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Seven Principles

The Korea Stewardship Code sets forth the following seven principles as a soft law:

• Principle 1Institutional investors, as a steward of assets entrusted by their clients, beneficiaries, etc., to take care of and manage, should formulate and publicly disclose a clear policy to faithfully implement their responsibilities
• Principle 2Institutional investors should formulate and publicly disclose an effective and clear policy as to how to resolve actual or potential problems arising from conflicts of interest in the course of their stewardship activities.
• Principle 3Institutional investors should regularly monitor investee companies in order to enhance investee companies’ mid- to long-term value and thereby protect and raise their investment value.
• Principle 4 While institutional investors should aim to form a consensus with investee companies, where necessary, they should formulate internal guidelines on the timeline, procedures, and methods for stewardship activities.
• Principle 5Institutional investors should formulate and publicly disclose a voting policy that includes guidelines, procedures, and detailed standards for exercising votes in a faithful manner, and publicly disclose voting records and the reasons for each vote so as to allow the verification of the appropriateness of their voting activities.
• Principle 6Institutional investors should regularly report their voting and stewardship activities to their clients or beneficiaries.
• Principle 7Institutional investors should have the capabilities and expertise required to implement stewardship responsibilities in an active and effective manner.