History of the UK 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;
- 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.
The UK Stewardship Code 2010
The FRC consulted in January 2010 on whether it should accept oversight of the ISC Code in its current form or whether changes should be made. The FRC also asked 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.
The consultation document issued in 2010 and its responses can be read here. In July 2010, the FRC published the first UK Stewardship Code (PDF) and a report (PDF) summarising the actions taken and explaining how the Code was intended to operate.
The UK Stewardship Code 2012
A revised version of the Code was published in September 2012. Changes included the clarification of the respective responsibilities of asset managers and asset owners for stewardship, clearer explanations on conflicts of interest and for greater assurance of stewardship activities to be provided.
The Consultation document for the 2012 revision of the Code can be found here (see also the Appendix to the Consultation document). In September 2012, the FRC also published a Feedback statement on the revised 2012 UK Stewardship Code.
Tiering of 2012 Stewardship Code Signatories
In 2016 the FRC assessed signatories based on the quality of their Code statements. The tiering distinguished between signatories who reported well and demonstrated their commitment to stewardship, and those where reporting improvements were needed.
The UK Stewardship Code 2012 has now been discontinued and the 2012 Signatory list is no longer active. Please find here the list of signatories as at 31 December 2019.
The UK Stewardship Code 2020
The UK Stewardship Code was revised following a consultation which closed on 29 March 2019. Read the consultation and Feedback Statement here.
Alongside the consultation, the FRC, jointly with the Financial Conduct Authority (FCA), published a Discussion Paper: Building a regulatory framework for effective stewardship (DP 19/1). The FCA published a Feedback Statement in response to the feedback received by the FRC, and within the scope of the FCA’s regulatory responsibilities.
The FRC has coordinated closely with the FCA to consider the responses to the Discussion Paper and the appropriate interaction between the Code and regulatory requirements to encourage effective stewardship.
In October 2019, a substantially revised and strengthened UK Stewardship Code was published and took effect on 1 January 2020. The revised version is a set of 12 ‘apply and explain’ Principles for asset managers and asset owners, and a separate set of six Principles for service providers.
For more about the UK Stewardship Code 2020 please click here.