1997년 외환 위기 이후 한국과 영국의 공기업 개혁은 효과적이었는가?

공기업 지배구조 측면에서 한국과 영국, OECD 가이드라인의 비교분석 -

2023년 7월

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1. 국외훈련개요 --------------------------------------------------------------------------------   3

2. 훈련성과보고서 요약서 -------------------------------------------------------------------   4

3. 한글요약서 ------------------------------------------------------------------------------------   5

4. 훈련성과보고서 원본(영문) ---------------------------------------------------------------  17

Introduction	22

Changes in Public Management Paradigm and SOEs	24

A Comparative Analysis of the Public Management Paradigm in ROK	28

OECD Guidelines on Public Corporate Governance and Comparative Case 39

Current status and Policy Recommendations for the Republic of Korea	49

Conclusion	57

Bibliography	59

국외훈련 개요

1. 훈 련 국: 영국

2. 훈련기관명: 요크대학교(The University of York)

3. 훈련분야: 기획행정

4. 훈련기간: 2021. 8. 2. ~ 2023. 8. 1.

훈련성과보고서 요약서
성 명	이혜진	파견연도	2021
훈련분야	기획행정
훈련과제	지방공공기관의 경영자율성 및 책임성·공공성 강화로 신뢰를 구축하고 이를 기반으로 지속가능한 발전방안 연구
훈 련 국	영 국
훈련기관	The University of York
보 고 내 용
제 목	1997년 외환 위기 이후 한국과 영국의 공기업 개혁은 효과적이었는가? 공기업 지배구조 측면에서 한국과 영국, OECD 가이드라인의 비교분석 -			보고서 매수	72
내용요약	역사적인 공공관리 패러다임의 변화에도 불구하고 공기업들은 여전히 여러 국가에서 핵심적인 공공서비스의 공급자이다. 공기업은 공공관리 패러다임의 변화에 따라 효율성 또는 공공성을 중심으로 지속적인 혁신을 추진하였음에도, 여전히 개혁의 대상이자 부패의 매개체라는 광범위한 우려가 존재한다. 이 연구는 지난 25년간 열성적으로 공공기관개혁을 추진해 온 한국의 성과와 지배구조를 체계 분석하고 더 나은 성과를 위한 지배구조 개편안에 대한 정책적인 제안을 한다 이를 위해 우선, 공공관리 패러다임의 변화과정과 공공기관 개혁에 미친 영향을 바탕으로 역대 행정부의 성과를 비교 분석하였다. 이를 바탕으로 공기업의 구조적 제약조건에서 발생하는 비효율성을 극복하기 위한 좋은 공공 협력 거버는스의 필요성을 도출한다. 이후 OECD 가이드라인과 영국의 사례를 바탕으로 시사점을 도출한다. 한편으로는 외부governance 측면에서는 Committee of PI의 위상과 운영 개선방안을 제안하여 소유권 기구의 독립성과 전문성을 확보할 수 있도록 한다. 다른 한편으로는 내부 거버넌스 측면에서 공기업의 이사회의 구성과 운영 개선을 제안하여 이사회의 투명성과 책임성을 확보할 수 있도록 한다.

< 한글 요약본 >

서론

국가소유공기업은 20세기 대부분에 걸쳐 세계적으로 규모와 중요성이 커졌다. 프랑스, 독일, 이탈리아, 스페인, 영국 등 서유럽권의 정부들은 1900년대 초에 주요 산업을 국유화하기 시작했다 (IMF, 2020). 이러한 경향은 제2차 세계대전 이후 중부 및 동유럽에서 시작되어 1950년대와 1960년대에 이어 아프리카와 아시아에서 계속되었다 (Allen and Vani, 2013; Musacchio and Lazzarini, 2014). 1980년대 초반까지 공기업은 평균적으로 선진국에서는 생산량의 8%, 개발도상국에서는 15%를 차지했다 (Sheshinski and Lopez-Calva, 2003). 공기업의 비효율성에 대한 비판이 커지던 1980년대 초 이후에는 많은 국가에서 신공공관리론(NPM) 패러다임을 중심으로 효율성이 강조되면서 민영화를 통해 공기업에 경제적 이윤 동기를 도입하려는 시도가 이어졌다 (Lee, 2008: Park and Park, 2011: Kim, 2014)

그러나 여전히 여러 국가에서 공기업은 공익사업을 비롯하여 핵심적인 공공서비스의 중요한 공급자이다. 이러한 공기업의 운영이 시민들의 일상생활과 다른 모든 경제 분야의 경쟁력에 영향을 주고 있다. IMF(2020)에 따르면, 지난 10년 동안 세계 2,000대 기업 중 공기업 자산이 차지하는 비중은 20%로 두 배 증가하였다. 2018년 공기업 자산은 45조 달러로 세계 GDP의 50%에 해당한다. 공기업은 주요 선진경제에서 총 경제활동에 1~2%, 일부 국가의 경우에는 30%를 차지하고 주요 기간 산업을 담당하고 있어 경제적 중요성이 매우 크다 (OECD, 2020).

공기업은 혼합적 조직이다. 기업으로서 자신이 생산한 산출물을 판매하면서 다양한 시장의 압력을 받는 한편, 공조직으로서 정부나 그 대리인에 의해 소유되고 통제를 받는다(Jones, 2009). 따라서 많은 정부가 공기업을 효과적으로 관리하기 위해 고군분투하고 있음에도 많은 공기업이 비효율적이고 정부 예산에 상당한 위험을 수반하며 부패의 매개체라는 광범위한 우려가 존재한다 (IMF Fiscal Monitor, 2019. 4월: OECD 2018b).

한국은 1997년 외환위기 이후 공기업 개혁을 열성적으로 추진하고 있는 나라 중에 하나로, 2013년 11월 박근혜 행정부의 경제부총리는 “공공기관, 파티는 끝났다” 며 과다한 부채 문제와 방만경영을 질타하며 고강도 자구노력을 요구하였다 (연합뉴스 TV, 2013). 이로부터 9년이 흐른 지난 2022년 6월 윤석열 행정부의 경제부총리도“공공기관, 파티는 끝났다”고 지적하며 효율성 및 생산성 향상과 자산매각 등의 고강도 자구노력을 요구하였다 (국민일보, 2022).

한국은 5년 단임제 대통령제로 행정부가 교체될 때마다 “공공기관 개혁 또는 혁신”은 늘 화두였고 정권 초기에는 연례적으로 공기업 개혁계획을 발표하고 있다. 그러나 2022년 6월 조세연구원이 일반국민과 공기업 종사자, 전문가 등 1,4500여명을 대상으로 실시한 설문조사에 따르면, 일반 국민의 63.8%, 전문가의 64.9%가 한국의 Public institutions 방만경영이 심각하다고 답했고, 일반 국민의 71.8%, 전문가의 77.3%는 강도 높은 개혁이 필요하다고 응답하였다. 역대 행정부의 노력에도 불구하고 공기업 개혁은 큰 성과를 거두지 못하여 여전히 신뢰도가 낮고 개혁의 필요성에 대한 요구가 높다 (송양호, 2016).

이 연구는 공기업 개혁과 지배구조 체계를 분석하고 더 나은 성과를 위한 지배구조 개편안에 대한 정책적 제안을 하는 것을 목표로 한다.

2. 공공관리 패러다임의 변화와 공기업 혁신: 공기업에 대한 사회적 인식 변화의 흐름

공기업은 정부의 공공관리 패러다임이 어떻게 변화하는가에 따라 기관운영은 물론 정부의 경영혁신에서도 매우 다른 결과를 얻을 수 있기 때문에 이에 대한 이해가 필수적이다 (Woo, 2021). 1980년대 이후 서구학자들은 공기업 및 행정기관 등의 공공부문도 민간기업과 같은 관리개혁이 필요하다고 주장하면서 여러 가지 경쟁적 방식을 통하여 성과주의, 투명성, 책임성을 강화할 것을 주문하고 있다 (Ra et al., 2018).

2.1. 신공공관리론(NPM)

NPM은 시장실패를 대응하기 위하여 커진 정부부문이 정부실패를 야기함에 따라 1980년대 이후 미국과 영국을 중심으로 일종의 정부혁신 패러다임으로 대두한 공공관리방안이다 (Terry, 1998). NPM의 핵심인 시장주의(Market orientation)는 공공 부문에도 시장경쟁 원리를 도입하여 정부의 독점적 공공서비스 제공을 민간과 경쟁하여 성과를 창출하도록 함으로써 고객만족을 이루려는 개념이다(우윤석, 2007).

NPM은 정부 관련 업무의 재창조(reinvention), 재구조화(restructuring), 재설계(re-engineering)를 통해 공공부문의 효과성 증대와 책무성(accountability) 확보를 추구한다(Boston et al., 1996). 성과와 책임, 고객지향성을 강조하면서 경쟁이 가능하도록 대규모 관료제 조직보다는 작은 조직이 효율적이라고 주장한다. 하지만 NPM에서는 ‘행정’을 정치적 가치를 반영하는 행위가 아니라 경영적 능률성을 충족시키는 행위라고 규정함으로써, 행정의 정치적 성향을 배제시키고 조직의 내적 관리방안에 치중하여 행정의 정치적 가치를 소홀히 하였다(Kim, 2000). 또한 공공 서비스에서는 경제적인 효율성보다는 질적인 측면을 더 중요시해야 하다는 비판이 제기되면서, 이를 극복하기 위한 여러 가지 대안적 접근들로 NPG와 NPS 등 후기 신공공관리론(Post-NPM)이 등장하였다 (Christensen and Laegreid, 2016).

2.2. 신공공거버넌스(NPG)

NPG는 Osborne(2006; 2010)이 제기한 것으로 관료제 중심의 전통적인 행정학이나 NPM과 달리 시민(citizen)을 중심으로 한다.

지배구조는 정부와 민간조직들 간의 신뢰를 기반으로 한 연계망을 통해 공공서비스를 공급하는 네트워크(지배구조 without Government)의 한 형태를 의미하며, 이러한 차원에서 국가와 시민, 정부와 민간, 조직과 시민사이의 관계망(Web of Relationships)이다 (Frederickson, 1999). Stoker(1998)는 지배구조는 ① 공공문제의 해결에 정부와 민간의 행위자와 조직이 모두 참여하고, ② 사회경제적 문제해결의 담당과 책임의 경계가 허물어지고 있고, ③ 집합적 행동에 관련된 당사자들 사이의 권력 의존관계를 중시하고, ④ 행위자들 간의 자율적인 네트워크가 존재하고, ⑤ 정부의 공식적인 권위에 의존하지 않고도 사회문제를 해결할 수 있다고 가정한다.

그러나, NPG는 지배구조에 중앙집권적인 통제가 없으므로 새로운 합의에 이르지 못하는 지배구조의 실패 발생가능성이 한계이다 (Jessop, 2000). 즉, 책임 없는 주체가 참여하여 사익을 공익으로 위장할 위험이 있고, 정부의 공식적인 개입이 없으므로 일반적인 사회문제 해결에 적용하기 어렵다. 지배구조 참여자들 간 정보나 권력의 불평등(Bae, 2005), 정부가 참여라는 명분하에 오히려 계층제를 강화하거나 정경유착 도구로 활용할 가능성(Jouve, 2005), 부패발생 가능성(Na, 2006), 행위자들의 업무성과 측정 불가(Kramer, 1994)하다는 점이 지배구조 실패로 이어질 수 있다.

2.3. 신공공서비스론 (NPS)

NPS는 정부의 역할이 봉사 내지 공공서비스 그 자체라는 점을 강조하면서 NPM에서 말하는 정부 주도의 방향잡기(steering)가 아니라 사회구성원을 통합하는 상호작용이 중요하다고 한다(Denhardt and Denhardt, 2003).

Denhardt and Denhardt(2015)는 다음과 같은 7가지를 NPS의 핵심 내용으로 제시한다.

고객이 아닌 시민에게 봉사(Serve Citizens, Not Customers)

공공이익의 추구(Seek the Public Interest)

기업가 정신이 아니라 시민권의 중시(Value Citizenship over Entrepreneurship)

전략적 사고와 민주적 행동(Think Strategically, Act Democraticlly)

책무성의 중요성 인식(Recognize that Account-ability Isn’t Simple)

방향제시보다 봉사(Serve Rather than Steer)

생산성이 아니라 사람 중시(Value People, Not Just Productivity)

그러나, NPS가 가정하는 공직자나 시민의 역할이 이상주의에 치우쳐 있기 때문에 민주적 규범이나 공동체 가치를 지나치게 강조하여 효율성이나 전문성을 소홀히 한다는 비판이 받았다 (Woo, 2008).

