This paper provides policy suggestions for corporate governance in Korea. Wefocus more on self-regulations than law and government regulations. First, weargue that the firm is not an individual, but a nexus of contract based on thetheory of a firm. Secondly, Korean business groups need to transit fromcomplicated ownership structure like a pyramid to pure holding companies andstop doing inside trading between affiliated firms within the same businessgroup. Thirdly, it is important for Korean business groups to activelycommunicate with institutional investors. Lastly, Korean business groups shouldreallocate the decision-making power among controlling shareholders,professional managers and boards of directors.