NPS to expand stewardship code and active shareholder rights

(NPS)

South Korea’s National Pension Service (NPS) is moving to broaden the scope of its stewardship code and strengthen active shareholder engagement, a shift that is drawing renewed attention amid concerns over growing policy and political influence on fund management.

According to the Ministry of Health and Welfare on Monday, the NPS plans to expand the application of its stewardship code ahead of the upcoming March shareholder meeting season, including more proactive use of voting rights. NPS President Kim Sung-joo said during the ministry’s policy briefing on Jan. 14 that the fund would further strengthen its responsible investment principles and extend environmental, social and governance (ESG) strategies across all areas of management.

“Where necessary, we will exercise voting rights to safeguard both corporate long-term value and pension returns,” Kim said, emphasizing a more assertive stance on shareholder responsibilities.

The NPS already wields considerable influence in South Korea’s capital markets. According to FnGuide, the pension fund holds stakes of 5 percent or more in 267 listed companies. At the same time, financial authorities have recently signaled plans to tighten shareholder oversight in the reappointment process of chief executives at financial holding companies, raising expectations of stricter supervision over board independence, governance committee operations and the alignment between performance and executive compensation.

Beyond capital markets, the NPS is also preparing to expand its role in the welfare sector. The fund plans to actively promote public trust services, including programs targeting dementia patients, as part of broader efforts to reinforce its public mandate.