3. 한국의 공공관리 패러다임과 공공기관 개혁

3.1. 한국의 공공기관

공공기관은 정부가 국민에게 공공 서비스를 제공하기 위해 설립한 기관으로 정부의 직접적인 혹은 간접적인 재정적 지원을 받는다. 한국에서는 설립주체에 따라 중앙공공기관과 지방공공기관으로 구분하고, 2022년 기준 1,606개가 설립되어 운영 중이다 (알리오, 2022: 클린아이, 2022).

표 1. 대한민국 공공기관 현황

구 분	국가공공기관	지방공공기관	합계
공기업	36	411	447
준정부기관	94	845	1,159
기타 공공기관	220
합 계	350	1,256	1,606

자료출처: 알리오(2022), 클린아이(2022)

3.2.공공기관 개혁의 성과

역대 행정부의 공공기관 패러다임은 IMF 직후 시작된 김대중 행정부에서는 NPM, 노무현 행정부 시절은 NPM + 일부 NPG, 이명박 행정부 시절은 전통적인 NPM, 박근혜 행정부 시절은 NPM과 후기-NPM, 문재인 행정부는 NPG + NPS적 접근이었던 것으로 볼 수 있다 (Woo, 2021)

역대 행정부의 공공개혁의 성과에 대해서는 긍정적인 평가와 부정적인 평가는 엇갈리고 있다. 1997년 외환위기는 한국의 공공부문 개혁의 직접적인 계기가 되었고, 공공부문의 비효율성 제거를 위해 추진되었다 (woo, 2021). 최근에는 공공성 강화를 최우선으로 기존의 정책이 공공기관의 비대화를 불러왔다고 판단하여 다시 생산성과 효율성을 제고하기 위한 강도높은 개혁을 예고하고 있다 (기획재정부, 2022).

4. 공기업 지배구조에 대한 OECD 국제기준과 비교사례

4.1. 공기업 지배구조

일반적으로 기업지배구조는 기업이라는 경제활동의 단위를 둘러싼 여러 이해관계자들 간의 관계를 조정하는 메커니즘, 즉 기업의 경영을 감시, 규율하는 것 혹은 이러한 기능을 행하는 기구를 의미한다 (OECD, 2004: 이원희, 2014). 기업의 지배구조는 역사적으로 특별히 큰 규모의 사기업과 주식소유자의 관계에서 발달하였다 (Samuel, 2014). OECD(2004)는 단기적인 성과가 아닌 장기적인 안목으로써 기업지배구조를 바라볼 것을 요구할 뿐만 아니라 기업의 윤리경영 및 기업지배구조의 중요성을 언급하였다 (장덕조 and 이광규, 2017).

한편, 공공분야에서 공기업 지배구조는 ‘공기업의 경영의사결정을 하는 집행기구와 이를 감독·통제하는 시스템’을 의미한다. 외부지배구조인 소유권 측면에서 OECD(2005)에서는 국가별 공공 기관 설립과 소유근거의 차이와 소유권 기구의 다양성을 인정하고 있다.

OECD(2021)가 조사하여 발표한 52개국의 공기업 소유권 모델을 살펴보면, 소유권의 분산 정도에 따라 ① 중앙집중형 모델(Centralised model), ② 조정기관형 모델(Coordinating agency model), ③ 이중 트랙형 모델(Twin track model), ④ 분리 트랙형 모델(Separate track model), ⑤ 복수 소유권 모델(Dual model), ⑥ 분산형 모델(Decentralised model)로 구분한다.

내부지배구조는 공기업 내부의 경영 및 생산을 담당하는 주체는 누구이며 이들 간의 관계는 어떠한 가에 관한 것으로 주주총회, 이사회(최고의사결정기구), CEO(집행기구), 감사위원회 등을 둘 수 있다 (이주경, 이윤승, 2016).

4.2. OECD 공기업 지배구조 가이드라인

OECD 공기업 지배구조 가이드라인은 공기업이 효율적이고 투명하며, 책임감 있게 운영될 수 있도록 각국 정부에 제시한 권고안이다 (OECD, 2005: OECD, 2015). OECD는 2005년에 「OECD 공기업 지배구조 가이드라인」을 제정하여 공기업의 건전한 경영활동과 사업환경 조성을 위한 지배구조 권고안을 제시하였으며, 10년 후인 2015년에 변화된 사회환경을 일부 반영하여 개정판을 발간하였다 (OECD, 2005: OECD, 2015). 가이드라인은 공기업에 대한 소극적인 소유권 행사 또는 과도한 국가의 개입을 방지하기 위하여 각국 정부가 어떻게 국가의 소유권 기능을 행사하는 지에 대한 국제적으로 합의된 기준이다 (박한준, 2016)

이 가이드라인은 기본적으로 2004년에 발표된 OECD 기업 지배구조 원칙에 그 뿌리를 두고 있다. 다만 일반 사기업과는 다르게 공기업의 특수성을 고려하여 가이드라인을 제시하였는데, 이 가이드라인은 7개의 대원칙과 그에 대한 부차적인 설명으로 이루어져 있다 (OECD, 2015: KIPF, 2017: 장덕조 and 이광규, 2017).

국가의 공기업 소유 필요성(Rationales for state ownership)

주주로서의 정부의 역할(The state’s role as an owner)

공기업과 시장(State-owned enterprise in the marketplace)

주주평등대우(Equitable treatement of shareholders and other investors)

이해관계자 및 책임성있는 운영(Stakeholder relations and responsible business)

정보공개 및 투명성(Disclosure and transparency)

공기업 이사회의 책임(Disclosure and transparency)

4.3. 영국의 공기업 지배구조

영국에는 2022년 현재 수상(Prime Minister's Office)와 23개의 내각부처(ministerial departments)와 20개의 비내각부처(non-ministerial departments) 산하에 419개의 독립기관 및 Public institutions, 108개의 국가중요기관(high profile groups), 14개의 공기업(public corporations)이 있다 (UK Government, 2022).

영국은 2000년 이전까지는 효율성을 제고하기 위하여 사업별 개별 주무부처들이 소유권을 행사하는 제도인 분산적 소유권 모형이었다. 개별 공기업들의 경영목표 등은 주무부처(내각부처) 협의를 통해 설정하고 주무부처 장관들은 공기업 활동에 대해 의회에 보고할 의무를 지니며, 거의 모든 경우 장관들이 이사선임권을 행사하였다 (박석희, 2013). 2000년대 이후 공기업에 대한 소유권과 지배권을 집중하는 방향으로 일부 제도개선을 하였다. 감사원(National Audit Office, 2007)은 분산적 소유권 모형으로 인하여 개별 주무부처들이 광범위한 정책기능을 행하여 장기적인 적자가 발생하여 공기업의 주주가치가 침해되고, 경영 자율성이 약화된다고 비판하였다.

2010년 이후 보수당 집권 하에서 900여개에 이르렀던 공공기관들에 대해 민영화와 통･ 폐합을 지속적으로 단행했고, 이 과정에서 2003년에 내각사무처 산하에 설립된 공기업 소유권기구인 공기업실(Shareholder Executive)을 2011년에 기업혁신기술부(Department for Business, Innovation and Skills)로 이관하면서 공공기관들에 대해 전문적 자문과 조언을 제공하도록 역할을 재정비했다(박석희, 2021). 그럼에도 영국의 공공기관 관리체계는 여전히 분산형에 가까운 구조였는데, 2016년 4월에 국가지주회사인 영국정부투자공사(UK Government Investments; UKGI)이 출범하면서 변화하였다. UKGI는 공공기관 재무구조와 지배구조 개편을 목적으로 기존 공기업실과 재무부 산하의 영국재무투자공사(UK Financial Investments)가 통합하면서 설립되었다. 이에 따라 영국은 불가리아, 인도, 폴란드 등과 함께 전문적인 정부기관이 “조정기관”이 기술 및 운영상의 사안에 대해 다른 소유권 부처에 대한 자문 역할을 수행하고 공기업 경영성과를 모니터링하는 조정기관형 모델(Coordinating agency model)의 공기업 지배구조를 가지게 되었다 (OECD, 2020).

정부의 지분 관리와 기업 금융에 대한 전문성을 통합하기 위해 재무부(HM Treasury)가 100% 출자하여 2016년에 설립한 독립 기구인 UKGI는 영국 정부의 주요 자산관리자로서 일종의 국부펀드(SWF)와 같은 기능을 제공하고 있다 (Coyle and Muhtar, 2021). 공공기관 관리체계의 변화로 인해 UKGI는 2021년 기준으로 18개 산하 공기업에 대한 소유권 기능을 감독하고, 대규모 공기업의 매각 및 민영화를 주도한다. 또한 7개 주무부처들을 대신하여 소관 공공기관들(arm’s length bodies)에 대한 기능 행사를 지원하고 있다 (UKGI, 2022).

직원 비중을 기준으로 UKGI의 역할을 보면 지배구조 지원(36%), 국유자산매각 (14%), 재무투자 지원(41%), 우발부채 분석 및 자문(10%) 등을 중심으로 주무부처들의 소유권 기능을 지원한다 (UKGI, 2022). 재무부의 국고장관(Chancellor of the Exchequer)이 의회에서 UKGI의 활동에 대해 전반적 책임을 진다 (UK Government, 2022). 특히 UKGI는 재무부가 출자한 국가지주회사지만 영국기업지배구조규범에 따라 이사회의 경영 독립성과 책임성이 인정되며, 따라서 여러 공공기관들의 기업 운영, 재무적 투자, 국유자산 매각 등에 있어 주무부처들의 합리적인 소유권 기능 행사에 대해 재무부와의 협의를 토대로 전문적이고 독립적인 조언을 제공한다(UKGI, 2022).

한편, 영국의 공기업 이사회는 다른 유럽 국가들과 달리 감독과 관리가 통합된 형태로 운영되는 특징이 있다 (Yoon, 2016). 이사회의 구성 측면에서 영국에서는 이사회의 규모를 별도로 정하지는 않는다. 다만, 민간기업과 공기업 모두에 적용되는 ｢기업 지배구조 통합규범｣(Combined Code on Corporate Governance)에 따라 이사회의 과반수 이상을 독립적 이사로 구성하여야 한다 (OECD, 2021). 이사회는 다수의 이해관계자들로 구성되는데, 정부를 대표하는 이사는 비상임 1명이며, 대다수는 민간 전문가로 구성된다. 이사회 구성의 승인권은 정부에서 가지고 있다 (OECD, 2005).

OECD(2018)는 영국의 공기업 이사회 임명절차 OCPA(Office of Commissioner of Public Appointments)를 모범 사례로 소개하고 있는데 여기에서도 UKGI의 조정기능을 확인할 수 있다. 대부분 UKGI 산하 공기업은 공기업 주도적인 선임 절차로 이사를 임명하지만, UKGI 직원(일반적으로 공기업에 대한 UKGI 소유주인 비상임이사)도 면접관으로 참여한다. 또한 필요한 전문성이 있는 이사를 선발할 수 있도록 처음부터 이사직의 선발 기준 수립에 참여한다. 모든 이사 임명은 임명 과정이 기량과 자질에 근거하여 개방적이고 투명한 방식으로 운영되어야 한다는 것을 포함하는 ｢공직 임용에 대한 지배구조 규정｣에 명시된 원칙을 따라야 한다 (OECD, 2020: OECD, 2021).

영국은 국제 사회에서 계속해서 국영 기업(SOE)의 기업 지배 구조에 대한 모범 사례로 간주되고 있으며, 국제적으로 여러 나라에서 조언을 구하기도 하고 모범 사례를 도전하고 공유하며 OECD에서 주도적인 역할을 하고 있다 (UKGI, 2022). 영국은 또한 오랜 기간 확립된 제도적 구조와 무기력한 기관에 대한 감독 및 평가의 전통을 누리고 있다 (Coyle and Muhtar, 2021).

또한 UKGI는 10년 넘게 OECD의 WPSOPP(국가 소유 및 민영화 관행에 관한 작업반)에서 영국을 대표해 왔으며 연설 및 교육 행사에 참여할 수 있도록 UKGI 동료를 파견하는 등 다양한 방식으로 WPSOPP에 전문 지식과 지원을 제공하고 있다 (UKGI, 2022). UKGI는 공기업 소유권 및 지배구조에 관한 영국 사례와 데이터를 국제사회에 제공한다(UKGI, 2022). 특히 영국 정부의 Net Zero 의제의 경험을 바탕으로 기후 변화 및 저탄소 전환 정책과 관련하여 공기업이 취할 수 있는 역할에 대한 영국 고유의 노하우를 기여하고 공유한다는 점에서 높이 평가할 만 하다.

