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FSC chairman held a meeting on Stewardship Code

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FSC chairman Yim Jong-yong held a meeting on February 13, 2017 with institutional investors who are planning or under consideration for the introduction of Korean stewardship code established in December last year by a Korea Corporate Governance Service (KCGS)-led committee.

The stewardship code is a guideline for institutional investors including pension funds and asset managers to help them exercise their fiduciary duty by actively participating in a company’s management decision in their clients’ interests. Since first introduced in the U.K in 2010 in the aftermath of the 2008 global financial crisis, stewardship code has been adopted in 10 countries across the world including Netherlands, Canada, Switzerland, Italy, Japan, Malaysia, Hong Kong and Taiwan.

At the meeting, Chairman Yim pointed out positive impacts from three perspectives with the introduction of stewardship code in Korea:

First, from institutional investors’ perspective, it will provide an opportunity to gain greater trust from their clients. Under the stewardship code, institutional investors will exercise their shareholders’ rights in the interests of their clients, which will assure clients that their assets are managed safely and effectively.

Second, from the view point of companies, it will bring an opportunity for sustainable growth by holding them in check by institutional investors and prompting improvement of corporate governance and business & management strategies.

Third, from the perspective of Korea’s capital markets, it will boost our markets’ attractiveness to foreign investors by cultivating a culture which enables reasonable management decision in a company and focuses more on mid-to-long term growth than short-term profits.