
consistent with international best practices; replace
statutory auditors with audit committees for smaller
companies over time; and upgrade the skills and knowledge of
audit committee members. While holding companies are
allowed, only several of them have been established. In
order to improve transparency and disclosures of
chaebol-affiliated operations, consider several measures
including measures that may change the incentives for large
chaebol to establish holding companies (e.g. lower taxes).
While significant improvements have been made to increase
minority shareholder rights (e.g., by lowering or
eliminating threshold ownership requirements) and the ease
with which shareholders exercise those rights, further
improvements are required, including measures to allow
minority shareholders a greater voice in the selection of
directors and steps to improve the process for nominating
independent directors. While derivative actions are allowed,
these are costly and therefore have been limited so far to
only a few. The redress available to shareholders if their
rights are violated remains limited, and there is no
cost-effective way for them to seek redress. The draft law
submitted to the National Assembly allowing class action
lawsuits should be enacted as soon as possible. Securities
laws have been amended to require listed companies to have
outside directors. However, the concept of independent
(outside) directors is new and still not well rooted in
Korea. Additional efforts could include measures to expand
the fiduciary duty of directors to shareholders and make it
explicit under the law, and to limit liability of
independent directors in cases in which they have acted in
good faith. |
| format |
Economic & Sector Work :: Corporate Governance Assessment (ROSC) |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Corporate Governance Country Assessment : Republic of Korea |
| title_short |
Corporate Governance Country Assessment : Republic of Korea |
| title_full |
Corporate Governance Country Assessment : Republic of Korea |
| title_fullStr |
Corporate Governance Country Assessment : Republic of Korea |
| title_full_unstemmed |
Corporate Governance Country Assessment : Republic of Korea |
| title_sort |
corporate governance country assessment : republic of korea |
| publisher |
Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2003/09/6569761/republic-korea-report-observance-standards-codes-rosc-corporate-governance-country-assessment http://hdl.handle.net/10986/14507 |
| _version_ |
1764429166409678848 |
| spelling |
okr-10986-145072021-04-23T14:03:18Z Corporate Governance Country Assessment : Republic of Korea World Bank ACCOUNTABILITY ADVISORY SERVICES ANTI-CORRUPTION APPLICABLE LAWS AUDIT COMMITTEES AUTHORIZATION AUTHORIZED SHARES BALANCE SHEET BOARD BOARD MEMBERS BOARD OF DIRECTORS BOARDS OF DIRECTORS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CASH FLOW CASH FLOWS COMMON STOCK CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSENSUS CORPORATE CONTROL CORPORATE CULTURE CORPORATE GOVERNANCE CORPORATE INFORMATION CORPORATE PERFORMANCE CORPORATE STRATEGY CORPORATION CORPORATIONS DEGREE OF CONTROL DISCLOSURE DISCLOSURE OF INFORMATION DISCRIMINATION DIVIDENDS DOMESTIC INSTITUTIONAL INVESTORS DRAFT LAW DRAFT LEGISLATION DUE DILIGENCE ECONOMIC CRISIS EQUITY MARKETS EXPENDITURES EXTERNAL AUDITORS FINANCIAL CONTROL FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SITUATION FINANCIAL STATEMENTS FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FTC HOLDING COMPANIES INDIVIDUAL SHAREHOLDERS INSIDER TRADING INSTITUTIONAL FRAMEWORK INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INTERNATIONAL STANDARDS INVESTMENT BANKERS INVESTMENT TRUSTS LABOR UNIONS LAWYERS LEGAL OWNERSHIP LEGISLATION LEGISLATIVE CHANGES LISTED COMPANIES MAJORITY OF SHARES MANAGEMENT MINISTRY OF FINANCE MINORITY SHAREHOLDER MINORITY SHAREHOLDERS MUTUAL FUNDS NUMBER OF SHARES PARENT COMPANY PENSION SYSTEM PORTION OF SHARES PRIVATE SECTOR PROTECTION OF INVESTORS PUBLIC COMPANIES PUBLIC INFORMATION REGULATORY AUTHORITIES REGULATORY FRAMEWORK SHARE OWNERSHIP SHAREHOLDER MEETING SHAREHOLDER MEETINGS SHAREHOLDERS SHAREHOLDING STAKEHOLDERS STATEMENT STATEMENTS STOCK EXCHANGE SUPPLIERS TOTAL MARKET CAPITALIZATION TRANSPARENCY VOTING VOTING SHARES Since 1998, Korea has taken important steps to address the weaknesses that contributed to the economic crisis of 1997. The corporate governance framework has been strengthened significantly. The reform agenda, however, remains unfinished and the equity markets relative to other OECD countries remain underdeveloped. There has been good progress in upgrading accounting and auditing standards and practices, as well as strengthening underlying institutions responsible for setting standards and ensuring compliance. The Financial Supervisory Commission/Financial Supervisory Services have been established, and the role of the Korean Institute of Certified Public Accountants has been strengthened. Efforts should continue to further improve accounting standards and improve accounting and auditing practices, and include measures to clarify and strengthen the role and function of audit committees consistent with international best practices; replace statutory auditors with audit committees for smaller companies over time; and upgrade the skills and knowledge of audit committee members. While holding companies are allowed, only several of them have been established. In order to improve transparency and disclosures of chaebol-affiliated operations, consider several measures including measures that may change the incentives for large chaebol to establish holding companies (e.g. lower taxes). While significant improvements have been made to increase minority shareholder rights (e.g., by lowering or eliminating threshold ownership requirements) and the ease with which shareholders exercise those rights, further improvements are required, including measures to allow minority shareholders a greater voice in the selection of directors and steps to improve the process for nominating independent directors. While derivative actions are allowed, these are costly and therefore have been limited so far to only a few. The redress available to shareholders if their rights are violated remains limited, and there is no cost-effective way for them to seek redress. The draft law submitted to the National Assembly allowing class action lawsuits should be enacted as soon as possible. Securities laws have been amended to require listed companies to have outside directors. However, the concept of independent (outside) directors is new and still not well rooted in Korea. Additional efforts could include measures to expand the fiduciary duty of directors to shareholders and make it explicit under the law, and to limit liability of independent directors in cases in which they have acted in good faith. 2013-07-23T21:48:04Z 2013-07-23T21:48:04Z 2003-09 http://documents.worldbank.org/curated/en/2003/09/6569761/republic-korea-report-observance-standards-codes-rosc-corporate-governance-country-assessment http://hdl.handle.net/10986/14507 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC Economic & Sector Work :: Corporate Governance Assessment (ROSC) Economic & Sector Work East Asia and Pacific Korea, Republic of |