5. 한국의 공공기관 지배구조

5.1. 외부지배구조로서의 소유권 기구

한국은 2005년 OECD 공기업 소유지배구조 가이드라인 등에 따라 2007년 소관부처별로 가지고 있던 공기업 소유권 기능을 재정부서(기획재정부 산하 공공기관운영위원회) 중심으로 집중화하였다 (박석희, 2022). 한국의 소유권 기구는 기획재정부 소속의 공공기관운영위원회로서 공기업뿐만 아니라 정원 50명 이상의 준정부기관까지 직접 관할하면서 130개의 기관을 담당하고 있다 (기획재정부, 2022). 위원회는 공공기관의 대상범위 관리와 기관운영 지침 수립, 성과 관리 등 경영감독을 담당하고, 사업감독은 주무부처가 담당하고 있다.

표 4. 유형별 공공기관 증감 현황

구분	공기업	준정부기관	기타공공기관	합계
2007년	24	78	196	298
2022년	36	94	220	350
증감	+12개(50%)	+16개(20.5%)	+24개(12.2%)	+52개(17.4%)
공공기관운영위원회 소관여부	O	O	X	-

자료출처: 기획재정부(2022), 알리오(2022)

공공기관운영위원회의 주요역할은 공기업 신설 사전심사, 기능조정, 공기업에 대한 통합 연차보고서 작성, 경영공시에 대한 관리 감독, 비상임이사와 감사의 성과평가, 경영실적이 부진한 사장 해임요구 등이다 (박석희, 2013).

그러나 공공기관운영위원회는 실질적으로는 기획재정부의 소속위원회로서 보조기관 형태로 운영되고 있다는 비판을 받는다. 공공기관운영위원회가 최종적인 심의 의결권을 가지고 있다고는 하나 실질적으로는 기획재정부 장관이 위원장을 겸직하면서 정부위원 35명과 위원장이 추천한 민간위원 11명 이내로 구성되어 있다 (김경현, 2018), 따라서 위원회의 회의록이 비공개이므로 개별위원별 자세한 발언내용을 확인할 수는 없으나, 이들이 책임있게 의결에 참여했는지 투명성에 대한 의문도 제기되고 있다 (김철, 2012; 조성봉, 2016)

OECD(2005: 2015)도 각국 정부가 공기업에 대한 소유 지배권 행사구조를 명확히 할 것을 권고하고 있다. 그러나 공공기관운영위원회는 자문위원회로 정부(기획재정부)의 공기업 소유권을 보좌하는 형태에 불과하여 독립적인 의사결정이 가능하지 않아 형식적으로 운영될 수 밖에 없는 구조적인 한계를 지닌다 (김경현, 2018).

5.2. 내부지배구조로서의 공공기관 이사회

한국에서는 공공기관 이사회에 관련하여서는 이사회에 대한 정부간섭을 줄이고 독립성을 제고하는 한편 책임성을 강화하는 방향으로 일관된 흐름이 있었다 (이주경 and 김윤승, 2016). 그러나, Lee & Kim(2016)은 이러한 제도적 개선이 이사회의 3가지 기능 중 서비스기능과 자원접근기능을 강화시켰지만, 통제기능에는 별다른 영향을 미치지 못했다는 것을 실증적으로 증명한 바 있다.

이사의 선임절차 측면에서는 현행 공공기관운영법에 따라 독립적인 기구로 임원추천위원회를 두고, 해당 위원을 전문성 및 독립성이 있는 자로 자격을 제한하고 있다. 상임이사는 임원추천위원회에서 복수로 추천한 후보자 중에서 공기업 사장이 임명하고, 사장과 비상임이사는 임원추천위원회에서 추천하여 공공기관운영위원회의 심의·의결을 거쳐 기획재정부장관 또는 주무부처 장관이 임명한다 (공공기관 운영에 관한 법률)

명시적인 선임절차에도 불구하고, 한국의 공공기관 이사회(임원) 구성은 주로 전직 공무원이나 정치권 인사로서 해당 분야에 대한 전문성을 결핍하고 있다는 점에서 ‘낙하산 인사’라는 비판을 받고 있다 (이명석, 2001; 김헌, 2007: Frederick, 2011; 유승원, 2014). 실제로, 1998년부터 2017년까지 20년간 역대 행정부의 공공기관 기관장의 정치적 임용여부를 분석한 결과, 전체 452건중 283건이 정치적 임용으로 62.6%로 나타났다 (한인섭, 김형진, 곽채기, 2018). 정치적 임용을 지지하는 일부 학자들은 정권교체에 따라 대통령의 국정철학을 뒷받침할 수 있는 인사를 최고경영자로 임명함으로써 정책추진의 일관성과 정부정책의 효율성을 확보할 수 있다는 점을 강조한다 (Doig,1978; 하혜수, 2013). 그러나, 공기업 이사의 정치적 임용은 정치적 이해관계 때문에 전문성이 결여된 부적격한 인사가 임원으로 선임될 수 있고 좋은 지배구조의 투명성을 저해한다는 점에서 경계해야 한다 (이명석, 2001; 박천오 and  주재현, 2005; 민병익 and 김주찬, 2016). 정치적 임용 논란이 빈번하다는 것은 임원(사장)추천위원회와 공공기관운영위원회 등 선임체계가 공정하게 작동하지 않고 있다는 증거이다 (김경현, 2018)

임원(사장)추천위원회는 선임 안건에 1회성으로 구성하여 운영되고 있기 때문에 불투명한 후보선임절차와 낙하산 인사, 단임제의 임기구조, 비상임 이사들의 인센티브 부족, 비전문가 임용에 따라 내부 감사 기능 약화 등에 대한 비판이 있다(곽채기, 2003). 또한 위원회 위원을 공공기관의 운영과 경영관리에 관하여 학식과 경험이 풍부하고 중립적인 사람으로서 일정자격을 갖고 있는 자를 선임하도록 하고 있으나, 이들을 선임하는 것은 정부이기 때문에, 정부로부터 독립된 역할을 기대하기는 어렵다 (고영배, 2014).

6. 결론

많은 국가에서 공기업은 물, 전기, 교통, 임대주택 공급과 같은 기본 서비스를 사람과 기업에 제공하고 기업에 대출을 제공한다. 공기업은 정부의 직접적인 행동과는 다른 방식으로 상품과 서비스를 제공함으로써 경제와 사람들의 삶에 영향을 미친다. 공기업은 규모, 운영 부문, 복잡성, 정교함, 정부 소유 및 통제 범위가 다양하다. 본질적으로 공공부문의 일부인 반면, 다른 일부는 공공과 민간이 혼재합니다 (IMF, 2020. 4월).

민간기업이든 공기업이든 외부환경에 적응하면서 변화하여야 지속가능성을 담보할 수 있다. 환경 변화에 적응하지 못하면 바로 퇴출될 수 밖에 없는 민간기업과 달리 공기업은 공적 업무가 지속되는 동안 영속적으로 존재할 수 있으므로 급박한 환경변화에 둔감하고 관료주의적 병리현상이 나타날 가능성이 상존한다.

따라서 많은 정부는 공기업이 공적 임무를 달성하고 효율적으로 수행하며 민간 기업과 경쟁할 것을 요구한다 (IMF, 2019). 또한 납세자의 돈에 대한 가치를 얻는 것을 목표로 하는 명확하고 포괄적인 소유권 정책을 추구한다 (Allen and Alves, 2016; OECD, 2021)

이 연구에서는 지난 25년간 역대 행정부가 열성적으로 추진한 공공기관 관리정책에도 불구하고 공기업 개혁은 큰 성과를 거두지 못하였다고 비판을 받고 있는 한국의 사례에 집중했. 한국 정부가 다시 한번 강도높은 공기업 개혁을 예고하고 있는 시점에서 역대 행정부의 공기업 정책을 비교 평가하여 좋은 공기업 지배구조의 중요성과 필요성을 도출했다. OECD의 가이드라인과 영국의 공기업 지배구조 사례를 바탕으로 한국의 좋은 공기업 지배구조 구축을 위한 정책적인 제안을 한다.

우선, 외부지배구조 측면에서는 소유권 기구의 독립성과 전문성을 확보하기 위해서 공공기관운영위원회의 위상과 운영 개선을 제안한다. 구체적으로 첫째, 정부 산하의 자문위원회 성격의 공공기관운영위원회를 독립적인 의결권을 행사할 수 있는 소유권기구로 개편하여 독립성을 확보해야 한다. 둘째, 소유권 행사 대상기관을 준정부기관(94개)를 제외한 공기업(36개)에 한정하여 전문성을 향상시켜야 한다. 셋째, 소유권기구의 인적구성 측면에서 공개적인 절차에 따라 전문가를 임용하고 활동내역을 공개하여 투명성을 제고해야 한다.

내부지배구조 측면에서는 이사회의 투명성과 책임성을 확보하기 위하여 이사회의 구성과 운영의 개선을 제안한다. 첫째, 이사회를 구성하는 이사진의 대표성과 전문성 확보를 위한 구체적 기준의 설정이 필요하다. 둘째, 이사회와 개별 이사에 대한 성과평가를 실시하여 책임성을 제고해야 한다. 마지막으로 이사회에 정치적 영향을 배제하기 위하여 이사진 선임 절차를 재정비해야 한다.

공기업의 합리적이고 적절한 운영은 시민의 복리증진에 직결되는 한편, 운영실패의 결과 역시 시민에게 심대한 불편과 부담으로 전가된다. 설립목적에 따른 적정한 운용을 위해 필요한 경영의 자율성, 효율성과 책임성 간의 적절한 균형점에서 공기업에 대한 감독과 통제를 포함한 공기업 제도의 합리화가 이루어져야 할 것이다.

< 영문본 >

A Study on the Effect of the Reform of State-Owned Enterprises on the Public Cooperate Governance, triggered by the 1997 Foreign Exchange Crisis in Korea

A Comparative Analysis with OECD guidelines and UK system -

Table of Contents

1.  Introduction	22

2.  Changes in Public Management Paradigm and SOEs	24

2.1. New Public Management	24

2.2. New Public Governance	25

2.3. New Public Service	26

2.4. Implications	27

3.  A Comparative Analysis of the Public Management Paradigm in ROK	28

3.1  SOEs in ROK	28

3.2. The Paradigm and Achievements of Previous Administrations	29

3.3. Comparison and Evaluation of Performance	35

3.4. Implications	37

4.  OECD Guidelines on Public Corporate Governance and Comparative Case 39

4.1. Public Corporate Governance	39

4.2. OECD Guidelines on Corporate Governance of State-owned Enterprise 42

4.3. Public Corporate Governance in the United Kingdom	44

5.  Current status and Policy Recommendations for the Republic of Korea	49

5.1. Ownership Organization as External PCG	49

5.2. The Board as Internal PCG	52

6.  Conclusion	57

Bibliography	59

List of Abbreviations and Acronyms

Act of PI: ACT ON THE MANAGEMENT OF PUBLIC INSTITUTIONS

BIS: Department for Business, Innovation and Skills

CEO: Chief Executive Officer

CEORC: CEO Recommendation Committee

CG: Corporate Governance

Committee of PI: the governing committee of public institutions

ERC: Executive Recommendation Committees

GIA: Government Information Agency

IA: Independent Assessor

IPCG: Internal Public Corporate Governance

Kim Administration: Kim Dae-jung Administration

KIPF: Korea Institute of Public Finance

Lee Administration: Lee Myung-bak Administration

LPEs: Local Public Enterprises

MOEF: Ministry of Economy and Finance

MOPB: Ministry of Planning and Budget

MOIS: Ministry of the Interior and Safety

NPG: New Public Governance

NPM: New public management

NPS: New Public Service

OCPA: Office of Commissioner of Public Appointments

OECD: The Organization for Economic Cooperation and Development

Park Administration: Park Geun-hye Administration

PCG: Public Corporate Governance

Roh Administration: Roh Moo-hyun Administration

ROK: Republic of Korea

ShEx: Shareholder Executive

SOEs: state-owned enterprises

the Board: the board of directors of a state-owned enterprise

the Guidelines: OECD Guidelines on Corporate Governance of State-owned Enterprise

the Principle: OECD Principle of Corporate Governance

UK: the United Kingdom

UKFI: UK Financial Investments

UKGI: UK Government Investments

WPSOPP: Work Group on State Ownership and Privatization Practices

Yoon administration: Yoon Seok-yeol administratio

Abstract

Despite changes in the historic public management paradigm, State-Owned Enterprises (SOEs) are still acting and playing a prominent role as another government in many countries as an essential supplier of public services, including utilities. Although SOEs have constantly attempted to innovate around efficiency or publicity in response to changes in the public management paradigm, there are still widespread concerns that they are the subject of reform and the medium of corruption.

