The Best Advocate of Shareholders' Rights
How does Jang Ha Sung know his campaign for better protection of
minority shareholders is succeeding? "You may remember that the
1998 shareholders' meeting of Samsung Electronics lasted over 13
hours," says the Korea University finance professor. "This year,
the meeting took barely two hours. We are nearly there."
Lee - Black Star for Asiaweek.
After successes in Korea, Jang will set up an Asian
network for good corporate governance.
The "we" is the Seoul-based non-government organization People's
Solidarity for Participatory Democracy. In the past three years,
the PSPD's economy committee, which Jang chairs, raised tough questions
about the books of Korea's leading companies, bought stock to gain
legal standing in shareholder meetings, and even sued unresponsive
managements. Jang counts the appointment of outside directors to
the boards of Samsung and other companies and a general increase
in the level of corporate transparency among his group's victories.
More needs to be done. "We alone cannot change the behavior of managers
and owners," says Jang. "The law now requires companies to name
outside directors, but in many cases, those appointed are friends
of the company's owners with no professional knowledge. We also
want the government to allow shareholders to file class-action suits."
There are other champions of shareholder rights in Asia Hong
Kong's David Webb comes to mind. But Jang's PSPD is the most extensive
and best organized. It boasts some 2,000 volunteers, many of them
corporate lawyers and accountants. "We are not radicals," says Jang,
who has a doctorate in finance from the University of Pennsylvania's
Wharton School. "What we are demanding is nothing more than what
is being practiced elsewhere in the world by good companies." The
PSPD is bringing its campaign to a new level. It plans to establish
a center that will rate the governance practices of every listed
company in Korea. "By the end of the year," adds Jang, "I will set
up a network of interested parties in Asia to improve shareholders'
rights." The queue starts here.
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