In Conversation: Preparing for the UK Stewardship Code 2026
Published: 11 November 2025
10 minute read
In this In-Conversation podcast episode, Andrea Tweedie, Head of Stewardship, sits down with Director of Stakeholder Engagement and Corporate Affairs, Kate O’Neill to discuss the FRC's latest report, "Preparing for the UK Stewardship Code 2026 – applying insights from current reporting", and how its findings may help signatories to the UK Stewardship Code through the Code's transition year.
Transcript
00:00:09:21 - 00:00:34:00
Kate O'Neill
Hello and welcome to another FRC In conversation. My name is Kate O'Neill, I'm the Director of Stakeholder Engagement and Corporate Affairs here at the FRC and today I'm joined by Andrea Tweedie, the Head of Stewardship here at the FRC, because today's topic is to talk about our Annual Review of Stewardship Reporting and really dig into so many of the important things that came out of this year's review.
00:00:34:01 - 00:00:35:16
Kate O'Neill
Welcome, Andrea.
00:00:35:18 - 00:00:38:10
Andrea Tweedie
Thanks, Kate. Pleasure to be here.
00:00:38:12 - 00:00:58:08
Kate O'Neill
This review has got a real overlay, and we're gearing it to support signatories transitioning to the UK Stewardship Code 2026, which we obviously announced earlier this year. I mean, can we quickly perhaps a gallop through why we updated the code and what we're trying to achieve with the changes to the code?
00:00:58:10 - 00:01:25:00
Andrea Tweedie
Yes, absolutely. Yeah. So we were really, really delighted to publish the UK Stewardship Code 2026 earlier in the year. And so it follows the previous version that was the UK Stewardship Code 2020. So that one was quite a big step up actually from the version that had been operation in the years before that. And it introduced a lot of new things, like an annual reporting model, reporting on activities and outcomes and not just policies.
00:01:25:02 - 00:01:54:24
Andrea Tweedie
And so we knew that was a big change and a big step up in terms of the expectations of our signatories. So we'd always said after a few years in operation, we would do a review of the code. And that is what led us to the version that we published earlier this year. So what we did with the code, it was actually a result of extensive engagement that we'd done both before and during the consultation period, and that was informed also by four years of us assessing and reading the stewardship reports of our signatories and engaging with signatories as well.
00:01:55:01 - 00:02:19:13
Andrea Tweedie
So we'd had some areas where people were really, really pleased with the improvements in terms of stewardship that had come about from the updated 2020 code. But we'd also heard increasingly about concerns on reporting burden and the length of reports increasing. So those were actively some of the things we've sought to address in our updated code mantra.
00:02:19:17 - 00:02:58:08
Kate O'Neill
It's really interesting because obviously the 2020 code was the first code of its kind. And as you say, those years following its publication really were the chance for both the fund managers signatories, but also asset owners, proxy agencies, other parts of the investment chain to really test, I guess, what stewardship means, what it requires, what's involved. So, I mean, were you surprised by the consultation period in the many, many like or engagement that we did to hear that reporting had become a key challenge or a key consideration for signatories of the code?
00:02:58:10 - 00:03:30:18
Andrea Tweedie
Yeah, it was really interesting, all the different views that came up about reporting. And so we did hear quite a bit in terms of you know, the amount of time and effort and resource that is required to produce the stewardship report to be a stewardship Code signatory. But we had also heard how useful so many of the signatories find it, in order to then be able to have a framework that they can use to then articulate what they're doing in terms of their stewardship approach, and that's useful for them internally, but also useful for them externally.
00:03:30:20 - 00:03:50:09
Andrea Tweedie
Whether that is with clients, prospective clients, beneficiaries or, you know, any other wider stakeholders, we really wanted to preserve and enhance the things about reporting that was serving our signatories well and playing a really useful role, but see what we could do to help reduce some of that reporting burden.
00:03:50:11 - 00:04:07:05
Kate O'Neill
And in the review, obviously give some great examples of good reporting and review. What would you say the important elements the first signatory they should be considering when they're reporting, because they're not just reporting for the sake of it. Right. Andrea, this is about outcomes.
00:04:07:07 - 00:04:31:21
Andrea Tweedie
Exactly. And this isn't just about saying here a wonderful stewardship policies, but it's about showing what are you actually doing with it? How are you putting those policies into practice? And that's why we've got the focus on not only your policy in context disclosures, but also looking at your activities and outcomes report and being able to show what are you achieving in terms of your stewardship activities.
