SEOUL, South Korea's health and welfare minister said Monday that the National Pension Service (NPS) will actively exercise its voting rights in companies that damage their corporate values.
The decision comes as the NPS is moving to adopt new stewardship code guidelines aimed at making institutional investors, who manage other people's money, actively promote the interests of beneficiaries.
Minister Park Neung-hoo said the new code will serve as an impetus to boost most companies that are financially healthy and that adhere to good corporate governance practices.
The health and welfare ministry oversees the National Pension Service, the world's third-largest pension fund.
"The National Pension Service will ensure that its independence will not be compromised by thoroughly abiding by its responsibility and running the fund in a fair and transparent manner," Park said in a meeting at a Seoul hotel ahead of discussions on whether to introduce a new stewardship guideline.
The National Pension Service is the largest institutional investor in South Korea with 636 trillion won (US$570 billion) under its management. As of July 9, it owned 5 percent or more of 296 publicly traded corporations, including a 9.9 percent stake in top-cap and tech behemoth Samsung Electronics Co.
The state pension fund has come under fire in the past for rubber-stamping key agenda items at shareholder meetings to serve the interests of large shareholders or management.
Source: Yonhap News Agency