Three South Korean lawmakers have emphasized the importance of improving the governance structure of Korean companies and urged pension funds to take an active role in this effort, the e-Daily reported on Thursday (June 25).

Democratic Party of Korea members Lee Yong-woo, Hong Sung-kook and Kim Byung-wook, who are all involved in financial and capital markets, were speaking at a seminar titled “The Role of Pension Funds for Korea Premium Era” at the National Assembly.

“It is still inappropriate to mention the `Korea premium’ in the capital market,” Lee commented. “The pension funds should show the direction of investment and present it to others.”

Lee, who was a co-chairman of Kakao Bank before being elected as a lawmaker, started his career with an economic research institute and has served as chief investment officer at an asset management firm.

He cited U.S. asset management giant BlackRock’s refusal to invest in fossil fuel-based companies, contrasting it with  companies that had poor governance records.

Hong, who is also a first-term lawmaker and a former CEO of Mirae Asset Daewoo, one of South Korea’s leading securities firms, agreed that “The role of the pension funds is more important than ever.” He stressed that the funds should take the lead in using ESG (environment, social and governance) investment guidelines.

Kim a second-term lawmaker, and former member of the Korea Financial Investment Association, added, “The Korean stock market is undervalued due to low dividends and a controversial corporate governance structure. The process of considering what role pension funds should play in the process will be meaningful.” (Reporting by Kyoungho Lee)