President Lee Jae-myung on the 16th said, "We hold the people's stocks, so we must exercise our voting rights," and called on the National Pension Service to strengthen the stewardship code (fiduciary duty of institutional investors). Drawing a line against ways that excessively sway corporate management, Lee also stressed, "We must exercise minimum control."
That afternoon in Sejong, at a work briefing by the Ministry of Health and Welfare and its affiliated agencies, Lee asked National Pension Service Chairman Kim Sung-joo about the operation of the stewardship code, saying, "Since we hold stocks, we should properly exercise our voting rights. Will we actually do that?"
Kim said, "As an investor, the National Pension Service also incurs losses if corporations face risks," adding, "To prevent losses, we keep engaging in dialogue (with investee corporations) under the guidelines, and if that still doesn't work, we exercise our voting rights."
The stewardship code is a guideline under which institutional investors such as the National Pension Service manage investor assets on their behalf and actively participate in corporate decision-making to fulfill fiduciary duties. It was introduced at the National Pension Service in 2018 to maximize shareholder interests. The ruling Democratic Party of Korea is also pursuing an amendment to the Financial Investment Services and Capital Markets Act centered on supplementing the stewardship code as one of the measures to revitalize the stock market.
Reaffirming the intent of introducing the stewardship code, Lee called for the fund's active role. Lee said, "If we exercise shareholder power too strongly, we end up with state capitalism, which we must avoid, but we should exercise minimum control." He emphasized that the stewardship code is not a means of intervening in management control but a normal exercise of shareholder rights.
When Kim cited an example of stewardship code operations by saying, "Since implementing the stewardship code, Korean Air's share price has risen and the National Pension Service has gained significantly," Lee said, "Where primitive and backward corporate management is practiced in our country, we must make sure to do so firmly."
Lee, meanwhile, also called for establishing a compensation system tied to fund management performance. Lee said, "People who manage the fund must be transparent, but if they demonstrate ability, compensation should be sufficient," adding, "There is talk that, because compensation is insufficient, they all move to places managed by the private sector. I would like to see a robust compensation system so that doesn't happen."
Kim replied, "Performance pay is weak, but we plan to revise the rules and pay more starting next year."