This report aims to analyze Korea's public institutions reform and Public Corporate Governance (PCG) system, which has been enthusiastically promoting SOEs reform for the past 25 years, and to make policy recommendations for government reform for better performance. To this end, this paper first compared and analyzed the achievements of previous administrations based on the change process of the public management paradigm and the impact on SOEs reform. Based on this, the paper derive the need for good PCG to overcome inefficiencies arising from structural constraints of SOEs. Afterwards, we draw implications based on the OECD Guidelines on Corporate Governance of State-owned Enterprise (the Guidelines) and the PCG case in the UK. Finally, the paper analyze Korea's current system and problems and make the following policy suggestions to establish PCG in Korea.

In terms of external PCG, propose measures to improve the status and operation of the governing committee of public institutions(Committee of PI) to ensure the independence and expertise of the ownership organization. On the other hand, in terms of internal PCG, propose improvements to the composition and operation of the board of directors of public enterprises to ensure transparency and accountability of the board.

Introduction

State-Owned Enterprises (SOEs) grew in size and importance worldwide throughout most of the 20th century. Governments in Western Europe, including France, Germany, Italy, Spain, and the UK, began nationalising significant industries in the early 1900s (IMF, 2020). The trend began in Central and Eastern Europe after World War II and continued in Africa and Asia following the 1950s and 1960s (Allen and Vani, 2013; Musacchio and Lazarini, 2014). By the early 1980s, SOEs averaged 8% of production in developed countries and 15% in developing countries (Sheshinski and Lopez-Calva, 2003). Since the early 1980s, when criticism of SOEs' inefficiency grew, many countries have attempted to introduce economic profit motives into SOEs through privatisation, with efficiency emphasised around the New Public Management (NPM) paradigm (Lee, 2008: Park and Park, 2011: Kim, 2014)/

In many countries, SOEs are still essential to core public services, including utilities. The operation of these SOEs is affecting citizens' daily lives and competitiveness in all other economic sectors. SOEs account for 1-2% of total economic activity in major advanced economies and 30% in some emerging markets, which is of great economic importance (OECD, 2020). According to the IMF (2020), SOEs assets have doubled to 20% of the world's 2,000 largest companies over the past decade. In 2018, SOEs assets amounted to $45 trillion, or 50% of global GDP.

SOEs are hybrid organisations. On the other hand, as an enterprise, SOEs are under various market pressures as they sell their output. On the other hand, as a public organisations, SOEs are owned and controlled by the government or its agents (Jones, 2009). SOEs with such characteristics are an organisational form established to pursue two ideologies simultaneously: publicity and efficiency. The production and supply of public goods or public services can act as an organisational form that can be appropriately used in sectors that may apply market logic. (Kang, 2021). Thus, while many governments struggle to manage SOEs effectively, there is widespread concern that many SOEs are inefficient, carry significant risks to government budgets, and are a vehicle for corruption (IMF Fiscal Monitor, April 2019; OECD 2018).

Republic of Korea (ROK) is one of the countries that has been actively pursuing SOE reform since the 1997 financial crisis. In November 2013, Deputy Prime Minister Hyun criticised excessive debt problems and lax management, saying, "The party is over," and demanded high-intensity self-rescue efforts (Yonhap News TV, 2013). Nine years later, in June 2022, Deputy Prime Minister Choo said, "The party is over," demanding high-intensity self-rescue efforts such as efficiency and productivity improvement and asset sales (Kookmin Ilbo, 2022).

Whenever a single five-year presidential system replaces the administration, "Public institutions reform or innovation" has always been a hot topic. In the administration's early days, the administration announced SOE reform plans. However, according to a June 2022 survey of 1,450 people, including the general public, SOEs workers, and experts, 63.8% of the general public and 64.9% of experts said that ROK's public institutions' neglect of management was severe, and 71.8% of the general public and 77.3% of experts said substantial reform was needed. Despite the efforts of previous administrations, SOE reform has not achieved much, and there are still low credibility and high demands for reform. Many problems have been pointed out, such as parachute appointments, lax management, and debt growth (Song, 2016).

In ROK, SOEs are responsible for around 5% of national economic activities, and they account for a large portion of the budget, which is more than the total government expenditure (Song, 2016). Unlike other countries, it dramatically impacts the national economy by acting on behalf of the government's financial projects. Therefore, SOEs' efficient and transparent operation is essential for national development.

This report aims to analyse ROK's public institutions reform and governance system and to make policy recommendations for a government reform plan for better performance. This report consists of four parts.

The first part describes the characteristics and process of change of the public management paradigm according to the flow of social perception of public enterprises. A priority understanding of this could be a prerequisite for understanding previous administrations' reform of public enterprises.

In the second part, we compare and analyse the efforts, characteristics, achievements, and criticism of the reform policies of public enterprises by the ROKn administration for 25 years after the 1997 financial crisis. Through this, we derive the need for good governance to overcome inefficiencies arising from structural constraints of public enterprises.

In the third part, we will study the OECD Guidelines on Corporate Governance of State-owned Enterprise (the Guidelines) and PCG cases in the UK, which the OECD recommends to governments. It draws implications for building good governance to ensure that SOEs operate efficiently, transparently, and responsibly.

Finally, in the fourth part, we analyse the current status and problems of PCG in ROK and make policy suggestions for improving the ownership organisation and SOEs board necessary to build a good government.

2. Changes in Public Management Paradigm and SOEs

SOEs need to understand this because they can achieve very different results in institutional operation and government management innovation, depending on how the government's public management paradigm changes (Woo, 2021). For SOEs to respond appropriately to environmental changes, an integrated and multidimensional understanding of the public management paradigm is essential, so this report summarises related theories from a general perspective.

Since the 1980s, Western scholars have called for strengthening meritocracy, transparency, and accountability through competitive methods, arguing that public sectors such as SOEs and administrative agencies also need the same management reform as private companies (Ra et al., 2018). This theoretical trend is called New public management (NPM). Since the 2000s, New Public Governance (NPG) and New Public Service (NPS) have emerged as reflections and alternatives to NPM in academia.

2.1. New Public Management (NPM)

NPM is a public management plan that has emerged as a kind of government innovation paradigm in the United States and the UK since the 1980s as the government sector, which has grown to cope with market failure, caused government failure (Terry, 1998). Market orientation, the core of NPM, is a concept to achieve customer satisfaction by introducing the Principle of market competition in the public sector to create results by competing with the private sector (Woo, 2007). According to the NPM, which uses marketism and competition as keywords, even the public sector should follow the exit mechanism if there is no result. In theory, it is based on New Managerialism. It consists of a public choice theory, an owner-agent theory, and a transaction cost theory (Woo, 2021).

The NPM seeks to increase the effectiveness of the public sector and secure accountability through reinvention, restructuring, and re-engineering (Boston et al., 1996). It argues that small organisations are more efficient than large-scale bureaucratic organisations in enabling competition, emphasising performance, responsibility, and customer orientation. In other words, it provides more rewards to organisations (individuals) with high performance, and the people no longer receive unilaterally provided public services. However, they recognise them as beings who evaluate and select public services and make innovative efforts. The government emphasises "how to do" rather than "what to do" and considers how to provide better services at a lower cost through discretionary professional management. To this end, 3E (economy, efficiency and effectiveness) is emphasised rather than public specificity. However, by defining 'administration' as an act that satisfies management efficiency rather than reflecting political values, the NPM excluded the administration's political orientation and neglected the administration's political value by focusing on the internal management plan of the organisation (Kim, 2000). In addition, criticism was raised that quality aspects should be more important than economic efficiency in public services, and post-NPM, such as NPG and NPS, emerged as alternative approaches to overcome them (Christensen and Lagreid, 2016).

2.2. New Public Governance (NPG)

The NPG was raised by Osborne (2006; 2010), and unlike traditional bureaucratic administration or NPM, it is characterised by placing citizens at the centre of discussion. It is differentiated from existing state-oriented administration, or market-oriented NPM, in that citizens are recognised as co-producers of policy and service delivery (Brankerhoff and Brinkerhoff, 2015).

Governance refers to a form of governance without government that provides public services through a network of trust-based links between government and private organisations and is a web of relationships between state and citizens, government, private, organisation and citizens (Frederickson, 1999). Stoker (1998) assumed that governance is that ① both the government and private sector participate in solving public problems, ② the boundaries between responsibility and responsibility for solving socioeconomic problems are breaking down, ③ emphasises the power dependence relationship between the parties involved in collective action, ④ there is an autonomous network between actors, ⑤ social problems can be solved without relying on the authority of the government. In other words, actors interact in the network to form mutual trust, pursuing service improvement from a long-term perspective rather than short-term profits. While the NPM sees public officials as rational human beings who maximise their self-interest, the NPG recognises them as beings with both selfishness and altruism.

However, the NPG has no centralised control over governance, so the possibility of a failure to reach a new agreement is limited (Jessop, 2000). There is a risk that non-responsible entities participate and disguise their private interests as public interests. It is difficult to apply to general social problems because there is no official government intervention. Inequality of information or power among government participants (Bae, 2005), the possibility of the government strengthening the hierarchy or using it as a tool for political and economic collusion (Jube, 2005), and the inability to measure the work performance of actors (Kramer, 1994) can lead to government failure.

2.3. New Public Service (NPS)

Emphasising that the role of government is service or public service itself, the NPS says that the interaction of integrating social members is essential, not the government-led steering in the NPM (Denhardt and Denhardt, 2003). In this regard, policy targets should not be just customers but participating sovereigns and contribute to realising the public interest. It emphasises responsibility for citizens' needs over market logic or meritocracy and values of humans over productivity or efficiency in organisational management (Woo, 2021). In other words, the role of the government is not to make money but to spend it appropriately, so social value is more critical than economic value.

Denhardt and Denhardt (2015) present the following seven critical contents of NPS. ① Serve Citizens, Not Customers. ② Seek the Public Interest. ③ Value Citizenship over Entrepreneurship. ④ Think Strategically, Act Democraticly . ⑤ Recognise Accountability Ign't Simple. ⑥ Serve Rather than Steer. ⑦ Value People, Not Just Productivity

However, because the role of public officials or citizens is biased toward idealism, democratic norms or community values are too emphasised, so they are neglected in efficiency and expertise. (Woo, 2008).

2.4. Implications

Traditional administration was mainstreamed until the late 1970s/early 1980s, followed by active discussion until the early 21st century, when NPG emerged as the dominant third mainstream (Woo, 2021). Several alternatives are being sought, but the mainstream in the direction of public sector reform is still based on NPM.

This theoretical approach is not limited to theory but applies to Public institutions, including SOEs and actual government department management (Woo, 2021). Therefore, SOEs need to prepare appropriate response strategies in advance while closely watching the flow of the public management paradigm.

As previously discussed, NPM's approach to managing Public institutions focuses on pursuing efficiency. At the same time, NPG emphasises participation and collaboration, and NPV emphasises the provision of public services based on publicity. However, despite the differences arising from reflection on NPM, NPG and NPS still have NPM elements in that they value efficiency. Recently, each paradigm tends to be applied interconverted and complementary rather than focusing on specific individual paradigms.

3. A Comparative Analysis of the Public Management Paradigm in ROK

3.1. SOEs in ROK

Public institutions are public enterprises established by the government for the effective production, management, and provision of universal public services for the people and are managed by direct and indirect financial support from the government. According to the founder, ROK's public institutions are central and local public institutions, and 1,606 have been established and operated as of 2022 (Alio, 2022: Clean Eye, 2022).

Sort	Central	Local	Sum
SOEs	36	411	447
Quasi-Governmental organization	94	845	1,159
Other Public institutions	220
Sum	350	1,256	1,606

Table1. Public institutions in Korea: the number of organs

*Sources: Alio(https://www.alio.go.kr), Clean Eye(https://www.cleaneye.go.kr)

There are 350 central public institutions, classified into central SOEs, quasi-governmental institutions, and other public institutions, depending on the number of employees, asset size, proportion of their own income to total income, and designation by the Minister of Planning. Local Public institutions produce and supply public services that residents need with investment or financial support from local governments and are classified into local SOEs and investment-funded institutions based on profitability.