00:04:31:23 - 00:04:51:07
Andrea Tweedie
And so, as you said before, Kate, we've done this report a little bit differently, perhaps, to how we've done them in the past, given the fact that we are looking ahead to implement the updated code. So we really wanted to see where we could really highlight signatories and to prospective signatories as well, who might still be quite familiar with the 2020 code.
00:04:51:09 - 00:05:08:02
Andrea Tweedie
You know, we've talked about it as being an evolution of the code, not a revolution. So we've already got some really good reporting that we're seeing from current signatories. That will still be good reporting when we're looking for people to address the 2026 code, as well.
00:05:08:04 - 00:05:17:23
Kate O'Neill
So really, if the basics are in place for you, this should not be a massive step change. It might be that you want to look at it through a different, more refined lens.
00:05:18:00 - 00:05:44:06
Andrea Tweedie
That's exactly it. And I think it's then focusing on some of those elements around how are you finding a really good balance of, you know, explaining to read is, you know, what the context of your organization is, what you stewardship policies are, what's important to you, what is the approach that you're taking so that that is clear? And then also pairing that with how your reporting on activities and outcomes.
00:05:44:06 - 00:05:48:16
Andrea Tweedie
So finding a way to make those work well together.
00:05:48:18 - 00:06:04:00
Kate O'Neill
Also in the 2026 code the definition has changed. And I know that was a hot topic for many of our signatories across the whole of the investment chain. Do you want to remind our listeners what the main changes to the definition have been in the new code?
00:06:04:02 - 00:06:45:18
Andrea Tweedie
So our definition for stewardship is the responsible allocation, management and oversight of capital to create long term sustainable value for clients and beneficiaries. And so it really is focusing on that long term sustainable value for clients. And beneficiaries. What we want for signatories to do is really think about how they are articulating through their responses to the principles of the code, how they are taking on that responsibility, what are they considering as the material factors, as investors, to make their well informed investment decisions that are creating long term sustainable value?
00:06:45:20 - 00:06:58:00
Kate O'Neill
Maybe people would think, why are you reminding us of this? Of course, it is not the job to set out to fund managers how they should undertake stewardship. It is for them to come up with their investment philosophy.
00:06:58:02 - 00:07:24:07
Andrea Tweedie
Exactly. That's it. We are not the ones who are making investment decisions here. We are playing an important role in terms of maintaining the signatory list. But we're really not the only audience for these reports, and this is a great opportunity for those in the investment chain to articulate what their priorities are and why, and how their stewardship supports them to deliver on their investment objectives.
00:07:24:09 - 00:07:42:00
Kate O'Neill
That's a really important focus for this new code is which is responsibilities on the signatories. But it has to be brought to life through the reporting. The new code introduced the two part reporting structure. So how does this kind of work and is this a big change for signatories.
00:07:42:02 - 00:08:10:00
Andrea Tweedie
Yes. That you know it is a bit of a change. So previously signatories have been reporting within every principal year on year on their policy and context as well as then the activities and outcomes. And so this was something that came up quite a bit during our consultation process, but also actually we noticed it from the reports we've received over the years, is that when you're talking about your policies and the context of your stewardship, that's not really changing as much year on year.
00:08:10:01 - 00:08:30:19
Andrea Tweedie
Of course, there will be some changes over time, but that can be information that is perhaps a little bit more static. And so what we were hearing and what we were also reading in reports, is we were then getting reports that were getting longer, and perhaps the more year on year, exciting information about what you've been doing in that past 12 months with maybe getting a bit lost or hidden.
00:08:30:24 - 00:09:01:05
Andrea Tweedie
So we've given signatories the opportunity now to do a separate policy and context disclosure that they could submit to us every four years. And then if there aren't any changes that mean it wouldn't then align with what they're reporting year on year, we're not putting pressure on signatories to then update that and submit it to us any more regularly than those four years, which then also gives them the opportunity to do a separate standalone activities and outcomes report.
00:09:01:05 - 00:09:08:16
Andrea Tweedie
That's perhaps there is more exciting things that are saying in the past 12 months. This is how we've actually been putting our policies into practice.
00:09:08:18 - 00:09:25:11
Kate O'Neill
And we've just recently published first guidance for the code. That was after the extensive consultation we did with stakeholders, both pre consultation and during the formal consultation. We've not done that before. So why have we created this guidance and how are you hoping it will be used.
