South Korea’s mutual aid associations and asset management firms decided to follow their group leader National Pension Service and apply the so-called stewardship code, a set of guidelines for institutional investors to exert their voting rights to promote investors’ active involvement in corporate management.

The stewardship code was first introduced in the United Kingdom in 2010 with the aim of emphasizing institutional investors’ role to actively engage in corporate asset management as stewards of companies.

According to sources in the industry on Monday, the nation’s largest asset manager Mirae Asset Global Investments Co. with assets under management (AUM) amounting to 90 trillion won ($76.8 billion) is aggressively pushing ahead with its plan to adopt stewardship code. “We are positively considering adoption of the stewardship code in order to promote companies’ transparent management and enhance investors’ interests,” said an unnamed high-level official from the company. Mirae Asset has become the first domestic fund manager who has expressed its willingness to introduce the code.

KB Asset Management Co. is also mulling adoption of the code. “We are giving positive considerations for introducing the stewardship code despite procedural problems,” said Choi Woong-pil from the company.

The nation’s major mutual aid associations are also actively pondering the adoption. The Public Officials Benefit Association plans to select an external adviser within this year to introduce the guideline next year. The nation’s largest and second largest mutual aid associations by assets under management the Korea Teachers’ Credit Union and the Military Mutual Aid Association are also mulling the introduction of the code positively.

According to data released by the Financial Supervisory Service, opposition rate in decision-making of the 50 domestic asset managers in their regular shareholders’ meeting stood at mere 3.8 percent last year, much lower than 23.8 percent of 11 foreign-affiliated asset managers.

According its chief investment officer Kang Myoun-wook, the country’s powerful institutional player NPS overseeing funds of nearly $500 billion is mulling to adopt the stewardship code.

By Choi Jae-won and Song Gwang-sup

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]