기관투자자의 주주활동이 이사회 효과성에 미치는 영향: 국민연금공단 사례를 중심으로

The Impact of Shareholder Engagement on Board Effectiveness: Focusing on the Case of the National Pension Service

Purpose - The purpose of this study is to examine the impact of institutional investors’ shareholder engagements, one of measures of active ownership activities, on board effectiveness. Design/methodology/approach - Using panel data of 3,818 firm-year observations from Korean listed companies during 2020-2023, this study employs OLS regression with firm- and year-fixed effects. Board effectiveness is measured by “board composition and activity” score provided by Sustinvest, while shareholder engagement is proxied by whether a firm was targeted by the National Pension Service (NPS) in its shareholder engagement programs. Findings - The results show that shareholder engagement has a significant positive effect on board effectiveness. Specifically, firms targeted by the NPS demonstrate higher board effectiveness in the following year compared to non-targeted firms. These results confirm the hypothesis that shareholder engagement by institutional investors enhances the effectiveness of the board as a central governance mechanism. Research implications or Originality - This study contributes to the literature by providing empirical evidence from the Korean capital market, where research on private dialogues between institutional investors and management has been limited due to disclosure constraints. The findings underscore that shareholder engagement can enhance corporate governance and foster long-term firm value creation. Moreover, the results offer policy implications for reinforcing the Korean Stewardship Code and advancing the government’s Value-up Program.