Men of Honor: Military CEOS and Directors in Korea

57 Pages Posted: 18 May 2017

See all articles by Hyun-Dong Kim

Hyun-Dong Kim

Graduate School of International Studies, Sogang University

Ji Yeol Jimmy Oh

Hanyang University

Kwangwoo Park

KAIST (Korea Advanced Institute of Science and Technology) - College of Business

Date Written: May 18, 2017

Abstract

In this paper, we examine whether the presence of ex-military board directors affects firms’ financial policies and ethical behavior in Korea, a country where the military has a unique historical role in society. Despite prolonged exposure to military rule during their formative years, firms with ex-military-officer CEOs and inside directors are substantially less likely to commit corporate fraud. Moreover, the positive association between Chaebol business groups and fraud is significantly weakened in the presence of ex-military directors. These managers and insiders also adopt more conservative managerial policies in normal times but take more risks during crisis periods. However, when these directors are appointed primarily for external networking purposes, their presence has little effect on a firm’s corporate policies or ethical behavior. Thus, a director with exposure to military values does appear to enhance corporate ethics, but only when he holds an appropriate position to do so.

Suggested Citation

Kim, Hyun-Dong and Oh, Ji Yeol Jimmy and Park, Kwangwoo, Men of Honor: Military CEOS and Directors in Korea (May 18, 2017). Asian Finance Association (AsianFA) 2017 Conference. Available at SSRN: https://ssrn.com/abstract=2970696 or http://dx.doi.org/10.2139/ssrn.2970696

Hyun-Dong Kim (Contact Author)

Graduate School of International Studies, Sogang University ( email )

Seoul, 04107
Korea, Republic of (South Korea)

Ji Yeol Jimmy Oh

Hanyang University ( email )

Seoul
Korea, Republic of (South Korea)

Kwangwoo Park

KAIST (Korea Advanced Institute of Science and Technology) - College of Business ( email )

85 Hoegiro
Seoul 02455
Korea, Republic of (South Korea)
82-2-958-3540 (Phone)
82-2-958-3604 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
45
Abstract Views
757
PlumX Metrics