In ROK, the term public institution is used interchangeably by public enterprises. Generally, it is PSOs (public sector organisations) owned by the state or local governments. However, emphasising economic feasibility, they are also limited to national and local public enterprises. Alternatively, it may mean a state-run enterprise and a semi-public institution designated by the Minister of Strategy and Finance following the Act on the Management of Public Institutions (Act of PI).

SOEs in ROK are public organisations in which the central and local governments exercise ownership and management rights. In terms of law and institutional aspects, the people are the ultimate owners of SOEs. However, the central and local governments delegated authority from the people are responsible for the actual management and operation of SOEs (Kim, 2014).

As of 2022, central SOEs are 36 institutions with 50 employees, 3 billion won in total income, and more than 1 billion won in assets, with more than 50% of their own income (Alio, 2022). On the other hand, since the implementation of the local autonomy system in 1992, local governments have greatly expanded the function of Local Public Enterprises(LPEs), one of the suppliers of local public goods, has been expanding (An and Kang, 2013). LPEs promote projects related to water supply, sewerage, housing, road and facility infrastructure, and a wide range of projects related to residents' quality of life, such as culture and arts, sports facilities, and parks. There were only 30 LPEs in the 1980s, but now there are 411 LPEs as of 2022 (Clean Eye, 2022).

3.2. The Paradigm and Achievements of Previous Administrations

ROK has a single five-year presidential system, and the Conservative and Progressive administrations continue to change every five years. Since the 1997 financial crisis, "Public institutions reform or innovation" has always been a hot topic whenever the administration has been replaced. In the administration's early days, they announced SOE reform plans. Whether the reason for the existence of SOEs is efficiency and productivity improvement or publicity comes first depends on the differences in the ideology of each administration. Therefore, in this chapter, we draw implications by comparing and analysing the trends and characteristics of the previous administration's public institutions management policies.

3.2.1. Kim Dae-jung Administration (Kim Administration): 1998-2003

The IMF management system began in late 1997 and was a direct trigger for ROK's SOEs plan. In economic development, bureaucratic evils existed due to inefficiency due to the expanded organisation and staffing structure and the function centred on administrative convenience control (Ministry of Planning and Budget (MOPB), 2002). Meanwhile, the expansion of NPM around the world and the successful reform cases of countries that introduced it have become the theoretical basis for public sector reform promoted by the government of the people (Ra et al., 2018)

Kim Administration aimed to reform the public sector with the goal of a small but efficient government. A competitive and productive government was made the primary direction of public reform by downsizing the public sector, expanding the private economic sector, and introducing competition and performance principles (MOPB, 2002). In particular, the SOEs promoted management innovation to improve restructuring and operation systems such as privatisation, abolition of subsidiaries, and consolidation.

Since the inauguration of President Kim in 1998, the Planning and Budget Committee has been established as a presidential organisation dedicated to financial planning and public sector reform to promote intensive functional efficiency. As a result, 8 SOEs were privatised, and 66 subsidiaries were privatised or merged by December 2002. The organisation was reduced by 25% of the total SOEs workforce, and 1,207 unit organisations were abolished. The government director system was systematically abolished, the CEO recommendation committee system and management contract were introduced, and the responsibility was strengthened according to management performance evaluation (MOPB, 2002).

The reform of the public sector promoted by the Kim Administration tends to emphasise efficiency more by introducing various principles of the private sector to the public sector, believing that the private sector is superior to the public sector. Although significant results have been achieved in efficiency and efficiency, there is a relative lack of consideration for democracy and equity (Ra et al., 2018). Although achievements such as reducing excessive welfare systems and slimming down organisations, inefficient management cases such as participation in non-core projects, corruption of executives and employees, and hindering market order remained (National Public Relations Agency, 2008).

3.2.2. Roh Moo-hyun Administration (Roh Administration): 2003 ~ 2008

Criticising that the previous government's reforms focused on one-time reforms such as reorganisation and personnel reduction, it aimed at continuous and unshakable innovation based on mid- to long-term and comprehensive response strategies that change systems and cultures. In addition to administrative efficiency, responsibility, transparency, and a high level of morality were required in the public sector. Recognising that it is difficult to benchmark private companies due to the nature of public institutions' work, we discovered best practices for Public institutions' management innovation and operated a learning program to benchmark between public institutions (National Public Relations Agency, 2008).

As a result, there was an achievement in preparing customer-centred management, transparent-ethics management, and autonomous-responsible management system.

① Customer-centered management: Disclosure of customer participation, processing process, and satisfaction investigation.

② Transparent-ethics management: Introduction of Public institutions' executive recommendation committee, the opening of "ALIO (www.alio.go.kr)" to disclose Public institutions' management information, reinforcing executive job integrity contracts, and strengthening the role of auditors

③ Autonomous-responsible management: Expansion of management evaluation targets and activation of board functions

However, despite many achievements, constant innovation that did not reflect the context and characteristics of each institution lacked recognition and consensus among members of the organisation (Kim et al., 2008). Internal conflicts caused by the rapid change were an obstacle to the continuous and effective promotion of innovation (Kim et al., 2008). In addition, unlike the goal of innovation that complements bureaucracy and democracy, innovation was focused on building an efficient government. As an administration with different ideologies from the previous administration, the innovation of the existing government, such as infrastructure construction, was cut off, and the achievement of government innovation was insignificant in the second half of power, while the size of the government became more extensive than that of the previous administration (Kim and Hong, 2011)

3.2.3. Lee Myung-bak Administration (Lee Administration): 2008-2013

Through the Roh Administration, hardware restructuring, such as privatisation and consolidation, was suspended due to strong opposition from stakeholders such as labour unions to the existing reforms. Although software-side reforms such as strengthening management evaluation were promoted, this showed limitations in preventing the enlargement of the public sector and lax management (MOEF, 2011). The number of public institutions increased by 17.3%, from 260 in 2002 to 305 in 2007, and the staffing increased by 35.1%, from 191,000 to 258,000 (MOEF, 2008).

Lee Administration prepared a reform plan for public institutions from March 2008, shortly after its launch, and at a special presidential press conference in June, expressed its willingness to "advanced Public institutions" and promoted public sector reforms (Seo et al., 2015). The Lee Administration's ‘public institutions advancement' is a crucial policy of 'small and efficient government' and has announced and promoted public institutions advancement plans six times to reestablish private and public roles, improve the efficiency of Public institutions and improve service quality (Ra et al., 2018). While the first to third advancement plans mainly promoted hardware improvements such as SOEs consolidation and privatisation, the fourth to sixth plans focused more on improving management efficiencies such as staffing reduction or budget reduction. Public institutions' advancement plans are aimed at "small government, large market" and reduce financial support for SOEs. However, electricity, gas, water, and medical insurance, which are directly related to public life and are feared to raise rates, are excluded from privatisation (MOEF, 2018).

In November 2012, 7 out of 19 SOEs subject to privatisation were completed, and the stakes of 4 institutions were sold. In addition, overlapping-similar institutions were actively merged, such as reorganising 84 investment companies and promoting consignment sales, reducing the number of workers by about 3,000 (MOEF, 2015). In addition, 22,000 out of 175,000 capacity of 129 institutions were gradually reduced in 2009 (MOEF, 2015).

However, privatisation was actively promoted in the early days of the regime. However, the scope and extent of privatisation were significantly reduced as opposition from interested parties, such as labour unions, expanded. The privatisation of health insurance and water supply, considered initially, was excluded from the review. The privatisation target was significantly reduced in the second half of the regime as it said it would carefully promote the privatisation of electricity and gas. In addition, criticism was raised that the public nature was overlooked by emphasising the efficiency of SOEs (Yoon, 2012). SOEs ' 'lax management' was highlighted. However, the solution-focused only on privatisation or introduction and expansion of private management principles, failing to obtain the general public's consent and SOEs workers (Roh, 2010). The economic recession triggered by the global financial crisis was criticised for weakening the quantity and quality of public services and increasing the number of non-regular workers in the public sector (Roh, 2010).

3.2.4. Park Geun-hye Administration (Park Administration ): 2013-2017

As a result of the Lee Administration's continuous reform, although the efficiency of SOEs has been significantly improved, the Park Administration determined that similar cases of lax management and public distrust remain due to nuclear power supply corruption (MOEF, 2013).

Accordingly, SOEs reform was promoted with two trends: "Reasoning public institutions" and "normalising public institutions." Based on management efficiency, restructuring, such as adjustment of similar-redundant functions and consolidation of institutions, was carried out every year. However, policies to guarantee management autonomy were also promoted by establishing a mid-term operation plan and simplifying budget-personnel regulations—however, the debt ratio reduction and lax management improvement. SOEs welfare guidelines were prepared, introduced a performance-based salary system, and remove low-performance workers.

The Park administration's public institutions reform policy is evaluated as software reform-oriented, autonomous and responsible, and organisation and personnel management-oriented (Nam, 2017). All 302 implemented the plan as the employee's immediate family priority recruitment regulations and full support for children's tuition were abolished. In addition, a wage peak system and a job-oriented employment system were introduced. According to the MOEF (2017), the SOEs debt ratio improved significantly from 220% in 2012 to 167% in 2016.

However, focusing on policies to improve efficiencies, such as debt reduction and lax management of public institutions, has resulted in a decline in publicity, a unique purpose of institutions (MOEF, 2018). Excessive non-regular workers were operated, and dangerous tasks were mainly outsourced, hindering the stability of public institutions' jobs. In particular, it was criticised that the performance-based salary system and the low-performing retirement system caused members' conflicts and reduced public institutions' autonomy (Han, 2017).

3.2.5. Moon Jae-in Administration(Moon administration): 2017-2022

The Moon Administration, where President Park appeared as impeachment, had different ideologies from the previous administration. The public institutions' reform aimed to "improve the quality of life of the people" (MOEF, 2018). The reform was carried out to strengthen publicity significantly, restructuring such as privatisation and institutional consolidation was stopped, and non-regular workers were converted into regular workers. The Moon Administration diagnosed that the public institutions' reform policy has resulted in a contraction of public interest, a unique purpose of public institutions due to its emphasis on improving efficiency and profitability, such as debt reduction and lax management (Ra et al., 2018).

3.2.6. Yoon Suk-yeol Administration (Yoon Administration): 2022-2027 (planned)

The Yoon Administration, which took office in February 2022, believes that the productivity and efficiency of public institutions have decreased significantly in the current liberal administration. Accordingly, the MOEF (2022) announced an innovation plan centred on productivity and efficiency, saying that public institutions have expanded their organisations, staffing, and debt over the past five years but need to be efficient due to worsening profitability and productivity. According to the MOEF (2022), the number of public institutions increased by more than 35%, from 33.4 million in 2017 to 44.9 million in 2022. The debt also increased by 17%, from 499 trillion won to 583 trillion won, and in particular, SOEs' operating profit fell from 13.5 trillion won in 2017 to 0.7 trillion won in 2021.

The contents of the five areas of public institutions efficiency announced by the Yoon Administration are as follows (MOEF, 2022).

① Functional adjustment: Private competition, reduction of non-core functions other than unique projects, and consolidation of similar redundant functions

② Reduction of staffing: Reducing the number of employees in '23 by promoting a large organisation and slimming staffing

③ Budget reduction: 10% reduction in current expenses in the second half of the year, and reorganisation of the remuneration system focusing on job and performance

④ Asset sale: Selling unnecessary assets unrelated to unique functions and liquidating shares in insolvent investment companies

⑤ Inspection of benefits: Adjustment of excessive barley benefits to the level of national public officials.

The government said it has no artificial restructuring or privatisation plans for working public institutions workers. However, the labour community strongly opposes privatisation and wage cuts, calling them compulsory restructuring (2022).

