[생글기자 코너] Foreign Investors and Domestic Corporate Governance

Black Rock is known to have an average of 5 to 7 percent stake in large Korean companies(Samsung, Hyundai, SK).

The Korean stock market is the very popular invisible market to buy and sell stakes of companies listed on KOSPI and KOSDAQ. The subjects who purchase stocks are divided into various categories such as individuals, institutions and foreigners. Among these players, foreign investors account for one third.

This has the advantage of foreign capital flowing into the country, but the dependence on foreign capital increases as the share of stakes increases, which can eventually become a huge shadow of the financial market as a whole. If the proportion of foreign capital increases gradually, major shareholders among foreigners will be able to demand excessive management control or control domestic companies.

A representative example of this is Black Rock, an asset management company in the United States. Black Rock is known to have an average of 5 to 7 percent stake in large Korean companies(Samsung, Hyundai, SK).

This means that Black Rock has the authority to sway the important decisions of large domestic companies, so that the companies can be restricted from their activities at certain times.

Institutional devices such as strengthening fair trade and investment in pension funds will be needed in order to prevent management disputes due to an increase in the proportion of foreigners.

이건희 생글기자(조암중 3년)