The members of the voting rights decision committee, an outside advisory body of the National Pension Service (NPS), have expressed concerns over the Stewardship Code to be introduced next month.
Most of the committee members said they shared the purpose of the new code: to encourage institutional investors to exert voting rights to improve the long-term profitability and publicness of companies. However, they expressed reservations as the new guideline could cause market disruption if pushed ahead by force without clear outlines.
According to the National Pension Fund Operation Committee on June 28, the Ministry of Health and Welfare (MOHW) has received written opinions on the introduction of the Stewardship Code from the eight members of the voting rights decision committee. Most of them maintained a cautious attitude toward the introduction of the Stewardship Code, according to the head of the committee.
Hwang In-tae, commissioner of the voting rights decision committee and professor of the School of Business & Economics at Chung-Ang University, said, “The expressed views are the opinions of individual members, not a formal view of the voting rights decision committee, so they are not statutory. Most members said the government needs to approach it with caution at the initial stage rather than pushing for far-reaching introduction.”
The MOHW is planning to hold a National Pension Fund Operation Committee meeting and decided on whether to introduce the Stewardship Code as early as July 23. Other members from the voting rights decision committee also support the introduction of Stewardship Code but they are in disagreement with the MOHW on the role of the NPS. Some members said, “The NPS should present a big framework of rules and create a precedent whenever there are specific examples. It also needs to change regulations when needed. The NPS should not put pressure on corporate management.” Also, other members said, “It should not conflict with existing laws, including the commercial law.”