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This study examines the impact of governance transparency on business group firms' valuations by analyzing Korean chaebols' transition from circular-shareholding to pyramidal-shareholding structures between 2011 and 2018. Greater transparency about controllers' incentives can impact business group firms' value through two channels: by increasing earnings informativeness and by enabling investors to update their priors about the severity of agency issues across group firms. These channels can lead to value increases and declines, depending on the relative strengths of the positive value effects of the earnings informativeness channel and the ambiguous value effects of the expected incentives channel. Our findings highlight the nuanced effects of governance transparency on firm value and have important implications for policymakers, investors, and managers.