S. Korea's state pension fund stresses need to exercise shareholder rights

SEOUL (Yonhap) - South Korea's national pension fund needs to rigorously exercise its shareholder rights as it is a long-term investor with massive assets under management, its head said Thursday.
Controversy has heated up over whether pension funds should exercise their shareholder rights in the country's family-owned conglomerates since Kwak Seung-joon, a key presidential aide, brought up the issue last month.
"Exercising shareholder rights is a global trend and the essence of capitalism. The National Pension Service (NPS) has the need to rigorously exercise its shareholder rights," NPS Chairman Jun Kwang-woo said.
Jun said the NPS, which has 330 trillion won (US$303.6 billion) in assets, has an obligation to preserve and boost the value of the fund under management.
"As the NPS is a long-term investor, it cannot help having an interest in whether companies operate their business with a sense of responsibility," he said.
Kwak argued that pension funds should start exercising their shareholder rights more actively to prevent large companies from falling into complacency, sparking complaints from the business community
The head of the Presidential Council for Future and Vision, said public funds could serve as a "catalyst" for the South Korean economy in improving corporate governance as they could work as a counterbalance to powerful conglomerates.
But the business circle claimed that the move could hamper the independence of private companies and the government could wield its influence through pension funds.