1s \ == \ ‘= ) | MARIELA M. VARGOVA, PH.D. Senior Vice President, Senior Sustainability and Impact Analyst 212.549.5236 [email protected] The Promise of Governance Reform—south Korea n his inauguration speech on May 10th, the newly elected Korea, however, has not always been viewed as the laggard in [sc Korean President Moon Jae-In vowed to put chaebol _Asia’s governance landscape. Right after the Asian Financial reform at the forefront of his political and economicagenda. Crisis of 1997-1998, the country underwent important “Under the Moon Jae-In administration,” he asserted, “the | governance reforms that sought to quickly and significantly collusive link between politics and business will completely increase corporate board independence and the overall disappear.’ The promise of meaningful governance reform — governance of publicly-traded Korean companies. For instance, comes in the wake of the biggest political corruption scandalin the proportion of listed firms with at least one outside director Korea that saw the impeachmentand the arrest ofdemocratically grew from 34% in 1999, to 62.3% in 2000, to reach 94% in 2007.° elected President Park Geun-Hye on charges of “collecting or In 2001 and 2003, the country’s Security Exchange Acts required demanding $52 million in bribes”* from Samsung, one of _ large listed companies (those with about $2 billion in market Korea’ largest family-owned conglomerates, known as chaebol. _ capitalization) on the Korea Exchange and KOSDAQ to have at The presidential scandal in Korea also led to the latest high- least three outside directors and for one half of their boards to profile corporate arrest in the country. In February, Jay Y. Lee, be independent. In 2004, the board independence requirements vice chairman and acting leader of Samsung’s conglomerate _ WeTe further strengthened with the stipulation that there be a empire, was arrested on accusations of bribery to former majority of independent board directors for large com