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Corporate Cleanup in South Korea Fails to Impress Foreign Funds

  • Korean firms remain weak in M&A logic, director independence
  • ROE on Kospi members fell to 3.2% from 4.3% at end-2019
The Kospi Index Dropping For The Third Day As Korea Virus Cases Top 2000
Photographer: SeongJoon Cho/Bloomberg

Ever since President Moon Jae-in came into power three years ago, South Korea has been trying to reduce its reputation for having a stockmarket dominated by family controlled conglomerates that lack accountability. Fund managers say efforts so far have failed.

One reason for the lack of real change: Many companies seem to view corporate governance as a “box ticking” exercise, said Ronnie Lim, an engagement specialist who handles active and sustainable investments at Robeco, a long-only firm with 155 billion euros ($182 billion) assets under management .