Rule revision to require NPS to hire multiple advisers for proxy voting Korea’s state pension fund wants to make more professional and objective voting decisions

Translated by Ryu Ho-joung 공개 2021-10-27 08:08:54

이 기사는 2021년 10월 27일 08:07 더벨 유료페이지에 표출된 기사입니다.

South Korea’s National Pension Service (NPS) will revise its operating rules to require the pension fund to hire multiple advisers to help it make proxy voting decisions, a move as part of its efforts to enhance objectivity of its decision making process.

The state pension fund recently revealed a draft revision and asked opinions from the public by November 5.

One of the key changes is the creation of a new Article 36-2 entitled “Advisory Firms Providing Services concerning Trustees’ Duties”. “This will allow us to use advisory firms to help to make more professional and objective proxy voting decisions,” the pension fund said.

The revision will in principle require the NPS to hire two or more advisory firms each for proxy voting on domestic and overseas companies. The pension fund will be also allowed to hire external experts and advisers for advice on important issues that may have a significant impact on shareholder value.

NPS has its own proxy voting guideline and process in place. Its investment committee is largely responsible for making proxy voting decisions. Issues on which investment committee members fail to reach an agreement are discussed by members of the pension fund’s responsible investment committee.

Earlier this year, NPS saw discord between its investment committee and responsible investment committee over some of proxy voting decisions on Samsung Electronics. This highlighted the need to improve the pension fund’s proxy voting process.

The pension fund had approximately 919 trillion won ($787 billion) in assets under management at the end of July 2021, with exposure to domestic and global equities accounting for 19.5% and 26.2% respectively. (Reporting by Hee-yeon Han)
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