The Nordic Model Revisited: Rethinking Controlling Shareholder Succession and Corporate Governance Reform in Korea

iCourts Lunch Seminar with Jeemin Song, Kyonggi University, South Korea. 

Corporate governance reform in South Korea has long been driven by the conflicts between controlling shareholders and minority shareholders, particularly during intergenerational transfers of corporate control. Many of Korea's most controversial corporate scandals have arisen from succession planning within family-controlled business groups, where controlling shareholders have been accused of using corporate resources and intra-group restructurings to facilitate succession while extracting private benefits. The 2015 Samsung C&T–Cheil Industries merger remains the most prominent example, ultimately leading Samsung Chairman Jay Y. Lee to announce in 2020 that he would not transfer managerial control to his children.

These recurring conflicts have recently culminated in the 2025 amendment to the Korean Commercial Code, which expanded directors' duty of loyalty to require directors to protect the interests of all shareholders rather than the company alone. While this reform represents a significant shift toward stronger minority shareholder protection, it primarily addresses the symptoms of Korea's corporate governance problem rather than its underlying institutional causes. If conflicts surrounding corporate succession continue to arise, a more fundamental question remains: how should long-term controlling ownership itself be governed? This paper argues that the Korean debate should move beyond the traditional dichotomy between controlling shareholders and minority shareholder protection. Rather than asking how family control should be constrained, it asks how long-term controlling ownership can be institutionalized in a manner that is both legitimate and publicly accountable.

Against this backdrop, the paper revisits the Nordic corporate governance model. Unlike Korea, Nordic countries have developed institutional mechanisms that preserve long-term control while mitigating the governance risks traditionally associated with concentrated ownership. Danish industrial foundations, the Wallenberg ownership structure in Sweden, and broader Nordic governance practices illustrate how stable controlling ownership can coexist with transparency, stakeholder participation, and social responsibility. These models attracted considerable attention in Korea during the early 2000s, particularly throughout debates surrounding corporate succession, yet scholarly interest has largely subsided in recent years.

The primary objective of this seminar is not to advocate legal transplantation, but to introduce Korea's recent corporate governance reforms to a Nordic audience and invite comparative discussion on whether the Nordic experience offers broader institutional lessons for addressing Korea's succession-related governance challenges. By engaging with Nordic scholars, the paper seeks to explore governance arrangements that preserve entrepreneurial vision while enhancing legitimacy, stakeholder trust, and long-term corporate sustainability.