KIC adopts stewardship principles

KIC CEO Choi Hee-nam

By Lee Kyung-min

Korea Investment Corp. (KIC) has adopted a stewardship code in a bid to play a more active role in corporate management as a major shareholder and ensure “responsible investment,” the country's sovereign wealth fund said Monday.

KIC will consider exercising its shareholder rights through active engagement in key decisions of the companies it invests in, thereby helping them with sound and transparent corporate management.

The code, which outlines seven principles expected to be followed by institutional investors, applies to entities that manage assets on behalf of institutional shareholders such as pension funds, investment trusts and other collective investment vehicles.

KIC said the seven principles were set up in accordance with global standards upheld by noted relevant international consultative bodies and was modeled after various exemplary fund management in advanced countries.

Under the principle, KIC will review issues that could influence the mid- to long-term investment value including return on investment, risk management and corporate restructuring.

It will also seek cooperation with global counterparts with whom it shares such a vision.

In the process, KIC will disclose its own level of compliance with the principles following gradual yet thorough implementation of specific tasks.

“The implementation of the code will help us with sustainable profitability, maintaining good reputation and boosting our standing in the global stage,” a KIC official said.

“We seek to generate sustainable returns through stable long-term risk management and establish a system for better protection of shareholder rights, thereby becoming a leading sovereign wealth fund.”

KIC will soon initiate $300 million in corporate social investment through a global asset management fund as part of its initiative to prioritize values on environmental and social governance.