On December 29, 2025, the Stewardship Code Council, the Korea Institute of Corporate Governance and Sustainability (KCGS), and relevant ministries and agencies including the Financial Services Commission, Ministry of Health and Welfare, Ministry of Education, Ministry of Personnel Management, and Korea Post, jointly announced measures to strengthen the effectiveness of the Principles on Institutional Investors’ Stewardship Responsibilities (hereinafter referred to as the “Stewardship Code”).
The Stewardship Code, a set of principles designed to guide institutional investors that manage assets in fulfilling their stewardship responsibilities, was introduced in December 2016 as a private-sector voluntary code.
Over the subsequent 9 years, through December 2025, a total of 249 institutional investors have participated in the Stewardship Code. These include 4 public pension funds, the National Pension Service, the Government Employees Pension Service, the Private School Teachers’ Pension, and Korea Post, as well as 63 asset management companies.
Since its introduction, the Stewardship Code has contributed to more active exercise of shareholder rights by institutional investors. This is evidenced by an increase in the proportion of dissenting votes cast(from 1.84% in March 2016 to 4.59% in March 2024) and a rise in the number of shareholder proposals.
However, the effectiveness of the Stewardship Code has been still limited due to the absence of implementation review, insufficient systematic disclosure, and a lack of alignment with global standards.
It was not possible to recognize the status of compliance with the Stewardship Code of individual participant as the implementation review was not officially provided. And even when participants reported the Stewardship Code implementation, the reports were posted only on their individual websites, resulting in the limitation of information access as well as the lack of comparability. Moreover, such information was difficult to verify for institutions without their own websites.
In addition, unlike stewardship codes of major countries such as the United Kingdom and Japan, which have expanded the scope of stewardship responsibilities to include Environmental, Social and Governance (ESG) factors and diversified the range of applicable assets in response to changing circumstances, the Stewardship Code has never been revised since enactment.
In response to both domestic and international calls to reflect economic and social changes and to enhance the effectiveness of the framework, measures to strengthen the effectiveness of the Stewardship Code have been formulated. These measures include implementation reviews led by a private-sector council, strengthened post-implementation management, expanded disclosure and utilization of implementation review results, and improved alignment with global standards.
First, the implementation review process will be introduced, under which the Stewardship Code Council will conduct the final review and approval.
Participants will prepare the Stewardship Code implementation reports covering 12 implementation review items (to be adjusted as necessary to reflect the sector-specific characteristics). These reports will undergo a practical review, and the Stewardship Code Council will subsequently undertake the final review and approval.
However, where a public pension fund has an independently operated and private sector-led committee, the committee may conduct the implementation review and subsequently share the results with the KCGS.
To minimize potential conflicts of interests in the practical review process, KCGS will physically separate the department responsible for practically supporting the Stewardship Code Council from other departments, such as those providing proxy advisory services, and strict information and personnel barriers (‘Chinese Walls’) will be put in place.
The scope of institutions subject to implementation reviews will initially focus on asset management companies and public pension funds, taking into account their level of preparedness and potential market impact, and will be gradually expanded in phases.
Second, the disclosure and utilization of implementation review results will be expanded.
The reports prepared by participants will not only be posted on the websites of participants but also on the Stewardship Code website.
Furthermore, the consolidated report that enables easy comparison of participants’ compliance with each implementation review item will be made available on the Stewardship Code website.
In addition, compliance with the Stewardship Code among participants will be encouraged through finding and sharing the best practices of high-performing institutions, as well as by sharing implementation review results with public pension funds (asset owners).
Third, Stewardship Code revisions will be pursued to enhance alignment with global standards.
Based on revision cases in major areas (e.g. incorporating ESG factors, extending the applicable asset classes of Stewardship Code beyond domestic listed equities to bond, real estate, and unlisted stocks), the Stewardship Code Council will review and prepare proposed amendments.
In accordance with these measures, the Stewardship Code Council will conduct implementation reviews of asset management companies and public pension funds starting in 2026, gradually expand the scope of such reviews with the publication of annual results on every December, and pursue revisions to the Stewardship Code and its guidelines during the first half of 2026.
The Stewardship Code Council, KCGS, and relevant ministries and agencies, recognizing the strong demand for institutional investors to fulfill their stewardship responsibilities in support of capital market innovation, expect that these measures will serve as a turning point in ensuring that institutional investors appropriately discharge their stewardship responsibility in shareholder activities.
* Please refer to the attached PDF for details.