The Stewardship Code was released on 02 July 2010

“The FRC is encouraging all institutional investors to report publicly on the extent to which they follow the Code. From the end of September 2010 the FRC will maintain on its website a list of all those who have done so.”  – FRC

These measures are to –

  • Improve the quality of corporate governance
  • Promote better dialogue between shareholders and company Boards
  • Provide more transparency about the way investors oversee the companies they own


The principles of the Code are:-

  • publicly disclose their policy on how they will discharge their stewardship responsibilities.
  • have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.
  • monitor their investee companies.
  • establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.
  • be willing to act collectively with other investors where appropriate.
  • have a clear policy on voting and disclosure of voting activity.
  • report periodically on their stewardship and voting activities.

Link to the Stewardship Code

There is an ongoing debate about:-

  • Cost
  • Applicability
  • Conflict of Interest
  • Cut off point to comply of explain
  • Volume in the case of some investors
  • Risk impact on investment strategy
  • Risk to business value

Link to press article in FT – 12th July 2010 for copy of the newspaper version

and click here to link to FT website versio of the same article.