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Concentrated Ownership and Corporate Control: Wallenberg Sphere and Samsung Group

Journal of Korean Law 14, no. 1 (2014): 39-59.

U of Michigan Law & Econ Research Paper No. 14-015

21 Pages Posted: 7 Jul 2014 Last revised: 5 May 2016

Hwa-Jin Kim

Seoul National University School of Law; University of Michigan Law School

Date Written: 2014

Abstract

Samsung Group’s success cannot be attributed to its corporate governance structure, at least thus far. The corporate governance of Samsung has been rather controversial. As the group faces the succession issue the corporate governance has become as crucial as their new products and services. Samsung has discovered a role model on the other side of the planet, Wallenberg Sphere in Sweden. Much effort has been made to learn about Wallenberg’s arrangements and key to its success. However, a fundamental difference between the institutions in Sweden and Korea has made the corporate structures of the two groups radically different. Wallenberg uses the dual-class commons whereas Samsung relies upon the circular shareholdings through affiliated firms. This Essay explains and analyzes the two different institutions and corporate structures, and argues that the introduction of the dual-class commons in Korea would make the corporate governance of Samsung more transparent and efficient, if and only if accompanied by Samsung’s commitment to socially responsible corporate citizenship. This Essay also explains and analyzes the recent developments in corporate governance of non-banking financial institutions in Korea and looks into the issue from the perspective of Samsung’s structure in comparison with Wallenberg’s structure.

Keywords: Samsung Group, Korea, Wallenberg Sphere, Sweden, corporate governance, control, ownership, financial institutions

JEL Classification: K2, K22

Suggested Citation

Kim, Hwa-Jin, Concentrated Ownership and Corporate Control: Wallenberg Sphere and Samsung Group (2014). Journal of Korean Law 14, no. 1 (2014): 39-59.; U of Michigan Law & Econ Research Paper No. 14-015. Available at SSRN: https://ssrn.com/abstract=2463272 or http://dx.doi.org/10.2139/ssrn.2463272

Hwa-Jin Kim (Contact Author)

Seoul National University School of Law ( email )

San 56-1 Kwanak-gu, Shilim-dong
Seoul
Korea

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

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