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Governance reform of coperation financial institutions in Korea

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Frame of Image orate governance mechanism of CFIs should be designed to maximize stakeholders’ interests, and measures should be sought to strengthen internal control and enhance monitoring role of board of directors.
while change or aboli on of regula ons, business policy, asset disposal and financing decisions are made at board mee ngs. Meanwhile, the ownership and vo ng structure of CFIs make it hard to ensure effec ve monitoring of business prac ces in nature. A credit union’s capital is a sum of members’ investments; the maximum contribu on that a single member can make is 10/100 of a total number of accounts. Regardless of the number of accounts, members have equal vo ng rights, which set CFIs apart from other corpora ons and financial ins tu ons where vo ng rights can be concentrated on a few shareholders. The downside is that ownership and vo ng rights are spread widely that they o en lack effec ve monitoring over management efficiency or risk management. Other companies are not free from the risk of monitoring failure, but, they s ll have the market to watch over them; especially, the market monitoring is quite strong for listed companies. The ul mate goal of a corpora on is to maximize shareholder value, and to this end, corporate governance of financial ins tu ons aims to ensure checkand-balance over whether the management makes decisions that maximize shareholder value. In addion, as for banks, the interest of the government, general public and the society at large should be carefully


Full Text
Title Governance reform of coperation financial institutions in Korea
Similar Titles
Material Type Reports
Author(English)

Lee, Si-Yeon

Publisher

Korea Institute of Finance

Date 2013-06
Journal Title; Vol./Issue KIF Weekly Financial Brief:13/23
Pages 2
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Economic System
Holding Korea Institute of Finance