Certainly, independent directors with responsibility for the welfare of all shareholders could help moderate excesses. The law now requires listed companies to appoint a third of their directors from outside. Next year, these will form at least half of all directors in the largest companies. The problem, however, is that many outside directors are less than independent. As one corporate activist told us, outside directors often are appointed with the understanding that they will act as lobbyists.
Taxes are a perennial problem for many Korean companies and individuals.
One company last year appointed a former tax officer as director. The reality is that minority stakeholders hold little sway in the companies they invest in. While chaebols now are encouraged to meet institutional investors, they aren't required to do so. Thus, they answer to no one outside. More, minority shareholders have no remedy against decisions that harm their investment.