The Reform of Corporate Governance in Korea with an Emphasis on the Hyundai Group

Abstract

This article analyzes changes in corporate governance institutions in Korea with an emphasis on the Hyundai Group. It is based mainly on historical institutionalism. In particular, it focuses on power struggles between pro-reformers and anti-reformers. According to Krasner (1984), and institutional change after a long period of equilibrium results in a radically new institution. However, it is not the case in many cases. Entrenched interests, in reality, tend to desperately resist reforms or compromise with pro-reformers. Consequently, a resulting insitution reflects the interests of both pro-reformers and anti-reformers. This means that a new institution cannot be a totally new one but follows its historical path. We can find the same logic in the chaebol reforms since 1998 in Korea. The Hyundai Group, a classic Korean chaebol, verifies the logic very well.