International Stewardship Codes
There is a growing number of Stewardship Codes being developed in jurisdictions worldwide, as well as at an international level. The International Corporate Governance Network (ICGN) maintains a list of the international Codes on its website: https://www.icgn.org/policy/stewardship-codes.
The FRC does not underestimate the level of complexity disclosing against multiple Codes introduces and remained committed to assisting signatories to meet the relevant reporting requirements across jurisdictions.
The FRC does not formally endorse guidance related to investor stewardship produced by third parties. However, Enhancing stewardship dialogue may be of interest to both companies and investors seeking practical tips to improve the quality of their engagement.
PLSA Stewardship Disclosure Framework
In October 2013 the Pensions and Lifetime Savings Association (PLSA) published the PLSA Stewardship Disclosure Framework. This Framework aims to provide pension funds with greater transparency around the stewardship policies and activities of asset manager signatories to the UK Stewardship Code. It provides an ‘at a glance’ comparison between the approaches of different asset managers.
The statements of asset managers who have reported against the framework can be viewed here.
Asset owners may also wish to consult the Stewardship Central microsite maintained by the PLSA.
In March 2011 the Institute of Chartered Accountants in England and Wales (ICAEW) published a Stewardship Supplement to its Technical Release AAF 01/06 - Assurance Reports on the Internal Controls of Service Organisations. This was updated in November 2012 to reflect the changes to the 2012 Stewardship Code.
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 in the Stewardship Code. The FRC would encourage all signatories to the Code to familiarise themselves with this supplement.
The ICAEW has also provided a briefing on who should be able to view reports on internal controls of service organisations and the assurance reports thereon (hereafter, ‘controls reports’) and how difficulties in arranging access can be overcome.
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
In November 2013 ESMA published a statement on shareholder cooperation in circumstances covered by the Takeover Bid Directive. This statement contains a ‘White List’ of activities that shareholders can cooperate on without the presumption of acting in concert. It also contains information on how shareholders may cooperate in order to secure board member appointments.