序二

Why and how was this book written？When I was a young PhD student during the mid-1990s, a fellow PhD student and friend suggested that I should study and do research on corporate governance. He was Asian, and he felt that Asian firms had poor corporate governance.However, at that time, I was not very interested in the subject, especially because the topic did not seem important in the United States.Then came the 1997 Asian Financial Crisis.During this crisis, many firms suffered, including firms in my home country of Korea.A major cause of the problem was poor corporate governance.I then decided to study corporate governance, and I have since spent my entire academic career studying it and conducting research on it.I even spent the late 1990s working for the United States government, at the U.S.Securities and Exchange Commission.

In the United States, corporate governance came to the spotlight in the early 2000s, but it came to the spotlight for unfortunate reasons. Gigantic firms like Enron and Worldcom failed, and it was because of poor corporate governance.This led to a global crisis in investor confidence.In early 2000s, I wrote a book titled，“Infectious Greed，”which explained why the U.S.corporate governance system was poor, and what we needed to do about it.The book was later converted into a college textbook titled，“Corporate Governance.”As of this writing, I am working on publishing the 4th edition of that textbook.As a result of my well-known work on corporate governance, I also became the author of the corporate governance materials for the CFA program.

When I moved to China in 2011，I joined Renmin University of China as a Pro-fessor of Finance, and this meant that I would be departmental colleagues with a good friend of mine, Professor Jiang Fuxiu. Coincidentally, Professor Jiang is also passion-ate about corporate governance, especially about corporate governance in China.Cor-porate governance is an important topic in China, given China's fast economic and industrial development.China needs to learn from the experiences of its neighbors that suffered from the 1997 crisis, and from the United States that suffered from a cor-porate governance crisis that spread throughout the world.Professor Jiang and I had many discussions and arguments about corporate governance.Most corporate govern-ance theories come from the West.We used to argue about whether or not China should, or could, adopt Western practices of corporate governance.On the one hand, China is different from the West, but on the other hand, as China was transitio-ning to a market-based economy, China was becoming more similar to the West.

A few years after my arrival to Renmin University of China, Professor Jiang and I were invited to guest-edit a Special Issue on Corporate Governance in China for the Journal of Corporate Finance. During this period of our guest-editorship, we contin-ued to have many discussions and arguments on corporate governance, and from these many debates our views started to converge.We wrote a long paper titled，“Corporate Governance in China：A Modern Perspective，”to introduce the Special Issue.To date, it may be my proudest academic paper.I then told my colleague and friend, Professor Jiang，“If we really care about China, then we should expand our article and make it into a book and it should be written in Chinese！”And this is why and how this book was written.That is, Professor Jiang made it happen.I was not sur-prised that he did.Professor Jiang is a dedicated, passionate, wise, and hard-work-ing scholar.One of the luckiest things that has ever happened to me is meeting Pro-fessor Jiang.He taught me so many things, and for that, I am indebted to him for the rest of my career and life.And also, he is one of my best friends.

I dedicate this book to my children, Sophia and Hector. I hope that when my children are adults, there are no corporate governance problems in the world.And I especially dedicate this book to my wife, Zhan.She is more than an extraordinary wife, mother, best friend, and finance scholar.She is my everything.And she is the one that makes sure that we have good governance in our family.

Kenneth A. Kim

March，2016