Seoul Sets About Upgrading Lagging Corporate Governance

Outdated corporate governance has long been regarded as one of the reasons for the “Korea discount.” This means the values of Korean companies and their products have not been duly recognized in global markets because of backward systems and practices in running businesses. It is against this background that the government has decided to intervene, directly and indirectly, in corporate efforts _ or lack thereof _ to upgrade their governance structure, officials said Monday. Specifically, they plan to enhance “model criteria” for corporate governance, obligate businesses to make public the reasons for non-compliance, and make institutional investors, including pension funds, play a more active role in the process. But businesses are opposing the government’s moves, saying there can be “no correct answers” in corporate governance.