3.3. Comparison and Evaluation of Performance

The paradigms applied to SOEs management are different. During the Lee Administration, which focused on eradicating SOEs' lax management, it was a traditional NPM approach, while during the Roh Administration, NPM and some NPG were mixed. The Park Administration has the form of NPM and post-NPM, and the Moon Administration has the form of NPG and NPS (Woo, 2021)

Table2. Different Approaches of Each Administration and Main Management Policies

	Noh Administration	Lee Administration	Park Administration	Moon Administration
Approach	NPM + (NPG)	NPM	(NPM) + Post-NPM	NPG + NPS
Policies	•Basic Plan for Government Innovation Management • Enacting THE ACT ON THE MANAGEMENT OF PUBLIC INSTITUTIONS (2007) • Diagnosis and Evaluation of Innovation level • Customer Satisfaction Survey • Transparent Management • Official Openning of Alio Webpage	•Plan for Advancing Public Organization •Privatization and Sale of Stake •Merging Public Organizations, Reducing Number of Employees, Functional Arrangement •Salary Cut for New Recruit, Multiple Unionshops, Performance-based Salary	•Plan for Public Organization Rationalization, Openning Public Data • Plan for Public Organization Normalization, Reducing Debt Rate, Guideline for Welfare Benefits, Controlling Reckless Management Organization • Salary Peak, NCS-based Recruitment, Favoring Local Applicants, Enlarging Performance-based Salary, Cutting Low Performance Employees	•Putting Emphasis on Social Value and Service •Income-based Growth, Enlarging Public Sector Recruitment, Changing Temporary Workers into Regular Position •Rooting-out Recruitment Corruption, Public Involvement, Protecting Whistle Blowers •Guideline for Innovation, Guideline for Blind Recruitmen

*Source: The Changes in a Public Management Paradigm and the Implications for Public Enterprises(Woo, 2021)

The positive and negative evaluations of public reform by each administration are mixed. The 1997 foreign exchange crisis was a direct opportunity for ROK's public sector reform and was promoted to eliminate inefficiency in the public sector (woo, 2021). As the NPM expanded, there were hardware achievements such as privatising SOEs and reducing subsidiaries, but there were limitations in software changes, such as improving the way they work. Since then, mid- to long-term innovations that change the system and culture has begun. Through the global crisis in 2008, reorganising the management system without hardware restructurings, such as privatisation and institutional consolidation, resulted in bloating and lax management in the public sector and promoted restructuring for efficiency. As public criticism and distrust of public debt and lax management remained, the 'Public institutions rationalisation and normalisation policy' was later promoted. Recently, the government announced that the existing policy has led to the enlargement of public institutions with the priority of strengthening publicity, signalling intensive reforms to improve productivity and efficiency again (MOEF, 2022).

Table3. Positive and Negative Sides of Different Management Approaches

	Noh Administration	Lee Administration	Park Administration	Moon Administration
Positive Side	•Innovation and Competition Mind-setting for Public Oragnization Employees •Paying Attention to Customer Satisfaction	•Decreasing Reckless Management •Enhancing Efficiency by Functional Rearrangement and Merging	•Decreasing Debt Level •Efficiency in Organization and Personnel Management	•Increasing Level of Attention toward Social Value •Better Level of Public Service and Publicness •Enhanced Level of Working Condition
Negative Side	•Innovation Fatigue •Neglecting Democracy of Public Administration •Top-down Approach	•Neglecting Publicness •Degrading Public Service level •Enlarging Number of Temporary Positions •Rapid Growth of Debt Level by Exploiting Public Organizations	•Shrinking Publicness •Outsourcing 3D Work •Decreasing Autonomy •Conflic between Labor and Management	•Conflict between Irregualr and Regular Jobs such as Incheon International Airport Case •Political Exploit of Public Organization •Rapid Increase of Recruit

*Source: The Changes in a Public Management Paradigm and the Implications for Public Enterprises(Woo, 2021)

3.4. Implications

The final goals of previous administrative reforms can be summarised as improving the efficiency and productivity of public institutions, establishing autonomy and responsible management, and strengthening their institutions' capabilities. Despite the same goal, discussions on the public sector, especially for reform of SOEs, were fierce whenever the administration changed. SOEs are already a big part of the ROK economy and have a significant impact on the market economy, so SOEs reform is an important social topic. More attention needs to be paid to the public sector because unethical behaviour in the corporate sector affects company shareholders. In contrast, unethical behaviour in the public sector affects all taxpayers and citizens.

In 2022, 25 years after the NPM craze began in ROK, Yoon Administration called for "the party of SOEs is over," demanding that public institutions be reduced in size and sold their assets, again making "improving efficiency and productivity" a top priority (MOEF, 2022). However, efficiency-oriented reforms focused solely on the NPM tend to neglect political and social values and focus on quantitative performance, drawing backlash and criticism, and sometimes over-coordination.

The direction of SOE reform in ROK can be said to be the promotion of privatisation on the one hand and the improvement of PCG on the other (Ko, 2014).

First, the evaluation of the privatisation of SOEs, which is presented as the most significant hardware achievement in ROK's NPM-centered Public institutions' reform, is mixed. Privatisation of SOEs means allowing the government to allow private companies to produce public goods and services or allowing private companies to supply government-produced goods and services to the people (Pheko, 2013). Many scholars have argued that privatising SOEs can improve the inefficient management of SOEs. In other words, privatising financially troubled SOEs can improve productivity and achieve Pareto optimisation (Kim, 2015; Amado et al., 2017), resulting in technological progress (Zhao, 2013), which can lead to total factor productivity (Amado et al., 2017). On the other hand, other researchers argued that SOEs privatisation hinders workers' interests and that productivity does not significantly increase due to the nature of public goods (Kim et al., 2013; Kim and Ahn and Han, 2013; Albalate and Rosell, 2019), and manufacturing (Kang, 2009). Recently, there is also an empirical study that privatised SOEs do not necessarily lead to productivity improvement due to changes in technical efficiency in SOEs' internal management activities (Kim, 2021). The government (2022), which announced intensive public institutions reform centred on productivity and efficiency, explicitly stated that there is no artificial restructuring or privatisation plan for public institutions workers currently working (MOEF, 2022).

Therefore, whether the privatisation of SOEs is efficient is beyond the scope of this paper, and we will deal with it at other opportunities. Moreover, here, we will only deal with ways to improve PCG. SOEs do not clearly define the ownership entity of their property rights. These structural ownership constraints of SOEs lack the motivation and norms to increase property value and maintain it correctly for their CEO or supervisor (Kim, 2018). As a result, SOEs are experiencing more inefficiencies in their management processes, such as moral hazard and agency problems, than private companies. Overcoming the inefficiencies in the structure of SOEs, it is necessary to design and operate good governance. PCG should be recognised as a critical challenge for SOEs management innovation in that it has a significant impact on determining management performance. SOEs' corporate governance is also an essential issue for scholars and practitioners regarding social relevance to SOEs and severe governance issues faced by companies (Papenfu, 2020). The need for such a change in the management system means that it emphasises the harmony of publicness according to social responsibility and corporately in the operation of SOEs (Park, 2022).

In addition, as social demands for responsible management such as ESG(Environment, Social, Governance) increase, it is necessary to expand the role of governance and management disclosure such as the Board (MOEF, 2022). ESG is a criterion for determining a company's non-financial performance (Lee, 2021). The importance of SOEs management is also increasing recently through international issues such as the COVID-19 pandemic and carbon neutrality (Lee, 2021: Dominovicé, 2022).

Therefore, in the next part, we will analyse the current status of PCG in detail and draw helpful policy suggestions for supplementing productivity-oriented reform policies, including privatisation measures.

4. OECD Guidelines on Public Corporate Governance and Comparative Case

4.1. Public Corporate Governance (PCG)

Corporate governance generally refers to a mechanism that coordinates the relationship between various stakeholders surrounding the unit of economic activity, namely, the monitoring and regulation of corporate management or an organisation that performs these functions (OECD, 2004: Lee, 2014). Corporate governance has historically been associated with the private sector, focusing on corporation-shareholder relationships, specifically large and listed firms (Samuel, 2014). OECD (2004) not only called for looking at corporate governance from a long-term perspective rather than a short-term achievement but also mentioned the importance of corporate ethical management and governance (Jang and Lee, 2017).

On the other hand, PCG refers to 'an executive body that makes management decisions of SOEs and a system that supervises and controls them. PCG differs from the private sector in three ways. First, since the company's owner is the state, the state controls significant decisions, including the appointment and dismissal of key figures and the agency head (Yunho Kang, 2022). In addition, since the state or local government owns it, it inevitably receives management, control, and supervision directly from the political circles. Second, SOEs pursue both public and profit-seeking goals at the same time.  Third, SOEs are more complex than private companies because they have diverse interest groups such as governments, politicians, interest groups, people, and consumer groups (Kang, 2022). It may pose an inefficiency in SOEs management as different stakeholders have different objectives and lack centralised management and control.

This PCG can be divided into external PCG  and internal PCG. Externally, they can be classified into control by the people, shareholders, consumers, experts, the National Assembly, the Audit, the ministries, and finance ministries, and internally by the Board, auditors, unions, and employees (Park, 2022). Among them, it can be focused on the ownership organisation as an external government and the Board as an internal government.

While external corporate governance is relatively clearly under market surveillance and control, external PCG has no market surveillance and control and is distributed in a multi-layered and complex structure called people-government-SOEs. Hence, the SOEs' and the controller's roles are crucial (Kim, 2018). The organisation of ownership functions and the allocation of control are related to establishing government authority as shareholders who own SOEs. It is essential because it can directly affect the internal PCG, especially SOEs, without shareholders' meetings (Park, 2012). Accordingly, the OECD (2005) also recognises the difference between establishing SPEs and the basis of ownership and the diversity of ownership organisations by state.

According to the OECD (2021) survey, SOEs ownership models in 52 countries are classified into Six Models.

① Centralised model: A single government agency performs management and supervision duties as an owner for all state-controlled enterprises and institutions (with or without exception). The agency may be a proprietary agency or a designated government department, and the central agency carries out all financial objectives, technical/operational issues, and SOEs performance monitoring procedures. SOEs directors are appointed in various ways, but the central ownership authority presents essential criteria for appointment. Twenty-one countries, including ROK, France, Italy, and China, choose it.

② Coordinating agency model: Non-exclusive ownership of SOEs officially owned by another department or agency is exercised by the coordinating agency or department. For example, coordinated departments or organisations will act as consultants to the ownership department on general operational issues. The most important task for these coordinators is often monitoring SOEs' performance. Ten countries, including England, India, and Poland, choose it.

③ Twin track model: A model derived from a centralised model, with two different government agencies exercising their entire ownership of their respective affiliated SOEs. Two countries, including Belgium, choose it.

④ Separate track model: A small number of ownership agencies, holding companies, or similar organisations each own SOEs in groups. Two countries, including Malaysia, choose it.

⑤ Dual models: Two government departments or other higher-level Public institutions exercise ownership functions together. It is when two different ownership functions are assigned to two different ministries. For example, one department is responsible for a company's financial performance, another department is responsible for the company's operation, or each department appoints a different director individually. Eight countries choose it, including Australia, Brazil, and the Czech Republic.

⑥ Decentralised model: Multiple government departments or other high-level Public institutions (assuming no coordinating body) exercise ownership of SOEs. Nine countries, including Germany, Japan, and Canada, choose it.

The internal PCG is about who is responsible for managing and producing SOEs and their relationship. As management entities, SOEs may have a general shareholders' meeting, a board (best decision-making body), a Chief Executive Officer (CEO, executive body), and an audit committee.

As the Board is recognised as an internal PCG that solves agent problems between owners and managers, the need for reform continues to spread (Lee and Lee, 2016). The Board's work has three functions: control, service, and resource dependence (Johnson, Daily, and Ellstrand, 1996; Zahra and Pearce, 1989). In agent theory, the Board increases corporate performance by reducing agent costs incurred by managers seeking private interests by performing control functions (Kim, 2009). This trend is based on the premise that the Board performs a control function on CEOs who are likely to have opportunistic attributes due to information asymmetry and moral hazard (Son et al.. 2010).

Accordingly, the OECD (2005) also stated that empowering the Board and enhancing the capacity of the Board are the most basic measures to improve PCG.

4.2. OECD Guidelines on Corporate Governance of State-owned Enterprise

The Guidelines (OECD, 2015) is a recommendation to governments to ensure that SOEs operate efficiently, transparently and responsibly. The OECD enacted the Guidelines in 2005 to propose governance recommendations for healthy business activities and business environment and published a revised version reflecting the changing social environment ten years later (OECD, 2005: OECD, 2015)

The Guidelines agreed with criteria for how governments exercise state ownership functions to prevent passive ownership of SOEs or excessive state involvement. The Guidelines recommend separating ownership functions from industrial policy and regulatory policy functions to systematise responsibility relationships (management, board ownership entities, competent ministries, governments, and legislatures) for overlapping and complex SOEs according to agent theory. In other words, ownership is unified around the Ministry of Finance and strengthens the independence of the Board to guarantee SOEs' management autonomy, secure accountability, and strengthen management transparency in the management process (Park, 2016).

The guideline is rooted in the OECD Principle of Corporate Governance (the Principle), published in 2004. However, unlike general private sectors, the Guidelines were presented considering the specificity of SOEs. For example, considering political interference, no fear of bankruptcy or hostile M&A, and the company's unclear owner, the Guidelines apply to SOEs (OECD, 2015: KIPF, 2017: Jang and Lee, 2017).

