[Capital Market Reform 3.0] Professor Park Kyung-seo: "The National Pension’s Non-Participation in the Stewardship Code Is a Comedy" (2017.02.10.)

On December 19, the Stewardship Code Drafting Committee promulgated the Korea Stewardship Code. The Stewardship Code is a set of guidelines for exercising voting rights, intended for institutional investors such as pension funds like the National Pension and asset management companies. However, not a single institutional investor in Korea has adopted it. The National Pension, the largest institutional investor, has not participated either. The Korea Corporate Governance Service and others drafted the Stewardship Code, but since no one has adopted and introduced it, the question of its effectiveness has come under scrutiny.

Professor Park Kyung-seo of Korea University, who took part in drafting the Stewardship Code, argued that actively introducing the Stewardship Code is essential to improving Korea’s currently backward corporate governance.

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If so, what aspects do you think need to be supplemented?

"The Stewardship Code that was passed this time, centered mainly on principles, needs to be filled in with detailed guidelines after its introduction. That is different from having binding force. This is to minimize the confusion that could arise when institutions follow the Stewardship Code. Unless they are told exactly what to do in detail, institutions in Korea tend to constantly ask the regulator for guidance and follow it passively. To resolve this, more detailed content needs to be supplemented going forward."

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