This study analyzes whether firm value increases when firms appoint former government officials as outside directors on their boards. Korea adopted the outside director system because independent outsiders with specialized knowledge participating on the board can mitigate agency problems by monitoring management's unilateral decision-making, thereby maximizing shareholder wealth and contributing to sound corporate governance. Even when former government officials are appointed as outside directors, if their independence is maintained to perform the role of monitoring management, or if they cannot monitor management's unilateral decisions but firms can leverage the specialized knowledge and personal networks accumulated during their government service, they can contribute to enhancing firm value. However, in recent years, the proportion of former government officials appointed as outside directors has been increasing, and doubts have been raised about whether former government officials can fulfill the inherent role of outside directors, along with suspicions that former government officials serving as outside directors may function as high-premium insurance and lobbying channels for firms in times of crisis. Accordingly, this study analyzed whether appointing former government officials as outside directors contributes to enhancing firm value by examining whether firm value differs depending on the appointment status of former government officials as outside directors, changes in appointment status, and the proportion of former government officials among outside directors. Analysis using firms listed on the Korea Exchange from 2000 to 2010 revealed that while the mean and median firm value (Tobin's q) of firms that appointed former government officials as outside directors were significantly higher than those of non-appointing firms, no significant differences were found after controlling for firm characteristics and board characteristics reported to affect firm value. Furthermore, when analyzing cases where the most significant changes in firm value were expected—namely, when non-appointing firms began appointing and when appointing firms ceased appointing former government officials as outside directors—no significant differences in firm value were found. Moreover, when the proportion of former government officials among outside directors was higher, firm value was actually found to be significantly lower compared to when the proportion was lower. The results of this study may reduce the incentive for firms to appoint former government officials as outside directors when seeking to increase firm value. Additionally, these results provide indirect evidence suggesting that firms may have purposes other than enhancing firm value when appointing former government officials as outside directors—such as serving as a shield or high-premium insurance—thereby providing shareholders with a basis for judging whether to approve appointments when former government officials are nominated by management, as well as a basis for investment decisions that consider corporate governance. Finally, the results inform regulatory authorities that firms' reasons for appointing former government officials as outside directors may not be to leverage their expertise, enabling the operation of the outside director system and the determination of related policies with this consideration in mind.