Rationales for state ownership: ownership of SOEs whose ultimate purpose is to own an efficient allocation of resources through intensifying society's values. The state public interest for the SOEs should exercise its right to ownership, and possession of grounds and procedures that can justify the purpose of the general public shall be made public.

The state’s role as an owner: The state has much expertise as an active owner and expertise for the entire SOEs and efficiency to avoid further damage. Based on the PCG, transparency and responsible must be realised.

A state-owned enterprise in the marketplace: The state has much expertise as an active owner and expertise for the entire SOEs and efficiency to avoid further damage.

Equitable treatment of shareholders and other investors:  If the State is not the sole owner of the SOEs, the state shall provide fair treatment to all other shareholders and ensure access to SOEs-related information.

Stakeholder relations and responsible business: SOEs' responsibilities to stakeholders and their obligations to report on stakeholder relationships should be reflected in the national ownership policy. SOEs for shareholders of other stakeholders should not be used as a tool for political activities to raise funds.

Disclosure and transparency: SOEs should be subject to the same level of transparency and accounting information disclosure, compliance monitoring, and audit standards as generally listed companies.

The responsibilities of the boards of state-owned enterprises: The Board shall have the necessary authority, competence and objectivity to perform strategic management advisory and supervision functions. The Board has integrity shall act must be responsible for its actions.

4.3. Public Corporate Governance in the United Kingdom(UK)

4.3.1. Establishment of Public Corporation Governance

As of 2022, there are 419 independent and public institutions, 108 high-profile groups, and 14 public corporations under Prime Minister's Office and 23 non-ministry departments and 20 non-ministry departments (UK Government, 2022).

Until 2000, the UK systematically adopted a decentralised ownership model in which the competent ministries exercised ownership rather than an integrated system for public interest and efficiency. The management goals of individual SOEs are set through consultation with the competent ministries, and the ministers are obligated to report to the council on public enterprise activities. Furthermore, in almost all cases, ministers exercised the right to appoint directors (Park, 2013). In the 2000s, the system was partially improved by concentrating the government's ownership and control of SOEs. The National Audit Office (NAO) criticised the broad policy functions of the competent ministries according to the decentralised ownership model infringing on the shareholder value of SOEs in the long run, such as deficit operation, and the autonomy of SOEs management is reduced.

Nevertheless, PCG in the UK was a decentralised structure. Since 2010, more than 900 public institutions have been privatised, integrated, and abolished under the Conservative Party. In this process, the Shareholder Executive (ShEx), a SOEs ownership organisation under the Cabinet Office, was transferred to Department for Business, Innovation and Skills (BIS) in 2011. Moreover, the role was reorganised to provide professional advice and advice to public institutions. In April 2016, a single national holding company, UK Government Investments(UKGI), was launched by integrating ShEx with UK Financial Investments(UKFI) under the HM Treasury to reform public institutions and governance.

As a result, the UK, along with Bulgaria, India, and Poland, has a Coordinating agency model in which professional government agencies act as consultants to other ownership ministries on technical and operational issues and monitor SOEs management performance (OECD, 2020).

4.3.2. UK Government Investments Functions and Roles

UKGI, an independent organisation founded in 2016 by the Treasury (HM Treasury) with 100% investment to integrate government equity management and expertise in corporate finance, is a significant asset manager in the UK government, providing some sovereign wealth fund (Coyle and Muhtar, 2021).

Due to changes in the public bodies management system, UKGI oversees the ownership function of 18 affiliated SOEs as of 2021 and leads the sale and privatisation of large-scale SOEs. It also supports the functional exercise of the arm's length bodies on behalf of the seven competent ministries (UKGI, 2022).

Looking at UKGI's role based on the proportion of employees, it supports the ownership function of the competent ministries, focusing on governance support (36%), state-owned asset sales (14%), financial investment support (41%), contingent liability analysis and advice (10%) (UKGI, 2022). In other words, under the government's primary policy goal of protecting and spreading market competition, it supports SOEs asset sales, business development, internal and external governance improvement, market analysis, and large-scale investment and transactions, and maintains cooperative relations with the relevant ministries (Park, 2022). The Chancellor of the Exchequer takes overall responsibility for UKGI's activities in Parliament (UK Government, 2022). In practice, the Chief Accounting Officer (PAO) is responsible to Congress for contributions and subsidies to UKGI and also considers each department's policy objectives and fiscal expenditure priorities, but conducts various management advisory activities to enhance the profitability and efficiency of SOEs.

Through these activities, UKGI plays a key role based on close consultation with the HM Treasury in management support for the operation of the Board, performance management, management strategy, and setting performance goals of each SOEs based on the principles of expertise, efficiency and mutual reliability. In particular, UKGI is a state holding company invested by the Treasury. However, it is recognised for its independence and accountability under the UK Corporate Governance Code. It thus provides professional and independent advice based on consultation with the Treasury on the rational exercise of ownership by various SOEs. In the performance of these roles, UKGI's overall management strategy establishment and performance inspection are discussed and determined through a quarterly shareholder meeting consisting of representatives of the HM Treasury.

4.3.3. The Board - Focusing on Office of Commissioner of Public Appointments (OCPA)

Unlike other European countries, the boards in the UK are characterised by integrated supervision and management (Yoon, 2016).

In terms of the composition of the Board, there is no separate size for the Board in the UK. However, following the Combined Code on Corporate Governance, which applies to private and public enterprises, most of the Board must be independent directors (OECD, 2021). The Board consists of several stakeholders, including directors representing the government, directors representing employees (i.e., representatives of trade unions), directors from the private sector, and politically appointed directors. However, one non-executive director represents the government, and the majority of directors are made up of private experts. The government has the right to approve directors representing various sectors (OECD, 2005).

The boards perform a variety of functions. Above all, the chairman of the Board exercises power to recommend the head of SOEs to the government. In the case of SOEs to which the Corporate Act applies, a subcommittee is established within the Board, consisting of audit and remuneration decisions, risk management, and a senior committee.

The OECD (2018) introduces the OCPA as an exemplary example where the UKGI's coordination function can be confirmed. In most cases, SOEs under UKGI appoint directors according to the public enterprise-led appointment procedure using third-party external headhunters. UKGI employees (usually non-executive directors who are UKGI owners of related SOEs) will also participate in the interview as one the interviewers. The UKGI is also involved in determining the selection criteria for individual board positions from scratch so that candidates with the skills and experience needed to form a balanced board can be selected. The consent of the owner/minister is required before the preferred candidate of the SOEs is appointed. All appointments to directors must follow the principles set out in the Government Regulations on the Appointment of Public Officials, which include that the appointment process must be operated openly and transparently based on competence and qualifications (OECD, 2020: OECD, 2021).

According to the OECD (2018), the OCPA process may vary slightly depending on the size of public enterprises and the specific requirements of positions, but it is as follows.

The central ownership advisory unit, the UKGI, and the SOE Chair agree on the mix of skills and experience required on the Board, leading to agreement on a strategic plan of public appointments. A timetable for recruitment is then agreed upon between the SOE, the lead director in UKGI and an Independent Assessor (IA).

A specification setting out the role and requirements for the board appointment is drafted and agreed upon with the government's human resource unit and the SOE. The role and person specification is then agreed upon, with the body or Minister making the final decision.

A candidate search is undertaken with the vacant position being publicly announced (i.e. advertised) and often involves the use of recruitment agencies to ensure a more thorough search of potential candidates.

Based on applications received, a long list of potential candidates is produced. An initial sift involving UKGI, the IA and the SOE is conducted to produce a shortlist of candidates to interview.

An interview panel is established comprising the lead UKGI policy official, the IA and the SOE Chair.

The panel will then agree on the preferred candidate and submit a panel report with recommendations to departmental ministers.

Once ministers have agreed with the recommendation, the appointment can be made.

An appointment is generally for three years when the position is subject to re-election.

The remuneration of the successful candidate, if over a certain threshold, needs to be agreed with the HM Treasury.

If the OCPA does not regulate the position, the public enterprise executes the process but, in most cases, follows the OCPA guidelines. UKGI can provide appropriate recommendations to agree to appointments in such a way that UKGI is closely involved in the process if it is an important position (e.g. CEO or Financial Director), such as joining the interview panel (OEDC, 2018).

The Board can systematically evaluate the performance of members of the Board, depending on the evaluation results. It can also determine whether the director will serve a second term (OECD, 2005). In that the remuneration of board members (basic salary + performance bonus) is linked to the performance of SOEs, practical performance management exists. The proportion of performance-based bonuses among total remuneration is relatively high, around 50% (OECD, 2005). In terms of the Board's operations, the Board's performance is evaluated by UKGI or the component director's self-assessment method, if necessary. In addition, audit and accounting risks are reported to the Board every quarter through the Risk Committee, a special committee within public enterprises. It puts supervisory responsibility for risk management on the boards.

4.3.4. Assessment: UKGI's Role in the International Community

The UK continues to be regarded by the international community as a best practice for the PCG and plays a leading role in the OECD, seeking advice, challenging and sharing best practices in many countries internationally (UKGI, 2022). The UK also enjoys a long-established tradition of oversight and evaluation of institutional structures and lethargic institutions (Coyle and Muhtar, 2021).

UKGI has represented the UK in the OECD Work Group on State Ownership and Privatisation Practices(WPSOPP) for more than a decade and provides expertise and support to WPSOPP in a variety of ways, including dispatching UKGI colleagues to participate in speeches and educational events (UKGI, 2022)

The WPSOPP is a policy forum established in 2001 to promote PCG improvement and provide guidance on privatisation practices. The WPSOPP promotes policy dialogue and information exchange among member states, applying the principles to SOEs,  and enacting the guidelines.

UKGI provides UK examples and data on public ownership and governance to WPSOPP (UKGI, 2022). In particular, the experience of the UK's Net Zero agenda is highly appreciated for contributing to and sharing the UK's unique know-how in the role public companies can play in climate change and low-carbon transition policies (UKGI, 2022).

5. Current status and Policy Recommendations for the Republic of Korea

5.1. Ownership Organization as External PCG

5.1.1. Current Status and Problems

Following the Guidelines (OECD, 2005), ROK concentrated the functions of public enterprise ownership in 2007 around the MOEF (Commission of PI under the MOEF). The PCG has contributed to public institutions' operation innovation for the past 15 years to innovate weak public institutions management by competent ministries based on the centralised ownership structure since 2007 (Park, 2022).

Although the centralisation of ownership has achieved specific results since the reorganisation of the PCG, excessive centralisation has been criticised for causing peripheralisation of the competent ministries and politicisation by bureaucrats of the management evaluation system (Sung 2021; Park 2022). Under the rapidly changing policy environment, it has been criticised that the SOEs ownership function is still concentrated in the MOEF and is not responding appropriately (Sung, 2019). In other words, although design thinking and collaboration and sharing are necessary according to various interests, the purpose of PCGs is hindered, and effective business execution is limited due to the control-oriented management of the MOEF.

The ownership organisation is a committee belonging to the MOEF of the Committee of PI, which is in charge of 130 institutions, directly controlling not only public companies but also quasi-governmental institutions with a capacity of 50 or more (MOEF, 2022). The committee is in charge of management supervision, such as managing the scope of public institutions, establishing guidelines for institutional operation, and performance management. The competent ministry is still in charge of project supervision following the Establishment Grounds Act of Public Institutions (Act of PI, 2007)

Table 4. Increase and Decrease in Public installations

Sort	SOEs	Quasi-Governmental organization	Other Public institutions	Sum
Year 2007	24	78	196	298
Year 2022	36	94	220	350
Fluctuations	+12(50%)	+16(20.5%)	+24(12.2%)	+52(17.4%)
Committee of PI’s jurisdiction	O	O	X	-

*Sources: Alio(https://www.alio.go.kr),

New Government Public Institution Innovation Guidelines((MOEF, 2022)

The Committee of PI is the culmination of external PCG that deliberate and resolves matters related to SOEs following the Act of PI. The primary roles of the Committee of PI include a preliminary review of the establishment of SOEs, functional adjustment, comprehensive annual report on SOEs, supervision of management disclosure, performance evaluation of non-executive directors and auditors, and calls for dismissal of CEO with poor management performance (Park, 2013).

However, although the Committee of PI is operated in the form of an auxiliary agency, it is actually a committee belonging to the MOEF and consists of 35 government members and 11 civilian members recommended by the chairman.

