* Code designed to improve corporate governance, returns
* World's biggest public pension fund owns $218 bln of Japan
* GPIF's adoption likely to encourage others to follow suit
(Adds GPIF's stock holding, comments from officials, context)
By Chikafumi Hodo
TOKYO, May 30 Japan's Government Pension
Investment Fund (GPIF) plans to adopt new government guidelines
for institutional investors designed to improve corporate
governance and investment returns.
The $1.26 trillion fund in a statement on Friday said it is
important to adopt the Japanese Stewardship Code, which calls on
shareholders to disclose how they vote at annual general
meetings and engage more actively with company management.
The ultimate aim of the code is to stoke economic growth.
The world's largest public pension fund had been widely
expected to adopt the code after the recommendation of a
government advisory panel appointed in November.
The fund had 22.15 trillion yen ($218 billion) invested in
Japanese equities as of the end of December, accounting for
almost 17 percent of its total portfolio.
With GPIF adopting the code, other institutional investors
could follow suit, government officials familiar with the matter
The code was compiled as a part of Prime Minister Shinzo
Abe's drive to stimulate the economy, and was inspired by the
U.K. Stewardship Code of 2010.
That code was conceived after the global financial crisis of
2008 when institutional investors were widely criticised for not
monitoring more closely the management of companies they owned.
($1 = 101.5450 Japanese Yen)
(Editing by Chang-Ran Kim and Christopher Cushing)