The Stewardship Code is a part of

UK company law British company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directive (European Union), Directives and court cases, the company is th ...

concerning principles that institutional investors are expected to follow. It was first released in 2010 by the

Financial Reporting Council The Financial Reporting Council (FRC) is an independent regulator in the UK and Ireland based in London Wall in the City of London, responsible for regulating auditors, accountants and actuaries, and setting the UK's Corporate Governance and ...

('FRC'), and in 2019 the FRC released an updated edition of the Stewardship Code. The UK Stewardship Code (“Code”) is a voluntary code for

asset managers Asset management is a systematic approach to the governance and realization of all value for which a group or entity is responsible. It may apply both to tangible assets (physical objects such as complex process or manufacturing plants, infrastru ...

( investment managers), asset owners, and

service providers A service provider (SP) is an organization that provides services, such as consulting, legal, real estate, communications, storage, and processing services, to other organizations. Although a service provider can be a sub-unit of the organization t ...

(such as proxy advisers, investment consultants, and data providers). Its stated aim is to encourage active and engaged monitoring of

corporate governance Corporate governance refers to the mechanisms, processes, practices, and relations by which corporations are controlled and operated by their boards of directors, managers, shareholders, and stakeholders. Definitions "Corporate governance" may ...

for the interests of beneficiaries. Specifically, the Code aims to promote the responsible allocation, management, and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment, and society. In late 2019, the FRC substantially updated the original 2010 Code introducing new principles for different signatory groups as well as introducing new thematic issues centered on

environmental, social, and governance Environmental, social, and governance (ESG) is shorthand for an investing principle that prioritizes environmental issues, social issues, and corporate governance. Investing with ESG considerations is sometimes referred to as ''responsible inv ...

(ESG) factors. The FRC also introduced a new reporting process.

Preface

The Code sets stewardship standards for asset owners and fund managers (asset managers), and for service providers that support them.Stewardship Code 2020 The Code comprises a set of ‘apply and explain’ Principles for asset managers and asset owners, and a separate set of Principles for service providers (FR
Stewardship Code
The information is also sent to the

, which links to the information provided to it. From March 2021, organisations applying to become signatories to the Code are required to submit an annual stewardship report to the FRC which details how signatories have applied the Code over a 12-month period detailing both their stewardship activities and the resulting outcomes. Unlike the previous edition, the new Code covers all types of investments, not just equities. The compulsion to, at the very least, explain non-compliance with the Code follows from the

Financial Services and Markets Act 2000 Finance refers to monetary resources and to the study and discipline of money, currency, assets and liabilities. As a subject of study, is a field of Business Administration wich study the planning, organizing, leading, and controlling of an o ...

section 2(4) and the

Listing Rules The UK Listing Rules (UKLR) are a set of regulations applicable to any company listed on a United Kingdom stock exchange, subject to the oversight of the Financial Conduct Authority (FCA). The UK Listing Rules set out mandatory standards for any c ...

2020 Principles

The updated Principles for Asset Owners and Managers are: The new Principles for Service Providers are:

Notes

{{Reflist, 2

References

*BW Heineman,
A "Stewardship Code" for Institutional Investors
(18 January 2010) Harvard Business Review blog *M Johnson,

(18 October 2010)

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...

*E McGaughey, 'Do Asset Managers and Banks Control Share Voting Rights on Your Money?' (5 June 2017
Oxford Business Law Blog
*E McGaughey, 'Does Corporate Governance Exclude the Ultimate Investor?' (2016
16(1) Journal of Corporate Law Studies 221
;Government reports * Myners Report (2001), ''Institutional Investment in the United Kingdom: A Review'' on institutional investors, Pdf fil
here
and ''Review of Progress'' Repor
here
* Myners Review (2004) ''Myners principles for institutional investment decision-making: review of progress'
.pdf here
* Walker Review (2009) in response to the financial crisis, and focusing on institutional investors
.pdf document

External links

The Stewardship Code 2020The Stewardship Code 2012
Corporate governance in the United Kingdom 2010 in the United Kingdom

Preface

2020 Principles

See also

Notes

References

External links