Seowonju National Pension Fund Director: "Need to Improve Governance of Widely Held Companies"

"Seeking Ways to Achieve Stable Returns While Reducing Risk"

[Asia Economy Reporter Kwangho Lee] Seowonju, the newly appointed Fund Director (Head of Fund Management Headquarters) of the National Pension Service (NPS), emphasized the need to improve the governance of companies with ownership structures dispersed among multiple shareholders.

After his appointment, Director Seo held a press conference at the NPS Seoul Northern Regional Headquarters in Seodaemun-gu, Seoul, stating, "For companies with dispersed ownership, CEO appointments must be based on objective, rational, and transparent criteria to resolve concerns about unfair competition, self-renewal, or emperor-like reappointments, and to align with shareholder value." He pointed out, "If opportunities are discriminated against within the board or external participation is restricted, shareholders may be forced to choose one person without knowing potential candidates."

Director Seo said, "Candidates should be given opportunities without restrictions through open calls to find the best fit both internally and externally," adding, "To prevent concerns about self-renewal, the nomination committee should be composed of reputable and neutral new members rather than existing directors to ensure fairness."

He cited KT as an example. Although KT CEO Koo Hyun-mo received a qualification for reappointment from the CEO Candidate Screening Committee, he voluntarily opted for a competitive election, which is currently underway.

He emphasized, "If the KT CEO appointment is conducted through a competitive election considering the criteria I mentioned, it will not be suspected by the market as a mere formality for the incumbent CEO, and the opportunity will be a fair competition."

He added, "From the National Pension Service's perspective, this can also contribute to enhancing shareholder value," and expressed hope that "KT will establish good practices through this opportunity."

Regarding fund management direction, he said, "The most important thing is to achieve maximum performance." Despite the global pandemic, the fund has recorded an average annual return of over 10%, but this year it has been significantly negatively affected by worsening market conditions such as global inflation. However, for long-term investors like the National Pension Service, the recent difficult conditions present another opportunity."

He also stated, "We will pool fund management expertise and investment capabilities to thoroughly consider risks and flexibly and strategically devise and execute portfolio and investment strategies," emphasizing, "As a public long-term pension fund, we will seek ways to reduce risks while achieving stable returns."