The expansion of outside directorate in Korea: agency control, resource dependency, and neo-institutional perspectives

Yong Suk Jang, Hang Young Lee, KyungMin Baek

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This paper explores the expansion of outside directorate in Korean corporations, analyzing workplace survey data collected by the Korea Labor Institute(KLI). The previous literate on this issue empathizes how the changing legal environments of Korean business affect the aspect of controlling corporate agencies, executive officers. The results of this study reconfirm that Korean corporations appoint more outside directors to monitor and control managers. Drawing on resource dependency and neo-institutional perspectives, we argue that other significant factors also increase the size of outside board. A company may recruit more outside directors to decrease resource uncertainty and dependency as well as to acquire more legitimacy from the environments. There exist different dynamics of appointing outside directors between listed and unlisted corporations. Listed companies hire outside board members and attempt to attract fundings from foreign shareholders. In contrast, unlisted corporations recruit outside directors while conforming to the business norms and guidelines. We conclude that functional requirements affect the expansion of outside directorate in listed corporations and institutional factors guide unlisted corporations to appoint more outside directors.
Translated title of the contributionThe expansion of outside directorate in Korea: agency control, resource dependency, and neo-institutional perspectives
LanguageKorean
Pages27-66
Number of pages40
JournalKorean Journal of Sociology
Volume41
Issue number2
Publication statusPublished - 2007
Externally publishedYes

Fingerprint

Institutional perspective
Korea
Resource dependency
Outside directors
Institutional factors
Legal environment
Uncertainty
Survey data
Resources
Legitimacy
Labor
Funding
Listed companies
Factors
Work place
Managers
Shareholders

Keywords

  • outside board directors
  • agency control
  • resource dependency
  • neo-institutionalism
  • co-optation
  • business norm
  • legitimacy

Cite this

Jang, Yong Suk ; Lee, Hang Young ; Baek, KyungMin. / 한국기업의 사외이사 선임 : 조직이론적 접근. In: Korean Journal of Sociology. 2007 ; Vol. 41, No. 2. pp. 27-66.
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abstract = "This paper explores the expansion of outside directorate in Korean corporations, analyzing workplace survey data collected by the Korea Labor Institute(KLI). The previous literate on this issue empathizes how the changing legal environments of Korean business affect the aspect of controlling corporate agencies, executive officers. The results of this study reconfirm that Korean corporations appoint more outside directors to monitor and control managers. Drawing on resource dependency and neo-institutional perspectives, we argue that other significant factors also increase the size of outside board. A company may recruit more outside directors to decrease resource uncertainty and dependency as well as to acquire more legitimacy from the environments. There exist different dynamics of appointing outside directors between listed and unlisted corporations. Listed companies hire outside board members and attempt to attract fundings from foreign shareholders. In contrast, unlisted corporations recruit outside directors while conforming to the business norms and guidelines. We conclude that functional requirements affect the expansion of outside directorate in listed corporations and institutional factors guide unlisted corporations to appoint more outside directors.",
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한국기업의 사외이사 선임 : 조직이론적 접근. / Jang, Yong Suk; Lee, Hang Young; Baek, KyungMin.

In: Korean Journal of Sociology, Vol. 41, No. 2, 2007, p. 27-66.

Research output: Contribution to journalArticleResearchpeer-review

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T1 - 한국기업의 사외이사 선임

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AB - This paper explores the expansion of outside directorate in Korean corporations, analyzing workplace survey data collected by the Korea Labor Institute(KLI). The previous literate on this issue empathizes how the changing legal environments of Korean business affect the aspect of controlling corporate agencies, executive officers. The results of this study reconfirm that Korean corporations appoint more outside directors to monitor and control managers. Drawing on resource dependency and neo-institutional perspectives, we argue that other significant factors also increase the size of outside board. A company may recruit more outside directors to decrease resource uncertainty and dependency as well as to acquire more legitimacy from the environments. There exist different dynamics of appointing outside directors between listed and unlisted corporations. Listed companies hire outside board members and attempt to attract fundings from foreign shareholders. In contrast, unlisted corporations recruit outside directors while conforming to the business norms and guidelines. We conclude that functional requirements affect the expansion of outside directorate in listed corporations and institutional factors guide unlisted corporations to appoint more outside directors.

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KW - resource dependency

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KW - co-optation

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