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The Korea Herald
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THE INVESTOR
March 29, 2024

Finance

KIM 1st AMC to adopt Stewardship Code

  • PUBLISHED :July 20, 2017 - 16:34
  • UPDATED :July 20, 2017 - 16:34
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[THE INVESTOR] Korea Investment Management has become the first local asset management company, and fourth firm, to adopt the Stewardship Code, according to Korea Corporate Governance Service.

“The adoption by KIM is likely to encourage other firms to follow suit,” said a KCGS official.

The code is a set of guidelines designed to promote responsible investment practices among investors to engage more actively in corporate governance and board decisions due to the risk of using undisclosed information.




It was first unveiled in December last year but institutional investors have been reluctant to adopt it, citing disclosure requirements.

Since then, only three private equity companies -- JKL Partners, STIC Investments and Ideal Private Equity -- out of around 300 firms have joined.

Industry watchers, however, now expect the pace of participation to pick up, now that more detailed guidelines have been released.

The National Pension Service, Korea’s largest institutional investor managing around US$500 billion assets, is also mulling adoption to give other institutional investors a cue.

The NPS has been plagued with complaints about how it exercises its voting rights. As of late 2016, it owned some 102.6 trillion won (US$90.8 billion) stock assets in listed domestic companies. As per latest available statistics, it has stake of more than 5 percent in 285 listed companies. But the controversial 2015 merger between Samsung C&T and Cheil Industries cast doubts on its investment activities.

As of July 18, a total of 43 institutional investors including nine AMCs have expressed interest in joining, according to KCGS.

The Stewardship Code was first introduced in the UK in 2010. It has now been adopted in 12 countries around the world.

The Korean scheme was designed by the state-run KCGS and includes guidelines calling for investors to publicly share the specifics of and grounds for exercising voting rights and regularly reporting on them to customers and beneficiaries.

By Park Ga-young (gypark@heraldcorp.com)

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