• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.383-390
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• 2021

This study investigates the effect of shareholders' rights, disclosure, and transparency on firm value. This study also investigates whether corporate social responsibility (CSR) is pure moderation or quasi moderation in the effect of shareholders' rights, disclosure, and transparency on firm value. This study's novelty is building a model framework to increase firm value and the role of CSR in increasing firm value. This study used secondary data provided by Indonesia, Malaysia, and Thailand Stock Exchanges. The sample of this study is 142 companies with four years of observations from 2012-2015. Firm value is measured by Tobin's Q. While shareholder's rights, disclosure, and transparency are measured using the ASEAN scorecard. The analysis method used in this study is a fixed effect model using a panel data approach. The result of this study shows that shareholders' rights have a significant positive effect on firm value. However, disclosure and transparency do not affect firm value significantly. In comparison, the CSR disclosure has a moderation effect on the relationship between shareholders' rights and firm value. The CSR disclosure does not have a moderation effect on the relationship between disclosure and transparency and firm value.

• KDI Journal of Economic Policy
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• v.39 no.3
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• pp.63-98
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• 2017

This paper investigates the sales process of treasury stocks, while most previous research studies treasury stock repurchases. The sales of treasury stocks are an important measure to protect management rights only in Korea, as Korea's laws and systems allow treasury stock sales according to the board's resolution and not by the decisions made at the general shareholders' meetings. The board's resolution, which considers the owner-manager's interest on management rights, can cause damages to small shareholders. Considering (i) the economic characteristics of treasury stocks, (ii) other countries' institutions and experiences, (iii) a theoretical assessment of the possibility of small shareholder losses, and (iv) lessons from Korea's actual instances, Korea's present system should be corrected at least in the mid and long term. Even in the short-term, rules pertaining to sales enacted by the board's resolution inducing small shareholder losses should be overhauled. The autonomous discipline by various stakeholders could be an ideal measure by which to monitor ownermanager's decisions. In addition, temporary intervention measures, such as government examinations, could be implemented to protect small shareholders.

• Journal of the Korea Convergence Society
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• v.10 no.8
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• pp.217-226
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• 2019

This study examines the effect of the wedge between voting rights and cash flow rights of controlling shareholders on the implied cost of equity. Prior studies posit that controlling shareholder's voting rights exceeding cash flow rights causes expropriating minority shareholders. Using date from 793 group-affiliated Korean firms for 10 years from 2005 to 2016, the result shows that there is a positive and significant relationship between controlling shareholders' wedge and implied cost of equity. This result implies that investors regard the controlling shareholders' wedge as potential agency cost in which they require additional risk premium because controlling shareholders have a strong incentive to pursue their private interests trough tunneling practices.

• The Journal of Industrial Distribution & Business
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• v.9 no.7
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• pp.53-59
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• 2018

Purpose - This study examines the effect of control-ownership wedge on stock crash risk. In Korea, controlling shareholders have exclusive control rights compared to their cash flow rights. With increasing disparity, controlling shareholders abuse their power and extract private benefits at the expense of the minority shareholders. Managers who are controlling shareholders of the companies tend not to disclose critical information that would prevent them from pursuing private interests. They accumulate negative information in the firm. When the accumulated bad news crosses a tipping point, it will be suddenly released to the market at once, resulting in an abrupt decline in stock prices. We predict that stock price crash likelihood due to information opaqueness increases as the wedge increases. Research design, data, and methodology - 831 KOSPI-listed firm-year observations are from KisValue database from 2005 to 2011. Control-ownership wedge is measured as the ratio (UCO -UCF)/UCO where UCF(UCO) is the ultimate cash-flow(control) rights of the largest controlling shareholder. Dependent variable CRASH is a dummy variable that equals one if the firm has at least 1 crash week during a year, and zero otherwise. Logistic regression is used to examine the relationship between control-ownership wedge and stock price crash risk. Results - Using a sample of KOSPI-listed firms in KisValue database for the period 2005-2011, we find that stock price crash risk increases as the disparity increases. Specifically, we find that the coefficient of WEDGE is significantly positive, supporting our prediction. The result implies that as controlling shareholders' ownership increases, controlling shareholders tend to withhold bad news. Conclusions - Our results show that agency problems arising from the divergence between control rights and cash flow rights increase the opaqueness of accounting information. Eventually, the accumulated bad news is released all at once, leading to stock price crashes. It could be seen that companies with high control-ownership wedge are likely to experience future stock price crashes. Our study is related to a broader literature that examined the effect of the control-ownership wedge on stock markets. Our findings suggest that the disparity is a meaningful predictor for future stock price crash risk. The results are expected to provide useful implications for firms, regulators, and investors.