From 2016 to 2017, the Committee of PI was held 43 times, with government members from significant ministries such as the Cabinet Office, the National Rights Commission, and the Ministry of Personnel Management attending 0 to 3. The chairman of the MOEF attended only twice (Kim, 2018). In addition, during this period, the committee handled a total of 200 agendas proposed by the MOEF, with 190 original resolutions showing a 95% consent rate and no rejection. In particular, most of the agenda (143 cases, 72%) were related to personnel appointments, such as the appointment or dismissal of executives of public corporations, and voted 100% with the original motion (Kim, 2018). Since the minutes of the committee's meeting are private, detailed remarks by individual members cannot be confirmed, but questions are also raised about transparency and whether they participated in the vote responsibly (Kim, 2012; Cho, 2016).

5.1.2. Recommendations

The ownership organisation as an external PCG is critical because it can directly affect the internal PCG of SOEs by setting the authority of the government, which is a shareholder who owns SOEs. It means that the government needs to exercise ownership to secure management responsibility of public corporations but strictly separate from other policy and regulatory functions to ensure management autonomy. Accordingly, the OECD (2005: 2015) recommends that governments of each state clarify the structure of exercising ownership control over SOEs.

However, the Committee of PI is an advisory committee that only assists the government (MOEF) in the ownership of SOEs, so it has a structural limitation that cannot operate formally because independent decision-making is impossible. Because ownership organisations lacking independence are inefficient, it is impossible to solve chronic problems such as excessive state-run business implementation and lax management, parachute appointments, and moral hazard (Kim, 2018).

The Committee of PI's independence and expertise can be improved as follows.

First, the Committee of PI should reorganise into an ownership organisation that can independently exercise voting rights to secure independence. However, it must be separated from the government's policy function. It is difficult to clearly distinguish the form of ownership organisations on an absolute basis, and the PCG that each state aims for is different.

Second, expertise should be improved by limiting the institutions subject to the exercise of ownership of the Committee of PI to 36 SOEs, excluding quasi-governmental institutions (94). It is because quasi-governmental organisations with less than 50% of their income will be more efficient in supervising them as business-oriented.

Third, to provide professional guidance to competent ministries and public enterprises, the appointment of experts, such as UKGI, is inevitable in the human composition of ownership bodies. In addition, the qualification requirements of members shall be strictly established and selected under open procedures, and transparency shall be enhanced by disclosing the details of activities.

5.2. The Board as Internal PCG

5.2.1. Current status and problems

In ROK, there has been a consistent trend toward reducing government interference on the Board, enhancing independence, and strengthening accountability (Lee and Kim, 2016). In 1997, the reorganisation of the Board and other governments emerged as a significant agenda item during the 1997 IMF economic crisis, abolishing ex officio directors of central SOEs and introducing a CEO Recommendation Committee (CEORC, Basic Act on Management of Government Investment Institutions, 1999). In 2007, the chairman and CEO were separated in SOEs with assets of 2 trillion won or more (Act of PI, 2007).

However, Lee and Kim (2016) empirically proved that these institutional improvements strengthened the service function and resource access function among the three functions of the Board but had little effect on the control function. In addition, in about 400 LPEs, two public officials (Finance Department and Business Department) from the local government still participate as ex officio directors.

In terms of composition, the Board must deliberate and resolve critical matters concerning public enterprises and quasi-governmental organisations (Act of PI, Article 17). The Board shall comprise not more than 15 members, including the CEO, standing executives, and non-standing directors, but the number of standing executives shall not exceed half. Regarding the qualification standards of executives, it stipulates that they are 'people with abundant knowledge and experience in management (Act of PI, Article 25) and lacks specificity. In addition to expertise, it is essential to ensure representation and balance in the composition of the Board, but no clear criteria have been specified other than numbers (Yoon, 2016).

In terms of functions, the Board has broad authority to deliberate and resolve not only the actual contents of the management of public corporations, such as management goals, budgets, and operation plans but also for profit-making companies, such as changes in articles of association and executive remuneration (Act of PI, Article 17).

In terms of responsibility, they are responsible for loyalty, confidentiality, and third parties and private companies. Suppose a director fails to fulfil their duties or is lazy. In that case, the Minister of Strategy and Finance may dismiss or propose dismissal to the appointing authority through deliberation and resolution of the steering committee and may require the relevant public enterprise and quasi-governmental organisation to claim damages (Act of PI, Article 35). However, the CEO guarantees a term of office except for special reasons set by the articles of association (Act of PI, Article 22). The CEO in question can be dismissed, but the reasons and procedures for dismissal are explicitly stipulated so that CEO is not unfairly dismissed for political reasons (Yoon, 2016).

In terms of directors' appointment procedures, the current Act of PI requires independent organisations such as Executive Recommendation Committees (ERC) to secure independence in the operation of SOEs, and the qualifications of the members are limited to those with expertise and independence. The CEO appoints the executive director among the candidates recommended by the ERC. The CEO and non-executive directors are appointed by the MOEF or the competent Minister with the Committee of PI's consent.

Despite the explicit appointment process, the Board is criticised as a "parachute appointment " mainly for their lack of expertise in the field (Lee, 2001; Kim, 2007: Frederick, 2011; Yoo, 2014). Some scholars who support political appointments emphasise that by appointing a person who can support the president's philosophy of state affairs as CEO, policy consistency and government policy efficiency can be secured (Doig, 1978; Ha, 2013). In particular, SOEs in ROK often carry out government policies entrusted or perform tasks closely related to government policies, so the policy line should be the same as the president's. In fact, as a result of analysing the political appointment of CEO in previous administrations (from the Kim Administration to the Park Administration) for 20 years from 1998 to 2017, 283 out of 452 cases were political appointments, 62.6% (Han, Kim, and Kwak, 2018).

However, the political appointment of executives should be wary that unqualified persons lacking expertise can be appointed as executives due to political interests and hinder the transparency of good governance (Lee, 2001; Park and Joo, 2005; Min and Kim, 2016)

In particular, whenever a new president is elected, and the administration is replaced, wasteful debates about the so-called "parachute appointment" or "code appointment" are repeated (Han, Kim, and Kwak, 2018; Choi and Kim, 2020). According to Hong (2017), who analysed the keywords of media articles related to SEOs over the past 15 years, the question of " parachute appointment" has continued every year. Recently, the frequency has increased.

Table 5. Keywords for articles related to SOEs

Ranking	2003	2008	2013	2016
1	privatization	privatization	debt	Performance-based salary
2	political	laxity	reform	Parachute
3	Restructuring	reform	corruption	finance SOE
4	Parachute	administration	administration	Energy SOE
5	conglomerate	debt	Audit	Electric SOE
6	layoff	CEO	Restructuring	hiring irregularities
7	Audit	Government	Parachute	Withdrawal
8	innovation	Audit	laxity	Conflict
9	custom	Parachute	CEO	Seoul
10	moral hazard	stock listing	salary	Electricity SOE

*Sources: Analyzing Issues Related to Public Enterprises by Period in Korea (Hong, 2017)

The frequent political appointments also prove that the board appointment system, such as the CEORC, ERC, and the committee of PI, is not working somewhat. Since the CEORC or ERC is operated as a task force on the appointment agenda, there are criticisms of opaque presidential candidate selection procedures, parachute appointments, lack of incentives for non-executive directors, and weakening internal audit functions due to non-professional appointments (Kwak, 2003). In addition, committee members are required to appoint people with specific qualifications and knowledgeable and experienced neutral people in the operation and management of public institutions. However, it is not easy to expect an independent role from the government because it is the government that appoints them (Ko, 2014).

In addition, the ownership authority should be able to act as a clearing house for candidates. However, as previously discussed, the 43rd Committee of PI held between 2016 and 2017 was an agenda related to the appointment or dismissal of executives. However, it is criticised for being operated formally with 100% consent (Kim, 2018). In this regard, the MOEF (2022) states that the contents of reporting and deliberation on personnel-related agendas are related to personal information such as personal identity and reputation, so that they will be closed to the public.

5.2.2. Recommendations

The guidelines specify that the Board plays a central role in the PCG (OECD, 2017). The Board is responsible for the management performance of SOEs under the director's fiduciary duty. In this position, the Board acts as a practical intermediary between the owner's state and the company. Amid the widespread "commercialisation" of SOEs in recent decades, governments have been striving to enhance the Board's expertise and give it more authority and autonomy (OECD, 2021).

The current Act of PI believes that SOEs can be effectively controlled by giving absolute authority to the government, a shareholder, to appoint and dismiss executives. It is in line with the CG, which values the role of shareholders, giving shareholders the right to control management. However, unlike the private sector, the government is likely to prioritise political judgment over management performance (Go, 2014).

The key to good governance is transparency. Emphasising governance, which guarantees the participation of many stakeholders, is another expression of transparency (Yoon, 2016). OECD (2021) also emphasises the need for transparent and consistent procedures for appointing board members and executives, given that some cases of collusion between senior executives and politicians in SOEs have influenced the appointment process in some countries.

Therefore, SOEs should be able to operate with a lasting and long-term vision regardless of the administration's change. To this end, the following improvements will ensure the independence and expertise of the Board, enabling them to operate responsibly and transparently.

First, it is necessary to establish specific standards to secure the representation and expertise of the board members who make up the Board. As mentioned earlier, as of 2022, there are 1,606 public institutions in ROK, different from the type of institutions. Therefore, based on public institutions' publicity and corporate nature, the criteria for the appointment of board members should be categorised into political responsibility and management efficiency, and the qualifications, composition ratio, and scope of stakeholder participation should be set explicitly for each institution.

Second, a performance evaluation of the Board and individual directors should be conducted to enhance accountability. Apart from the management performance evaluation prescribed by the Act of PI, a practical evaluation system for the role and responsibilities of a 'director' should be prepared.

Finally, the most crucial thing is reorganising the board appointment process to rule out political influence on the Board. First, the ERC system, which operates once according to the personnel agenda, should be abolished, and an independent personnel organisation should be operated by integrating with the Committee of PI. Of course, in this case, it is essential to have the competency model and diagnostic ability for each public institution's position. In addition, the operation process, such as the composition of personnel organisations and the details of activities, should be disclosed to improve transparency in policy decisions.

6. Conclusion

SOEs affect the economy and people's lives by providing goods and services in a way that is different from the direct actions of the government. In many countries, SOEs provide essential services such as water, electricity, transportation, and rental housing supply to people and businesses and loans to businesses. SOEs vary in size, operational sector, complexity, sophistication, and government ownership and control. Some are part of the public sector, while others are a mix of public and private (IMF, April 2020).

Whether a private or public enterprise, sustainability can be guaranteed when it changes while adjusting to the external environment. Private companies that have to survive market competition are forced to exit if they do not adapt to environmental changes. However, SOEs can have organisational business permanence as long as public work granted by the state continues. Therefore, SOEs are insensitive to rapid environmental changes, and there is a possibility that bureaucratic pathologies such as formality, rigidity, and closure of organisations and businesses will emerge (Park and Park, 2011; Kwak, 2019).

Therefore, many governments require public enterprises to perform their public duties efficiently and compete with private enterprises (IMF, 2019). It also pursues a clear and comprehensive ownership policy aimed at gaining value for taxpayers' money (Allen and Alves, 2016; OECD, 2021).

This report focuses on the case of ROK, where SOE reform has not achieved much despite the management policies enthusiastically pursued by previous administrations over the past 25 years. When the government once again heralded intensive SOEs reform, we compared and evaluated the management policies of previous administrations to derive the importance and necessity of good corporate governance. Based on the guidelines and the case of PCG in the UK, this report makes a policy recommendation for establishing a good PCG.

First, in terms of external PCG, this paper proposes to improve the status and operations of the Committee of PI to ensure the ownership body's independence and expertise. Specifically, the Committee of PI, a government-affiliated advisory committee, should be reorganised into an ownership organisation that can exercise independent voting rights to secure independence. Second, it is necessary to improve expertise by limiting the institutions subject to ownership to 36 SOEs, excluding quasi-governmental institutions (94). Third, regarding the human composition of ownership organisations, it is necessary to increase transparency by hiring experts and disclosing the details of activities under open procedures.

In terms of internal PCG, recommend improvements of the Board to ensure transparency and accountability. First, it is necessary to establish specific standards to secure the representation and expertise of the board members. Second, a performance evaluation of the Board and individual directors should be conducted to enhance accountability. Finally, the process of appointing board members is reorganised to rule out political influence on the Board.

SOEs' rational and appropriate operation is directly linked to promoting citizens' welfare. The operational failure is also passed on to citizens as a severe inconvenience and burden. The governance, including supervision and control of SOEs, should be rationalised from an appropriate balance between management autonomy, efficiency, and accountability necessary for proper operation according to the purpose of establishment.

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