The Best Advocate of Shareholders' Rights

Seokyong Lee - Black Star for Asiaweek. After successes in Korea, Jang will set up an Asian network for good corporate governance.

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."

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.

— Laxim Nakarmi

Write to Asiaweek at mail@web.asiaweek.com