Discussion on unification of litigation rights for the National Pension Service, ‘Will it be the first year of the representative lawsuit?’

When the National Pension Service decided to unify the authority to file multiple representative lawsuits (representative lawsuits) from the Fund Management Headquarters and the Trustee Responsibility Expert Committee, the business community protested. Interest is focused on whether this year will be the first year of the activation of the National Pension Stewardship Code.

According to the Corporation and the Korea Economic Daily on the 10th, the National Pension Fund Management Committee made 13 items including the unification of representative lawsuits on the 24th of last month, △Expanding the scope of decisions on non-management participation by the Trustee Responsibility Specialty Committee, and △The establishment of key management issues related to climate change and industrial accidents. The revised guidelines for fiduciary responsibility activities composed of After the discussion was halted due to a lack of a quorum, an 11-item written resolution was attempted again, except for the expansion of the scope of decision-making on non-management participation shareholder proposals, which were not discussed at the meeting on the 28th of the same month, and the establishment of key management issues such as climate change. It was defeated by 3 people. A trustee responsibility expert explained, “This is just a formal revision that unifies the authority to make a representative lawsuit, which the Fund Management Headquarters holds in principle and is exceptionally performed by the trustee responsibility committee.”

The business world sees it as a suspending operation to revitalize representative lawsuits. Sohn Seok-ho, head of the social policy team at the Korea Economic Daily, said, “In a situation where the fund management headquarters has never filed a representative lawsuit, it is difficult to accept the transfer to the Trustee Responsibility Specialist Committee as a mere formal revision. Wouldn’t it be right for the fund management committee to be fully representative?” he said.

According to the stewardship code roadmap, the Korea Federation of Economy and Finance (KEF) interprets this year as the year when representative lawsuits begin, and consequently, the decision-making process is slimmed down. The Corporation introduced the stewardship code in July 2018 and established a roadmap, setting this year as the time to start filing a representative lawsuit. After that, in 2019, the domestic pension fund introduced guidelines for fiduciary responsibility activities for domestic stocks to allow representative lawsuits, and guidelines for exercising voting rights for domestic stocks were also prepared last year.

The Stewardship Code is a voluntary code that puts the trustee’s rights and interests first while institutional investors manage investors’ money. The Corporation is investing in a fund using the National Pension Insurance premium, which is the national retirement fund. Even though the people’s rights and interests should be put first, they did not exercise their voting rights on so-called ‘problem companies’, such as POSCO, where serious accidents have increased, and financial holding companies that have been involved in recruitment irregularities. There has been no representative litigation since 2018, which is an active fiduciary relief activity.


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