"National Pension Service Shareholder Rights Exercise, Fund Management Headquarters Must Take Responsibility"

7 Economic Organizations Jointly Host Policy Seminar

Dong-geun Lee, Executive Vice President of the Korea Employers Federation, is delivering a welcome address at the "Policy Seminar on Improving Guidelines for National Pension Governance and Fiduciary Responsibility Activities," hosted by Jae-hyung Choi, a member of the People Power Party, and jointly organized by seven economic organizations (Korea Employers Federation, Korea Listed Companies Association, Korea Chamber of Commerce and Industry, Korea International Trade Association, Federation of Korean Industries, Korea Federation of Medium-sized Enterprises, and Korea Federation of Small and Medium Business) held on the 7th.

[Asia Economy Reporter Kiho Sung] There has been a claim that the National Pension Service's fiduciary responsibility activities and related shareholder rights exercises should be the responsibility of the Fund Management Headquarters, which directly manages the fund.

The "Policy Seminar on Improving the National Pension Governance and Fiduciary Responsibility Activity Guidelines," hosted by Rep. Jaehyung Choi of the People Power Party and jointly organized by seven economic organizations (Korea Employers Federation, Korea Listed Companies Association, Korea Chamber of Commerce and Industry, Korea International Trade Association, Federation of Korean Industries, Korea Federation of Medium-sized Enterprises, and Korea Federation of Small and Medium Business), was held on the 7th at the National Assembly Members' Office Building, Seminar Room 3.

In his welcoming remarks, Donggeun Lee, Executive Vice President of the Korea Employers Federation, proposed, "To incentivize successful pension reform, a package-type pension reform roadmap should be established under the clear policy goal of 'securing fiscal stability' through 'balanced concessions' by each social actor."

Regarding governance restructuring and improvement of fiduciary responsibility activity guidelines, which are important options for pension reform, Vice President Lee, who emphasized the "profitability principle," stated, "The Fund Management Committee should be reorganized to be centered on private investment and financial experts to ensure professionalism and independence in policy decisions, and the exercise of shareholder rights accompanying specific fund management should be responsibly decided by the Fund Management Headquarters that directly manages the fund."

Wooyong Jung, Policy Vice President of the Korea Listed Companies Association, pointed out in his presentation, "The problem lies in the National Pension Service's governance lacking professionalism and independence and fiduciary responsibility activities excessively interfering in corporate management without considering fund returns," and added, "The Fund Management Committee should be reorganized to exclude government appointees and be centered on private experts, and the Fiduciary Responsibility Committee should only perform an advisory role." Ultimately, focusing on increasing returns and stably guaranteeing the public's retirement income is the true fiduciary responsibility activity of the National Pension Service.

Jipyeong Kim, a lawyer at Kim & Chang, stated in his presentation, "Considering the National Pension Service's influence as a major institutional investor in domestic listed companies, improving and supplementing the fiduciary responsibility activity guidelines, including voting rights exercise, is very important," and added, "In the case of derivative lawsuits, comprehensive review of the impact on both the National Pension Service and the target companies is necessary, and considering the importance of time and costs required for litigation, it is desirable for the Fund Management Committee to make the final decision."

Subsequently, a discussion on pension reform took place with participation from Professor Jun Chae of Seoul National University Business School, Professor Samhyun Jeon of Soongsil University Law Department, Jaewoo Nam, Head of Fund & Pension at the Korea Capital Market Institute, and Seokho Son, Head of Social Policy Team at the Korea Employers Federation.

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