The Walker Report recommended that the Financial Reporting Council's remit should be extended to cover a code of best practice in stewardship by institutional investors and fund managers. The FRC launched a consultation on the content, operation and oversight of a stewardship code in January 2010 and the first Stewardship Code for institutional investors was published on 2 July 2010.
The Code
The consultation on an updated code was launched by the FRC on 30 January 2019 and closed on 29 March. The Stewardship Code 2020 and Feedback Statement: Consulting on a revised UK Stewardship Code were published on 24 October 2019, as announced in the press release Revised and strengthened UK Stewardship Code sets new world-leading benchmark.
The FRC launched a review of the Code on 27 February 2024 and in August the FRC published some interim revisions to the code, outlined in this ICAEW Insights article:
FRC rolls out interim shakeup to Stewardship Code.
The latest consultation was launched on the 11 November 2024 in the press release FRC Launches Consultation on Updates to UK Stewardship Code
Online articles
Useful links
Consultations
Improving engagement practices by companies and institutional investorsConsultation document published in October 2012 by the Institute of Chartered Secretaries and Administrators (ICSA) in conjunction with the 2020 Investor Stewardship Working Party.
The ICSA Steering Group published the resulting guidance in March 2013 - Enhancing stewardship dialogue.
Reports and guidance
How to report on the UK Stewardship code
FRC guidance on best practice for reporting on the Code.
Review of stewardship reporting
FRC report which gives an overview of reporting from 2022 so far and outlines the FRC’s expectations for 2023 stewardship reporting
Building an regulatory framework for effective stewardship
Joint FRC/FCA discussion paper, published January 2019. The paper looks at what effective stewardship looks like, expectations for financial services firms and how the UK regulatory framework can best support this.
2020 Stewardship: Improving the quality of investor stewardship
Report published in March 2012 by the 2020 Investor Stewardship Working Party which contains recommendations for improving engagement practices by companies and investors. The Working Party has asked ICSA 'to take forward two of the report’s recommendations, by developing a good practice guide to improve the quality of engagement activity, and identifying more ways for companies and institutional investors to seek and provide feedback on the quality of meetings'.
Archive reports and guidance
The FRC has a UK Stewardship Code archive which shows how the code has developed over the years
2016
The FRC assessed signatories to the Stewardship Code based on the quality of the statements and categorised them into tiers. This exercise was undertaken to improve the transparency of reporting and has also improved the quality of reporting against the code and promoted best practice. Asset managers were categorised into three tiers (tier three was later removed); asset owners and service providers in two tiers.
2012
In April 2012 the FRC launched a review of the UK Stewardship Code. The full text of the consultation paper, Revisions to the UK Stewardship Code, and the Draft revised UK Stewardship Code are available from the FRC website. The consultation period closed on 13 July 2012.
The FRC published a revised UK Stewardship Code and Feedback statement: Revisions to the UK Stewardship Code on 28 September 2012, as announced in the press release FRC publishes updates to UK Corporate Governance Code and Stewardship Code.
2010
The UK Stewardship Code and Implementation of the UK Stewardship Code were published by the FRC on 2 July 2010. The publication of the code was announced in the press release Financial Reporting Council publishes first UK Stewardship Code.
Articles and books in the ICAEW Library collection
Selected articles
Shareholder activism
Economia, No.4. May 2012. pp.46-49
Looks at shareholder activism, particularly prevalent at the moment due to the perceived excesses of executive pay and bonuses. Provides some case histories and considers the difference between shareholder activists and active shareholders among institutional investors. Examines the role of The UK Stewardship Code and The UK Corporate Governance Code.
On the front line
Chartered Secretary, December 2011. pp.33-34
Presents an investor's views on the Stewardship Code. Issues discussed include: engagement of institutional investors in the companies they have interests in; whether the Stewardship Code has changed behaviour; whether there is an alternative to the Stewardship Code; whether the annual report has a role to play in enhancing communications between companies and shareholders.
All change?
Chartered Secretary, December 2011. pp.30-33
The UK Stewardship Code, published in July 2010, aims to enhance engagement between companies and their shareholders. Over a year from then, has it made a difference? This article is in two parts: part 1 is by a company secretary, and part 2 by a registrar.
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