Toward the “Best Practice” Model in a Globalizing Market: Recent Developments in Korean Corporate Governance

Abstract

This article is a status report. This article briefly describes and analyses recent developments in Korean corporate governance by looking at the Korean economy's adaptation to global standards prevalent in a globalizing market. It illustrates, by using various empirical data made available in the recent years, 2000 and 2001, that the Korean corporate governance system successfully adapts to the “best practice” model accepted by global standards. It claims that the Korean efforts will ultimately enable its enterprises to efficiently compete in the global marketplace and freely access international financial markets as legitimate and credible partners. It also suggests that the Korean effort may provide a good model for other emerging economies of an economic and social development toward the establishment of the best practice by global standards, particularly because private sector development programs of international organizations have mandated the new system. Finally, this article tries to indicate that “law matters”, and that international law and organizations may contribute to the development of effective corporate governance institutions and securities markets within civil law countries such as Korea where concentrated ownership structures currently prevail and the legal protection of minority investors is relatively weak.