NPS to focus more on corporate governance, says new CIO

Seo Won-joo [Source : News1]

National Pension Service, Korea’s biggest institutional investor that is also the world’s third largest pension fund with 900 trillion won ($709 billion) assets under management, will play a more active role in corporate management to encourage responsible and sustainable growth, its newly appointed chief investment officer said.

“National Pension Service as a public fund operator has strived to encourage corporates on responsible management practices while seeking stable returns for the long term, and it will continue its efforts with responsible investment,” said Seo Won-joo in his first news conference as the new chief of National Pension Service Investment Management, the investment management arm of the public fund. Seo was appointed on Tuesday.

Seo stressed the transparency in corporate governance structure, especially in companies with multiple major shareholders. His comment comes after Kim Tae-hyun, chief executive officer of the National Pension Service, early this month criticized that many firms are not clear in standards for appointing top executives. Those firms with a dispersed ownership structure, such as KT and POSCO, should choose the chief operating officer through a process that is objective, transparent, and rational, said Seo. Easing the concerns over unfairness in CEO appointments would lead to an increase in shareholder value, he added.

There are concerns about such firms extending terms of their chiefs without objective judgment, Seo reminded as he hoped KT to “set a good example.” The CEO selection committee of KT, Korea’s major mobile carrier, recently approved extending the term of its CEO, Koo Hyun-mo. Koo, however, proposed to the board of directors of having an election contest. NPS owns a 10.35 percent stake in KT.

As of the end of September, NPS has 896.6 trillion won in assets under management. It made 50.4 percent of financial investment in the domestic market and 49.6 percent abroad. Investment in domestic bonds accounted for 34 percent, exceeding 300 trillion won in value.