Total budget for public bodies 2006 is 261 trillion won which accounts for 31% of GDP. Government support for the public bodies has been increased year after year. Public bodies are forming a great part in Korean economy and, of course, are playing a more and more important role. Public bodies are likely to be loosely managed and morally relaxed, if no proper governance is established.

This research evaluates the governance of public bodies through both survey and documentary records. It focuses both on the steering committee of public bodies and the board of directors that influence on decision making and management of public bodies and on auditing and public notice that play a role in management control.

It is found that not many people think a new system would be able to prevent loose management and moral hazard. There are less people who believe a new system would raise management autonomy and strengthen management effectiveness of public bodies than who do not.

In order to complement the weak points, these are suggested. First, side effects that may be caused by dual supervision system should be minimized. Second, autonomy in management of public bodies should be ensured. Third the role of non-permanent directors of board and auditors should be strengthened. Fourth, the role of civil members in the steering committee of public bodies should be intensified. Fifth, evaluation of the activities of the steering committee of public bodies is needed. Sixth, correct understanding of roles and functions of non-permanent directors of board is required.