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Shareholder activism has been described as “the exercise and enforcement of rights by minority shareholders with the objective of enhancing shareholder value over the long term.” While defining shareholder activism by reference to the use of shareholder rights to enhance shareholder value describes the basic parameters of this corporate governance tactic, the formulation is too general in nature to distinguish hedge fund interventions from those carried out by mainstream institutional investors such as mutual funds and public pension funds. Hedge fund differs from activism by traditional institutional investors, and its implications for corporate governance and regulatory reform. It is directed at significant changes in individual companies, it requires higher costs, and it is strategic and ex ante. The reasons for these differences may lie in the incentive structures of hedge fund managers as well as in the fact that traditional institutions face regulatory barriers, political constraints, or conflicts of interest that make activism less profitable than it is for hedge funds. But the differences may also be due to the fact that traditional institutions pursue a diversification strategy that is difficult to combine with strategic activism. Although hedge funds have prospects for the future as active shareholders, their deep involvement in corporate governance and control raises two potential problems: the interests of hedge funds sometimes diverge from those of their fellow shareholders, and the intensity of hedge fund activism imposes substantial stress that the regulatory system may not be able to withstand. The history of Shareholder Activism in Korea is shorter than that of the United States. But the dysfunction of shareholder activism in Korea is as much as in the United States. Shareholder activism has negative side as well positive side to enhance the corporate value and the interests of other shareholders. Despite the affirmative aspects of shareholder activism, predatory shareholder activism has devastating effect on fellow shareholders and company. In order to cope with the negative aspects, especially predatory shareholder activism, we can utilize business judgement rule and controlling shareholder's fiduciary duty theory and it is necessary to build internal control system and to raise communication between management and shareholder.