The pension operator would also make proposals at shareholders meetings, recommend director candidates, engage in proxy fights, and file shareholder derivative suits or damages lawsuits.

In addition, the report calls for the NPS to disclose such shareholder activities in a timely manner in order to ensure that the activities be carried out responsibly and transparently.

The report stressed that the state pension operator should keep close tabs on invested firms' financial policies, including leverage, investment and dividends, as well as such nonfinancial factors as governance, executive compensation and the composition of their boards.

Meanwhile, Health and Welfare Minister Park Neung-hoo said recently that the NPS' decision-making Investment Management Office may deliberate on the draft report in July, hinting the introduction of the stewardship code may be advanced. The ministry had originally planned to implement the code around the end of this year.

The NPS began work on introducing the code in December last year amid intense criticism over its approval of Samsung Group's two flagship units, which came to light following a massive influence-peddling scandal involving a close confidante of ousted President Park Geun-hye.

Improving South Korea's corporate governance through the NPS' introduction of the stewardship code was one of President Moon Jae-in's campaign promises.

Despite holding major stakes in local firms, the NPS has been under flak for rubber-stamping key agenda items at shareholder meetings to serve the interests of large shareholders or management rather than small investors.

The NPS had 602.7 trillion won ($561 billion) under its management at the end of August last year, making it one of the three biggest pension operators in the world. South Korea introduced the state pension program in 1988 to guarantee income for the elderly after retirement, and to provide coverage for disabilities and surviving family members. (Yonhap)