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- Title
- Journal of Regulation Studies 2002 Vol.11 No.11. Whether the Cumulative Voting Technique Should Be Adopted by All Kinds of Corporation : A Critical Review
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- Author
- Jae Yeol Kwon
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- Subject
- Corporate/Industrial Policy, Deregulation
- Publish Date
- 2002.06.29
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- File
- -
- View Count
- 10325
Shareholders are the corporation's residual claimants whose interests are superior to all others, retaining the ultimate authority to control the corporation. Since Korea got financial assistance from the International Monetary Fund, many kinds of new corporate and economic rules have been introduced to Korea. Among them, cumulative voting techniques has been incorporated into Korean law with the purpose of the protection of minority shareholders. However, it is possible for them to be in conflict with the majority rule, a longstanding rule in corporate governance.
Minority shareholders are in a position to exit with low cost and thus do not have the biggest stake in the outcome of corporate decision-making. If Korean law asks all kinds of corporation to mandatorily adopt the cumulative voting technique for the election of directors, the stability of corporate management will be in jeopardy. Whether the technique is to be adopted or not should be at the disposal of individual corporations.
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