Korea Corporate Governance Forum Supports National Pension Service's Shareholder Rights Exercise

[Asia Economy Reporter Hyungsoo Park] The Korea Corporate Governance Forum supported the active shareholder engagement guidelines announced by the National Pension Fund.

According to the Governance Forum on the 1st, “It is a significant advancement that the National Pension Fund introduced sustainability principles (environment, social responsibility, governance), which are fundamental to the existence and growth of companies, beyond financial indicators as fund management principles,” expressing support for the National Pension Fund’s active exercise of shareholder rights.

However, concerns were raised regarding the excessive reflection of business opinions that shareholder rights should be exercised considering “industrial characteristics and corporate conditions.”

The Governance Forum pointed out, “If companies leverage their superior information power by emphasizing ‘industrial characteristics and corporate conditions,’ it may become difficult for the National Pension Fund to proceed with shareholder proposals.”

Regarding violations of laws such as embezzlement and breach of trust, the Forum argued that the shareholder rights exercise procedures should be simplified. The Governance Forum explained, “Illegal matters refer to cases where the risk materializes, damaging corporate value and infringing on shareholder interests,” adding, “Therefore, in cases of embezzlement or breach of trust, the company should be immediately designated as a publicly disclosed focus management company, allowing shareholder rights to be exercised.”

Ryu Young-jae, chairman of the Governance Forum, emphasized, “The National Pension Fund, as the trustee of the public’s retirement funds, must actively exercise shareholder rights to enhance the value of invested companies,” and added, “Now is the time to actively support this.” He also added, “Criticism of pension socialism can wait until after observing the National Pension Fund’s shareholder activities.”

The Korea Corporate Governance Forum was established on December 12 last year with the vision of improving corporate governance in Korea and advancing to a top-tier economy through establishing desirable investor-corporate relationships.