• Journal of Information Technology Services
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• v.19 no.3
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• pp.101-115
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• 2020

Electronic voting is one of information technology service to handle a wide range of functions, including registration, certification, input and results of voting, using electronic technology, depending on the degree of automation. It helps voters exercise their voting rights not only for individual suffrage but also for major corporate decisions as shareholders by expressing their opinions regardless of geographical and time constraints. Such electronic voting helps open and expand voting participation, but on the contrary, it is possible to identify who voted and what kind of vote, such voting cannot guarantee confidentiality. Therefore, if blockchain technology is applied to electronic voting, it can increase the speed of processing and confidentiality by encrypting voting information. In this regard, the study aims to identify institutional issues on how electronic voting can be activated at a company's shareholders' meeting, and to find ways to overcome the limitations of existing electronic voting by utilizing the technical characteristics of blockchain. This study proposes a consortium-type blockchain-based electronic voting system to enhance the convenience and reliability of electronic voting for shareholders' meetings. In addition, this paper suggests how to enhance shareholders' profits through electronic voting at shareholders' meetings, as well as its policy measures and future improvements.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.14 no.11
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• pp.5434-5441
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• 2013

Using longitudinal data of 575 sample from 122 firms in large business conglomerates from 2001 to 2008, this study examines the impact of controlling shareholders' control-ownership disparity on executive compensation. The empirical study finds that controlling shareholders' control-ownership disparity is negatively related to the level of executive compensation and moderate negatively the relation between firm performance and executive compensation. This finding suggests that controlling shareholders' control rights in excess of ownership rights lead to decreased executive compensation in order to relieve the concerns of stakeholder about the potential agency costs of controlling shareholder, and have, on the other hand, entrenchment effects on the decision of executive compensation by decreasing its sensitivity on firm performance.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.12 no.12
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• pp.5558-5563
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• 2011

Using longitudinal data of 108 firms in large business conglomerates from 2001 to 2009, this study examines the impact of controlling shareholders' control-ownership disparity on R&D investment. The study finds that control-ownership disparity is negatively related to R&D intensity. This empirical result suggests that controlling shareholders' control rights in excess of ownership rights incent controlling shareholders' expropriation for their private interests, leading to decreased R&D investment which enhances firm value in the long term.

• Journal of Distribution Science
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• v.15 no.4
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• pp.5-13
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• 2017

Purpose - This research analyzes the effects of Korean family ownership characteristics on firm value. The positive and negative effects of family ownership on Korean firm value were analyzed. If negative effects are evident, this research explores the factors that cause a decrease in firm value. Research design, data, and methodology - The study examined a total of 5,743 companies listed on the Korea Exchange from the period 2002 to 2012 using a panel data regression analysis. Result - An empirical analysis suggests that Korean family ownership diminishes firm value. Korean family firm value has been reduced when controlling shareholders are participated in management and pursue excessive wages, or make the management entrenchment effects associated with ownership-control disparity. When the controlling shareholders of family firms have increasing control rights over the shareholders' general meeting and the directors' board, the agency costs associated with seeking increasing executive wages or private benefits reduce firm value. Conclusions - This study has significance because it reveals the negative effect of family ownership in Korea on firm value. These negative effects can be the result of agency problems from controlling family shareholders seeking excessive wages or ownership-control disparity.

• Journal of Arbitration Studies
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• v.11 no.1
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• pp.75-93
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• 2001

The advantages of arbitration such as promptness, economy and flexibility apply to the disputes arising from corporate governance between shareholders and a corporation. The confidentiality of arbitration can be particularly highlighted in the disputes among the members inside corporation. But it appears that the shareholders believe litigation the best way to pursue liabilities of managers of corporation and improve the system of corporate governance. And it is claimed that the current litigation system lacks the implementation of shareholders rights due to structural deficiency and therefore need bring class actions into the system of Korean jurisprudence. The OECD, which afforded the rescue finances to Korea, also recommended shareholder class actions as a way to improve corporate governance. Class actions have merits but even advanced countries consider the changes of existing system or only stay class actions in the stage of discussion. Rather, legal experts urge arbitration to be used more frequently and the Courts also approved the dispute resolutions of the disputes as to corporate governance through arbitration. There is no report in Korea that arbitration was used to resolve the disputes between shareholders and the managers, or between shareholders and corporation, which is listed in the Stock Market. There only are the debates for bring class actions into the judicial system between NGOs and the organizations of corporate managers. But arbitration has greater advantages in resolving the disputes among the members of corporation that any other methods for dispute resolution. Arbitration can interpret flexibly the mandatory provisions of the Statutes of Security and the Code of Commerce to meet the needs of parties involved, which is not possible to the Courts. Arbitration can issue the award to meet the equity of the parties. And arbitration can avoid a resolution of All or Nothing by fully considering the specific situations of Korean corporations(such as family-dominated management) and can issue the award beneficial to all parties of shareholders, managers and corporation. Thus it should be sought to resolve the disputes as to corporate governance through arbitration.

• Industry Promotion Research
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• v.9 no.3
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• pp.1-11
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• 2024

At shareholders' meetings, minority shareholders are inferior in information to owners and majority shareholders, and they are often excluded from important decision-making. As a result, the rights and interests of minority shareholders are often damaged, which acts as a factor that hinders corporate value. The electronic voting system is expected to encourage minority shareholders to participate in management decision-making, which is expected to help increase corporate value. The results of the analysis in this study are summarized as follows. First, it was found that there was no difference between the earnings persistence of companies that introduced the electronic voting system and the earnings persistence of companies that did not. Second, we found no evidence that the introduction of the electronic voting system would increase the value of firms. Third, the effect of earnings persistence on corporate value of companies that adopted the electronic voting system was no different from that of firms that did not adopt it.