Related Documents

This page provides further information relevant to the UK Stewardship Code.

Background to the Stewardship Code

In his report on the governance of banks and other financial institutions, published in November 2009, Sir David Walker recommended that the FRC’s remit should be extended to cover the development and encouragement of adherence by institutional investors to best practice in stewardship of UK listed companies; that the FRC should ratify and regularly review the Code on the Responsibilities of Institutional Investors issued by the Institutional Shareholders’ Committee (ISC); and that this Code should operate on a “comply or explain” basis with appropriately independent monitoring.

Following a request from the then Government that the FRC take responsibility for a stewardship code, the FRC consulted in January 2010 on whether it should accept oversight of the ISC Code in its current form, or whether amendments should be made before the FRC does so. Views were also sought on which institutional investors and agents should be encouraged to apply the code, what they should be asked to disclose and to whom, and the monitoring arrangements that should be put in place.

 Stewardship Code consultation document

Responses to the consultation can be found at: http://www.frc.org.uk/corporate/stewardship.cfm.

Collective Engagement

We would encourage any organisations with questions about the extent to which more active shareholder engagement would be consistent with the existing UK regulatory regime to consult the following two documents:

 An open letter from the Financial Services Authority to the Institutional Shareholders’ Committee (2009)

 Practice Statement 26 from the Takeover Panel on Shareholder Activism

Interim Monitoring Report

The IMA’s report on ‘Adherence to the FRC’s Stewardship Code' as at 30 September 2010 is now available.

Technical Release AAF 01/06 - Assurance Reports on the Internal Controls of Service Organisations

The Institute of Chartered Accountants in England and Wales (ICAEW) has published their Stewardship Supplement to Technical Release AAF 01/06 at http://www.icaew.com/en/technical/audit-and-assurance/assurance/technical-release-aaf-01-06.

Technical Release AAF 01/06 covers assurance reports on internal controls of service organisations made available to third parties, and is referred to in the guidance notes within the Stewardship Code. We would encourage all signatories to the Code to familiarise themselves with the supplement, if they have not already done so.

Speeches delivered by members of the FRC on the topic of the Stewardship Code 

Baroness Hogg, FRC Chairman, at the NAPF Investment Conference in Edinburgh on 10 March 2011

Stephen Haddrill, FRC CEO, at the Yale Governance Forum on 17 June 2010

Peter Montagnon, FRC Senior Investment Adviser, at the Council of Institutional Investors Spring Meeting in Washington, D.C. on 5 April 2011