00:09:25:13 - 00:09:47:04
Andrea Tweedie
So it is it's really exciting for us to have the guidance out and published. Now. We had heard throughout the consultation that people would appreciate some reporting guidance. Then what we want to do is we want to find the balance between how much we're putting into the code itself. So what we've also done in the 2026 code is we've got how to report from underneath each principal.
00:09:47:04 - 00:10:15:00
Andrea Tweedie
And those are exactly what they say they are. So that is, you know, prompting signatories to think about how they can report to show how they have applied the principle. But that's a little bit of a step away from the previous reporting expectations we had. And we had feedback that people found. In some cases, the reporting expectations were being read, perhaps being a bit more directive or prescriptive than we would want them to be for a principles based code.
00:10:15:02 - 00:10:47:10
Andrea Tweedie
So by going a bit higher level in the principles of the code itself, we're then providing the guidance which is absolutely supporting reporting guidance. It's not mandatory, but it's there to support those who want some more information about how they could report well on different principles. It's bringing out some of the things we would expect to see from different signatories, perhaps depending on whether they're an asset owner or asset manager, whether they're invested in listed equity or non-equity asset classes.
00:10:47:12 - 00:10:58:23
Kate O'Neill
Absolutely. And I think across the whole, if I say we always play with our listeners that this is guidance, it's supposed to be what it says on the tin guidance is not part of the code, though. Correct?
00:10:59:00 - 00:11:15:18
Andrea Tweedie
That's exactly right. It is not an additional expectation over and above what's in the code itself, but it is designed to sit well alongside it and be somewhere that signatories and prospective signatories to look to greater understanding of what reporting to the code can look like.
00:11:15:20 - 00:11:31:03
Kate O'Neill
2026 the transition year mean? What does that mean? Does everyone have to come out the baby in the bathwater and start again? Or do you be recommending that they've they've got some solid foundations to really look at what you've already got and how you can use it in your reporting against the code?
00:11:31:05 - 00:11:54:08
Andrea Tweedie
Exactly. We think that by having 2026 is a transition year. And just to clarify what we mean by that transition year is that for those who are already existing signatories, when they report to the 2026 code for the first time next year, that won't be a pass fail decision associated with that. They will remain on the signatory list, but they do need to submit a report to us.
00:11:54:12 - 00:12:15:04
Andrea Tweedie
But we think this is something that they could use as an opportunity to rethink their reporting. If that is something that they've been wanting to do, and maybe exploring that separate policy and context disclosure from your annual activities and outcomes report. But absolutely, there's no pressure on signatories to start from a blank page if that is not something that they want to do.
00:12:15:04 - 00:12:25:11
Andrea Tweedie
So if you are already reporting and really happy with the structure and cadence of reporting, you've got on stewardship currently, then that is a great place for you to be. Starting from.
00:12:25:13 - 00:12:56:19
Kate O'Neill
Fantastic. So during the stakeholder engagement, one thing we consistently heard was the importance of good stewardship, which is great, but also how the code has set such high standards that being a signatory, it's important. Do you think this will continue to strengthen not just stewardship across the UK investment industry, but the global signatories to the code have really signed up to a standard that is the gold standard of stewardship across the whole of the global investment community.
00:12:56:21 - 00:13:23:15
Andrea Tweedie
Absolutely. We have been so pleased over the past few years to see the growth in not only the number of signatories, but also in just the breadth of the different types of signatories we got. And I think that does really speak to both, I think, the importance and the reputation of the code. But also, I think to it being so flexible to be able to be useful and applied that widely across the asset management industry.
00:13:23:17 - 00:13:51:23
Andrea Tweedie
And that's something that we do really want to be taken forward. And what we want to see from reporting to the 2026 code is reporting that is useful not only for the purposes of becoming a signatory, but then useful in terms of broader communication with other stakeholders. Useful in terms of, you know, supporting the important conversations that happen through the investment chain, for example, between a pension fund and their asset managers.
00:13:51:23 - 00:13:58:17
Andrea Tweedie
And that should really be able to provide a great starting point for having those conversations.
00:13:58:19 - 00:14:24:23
Kate O'Neill
Well, thank thanks for bringing to life what is a must read, because this is an important review, particularly as we go into the transition year for stewardship reporting. And I guess the key message, as I've heard is guidance is guidance. It's not part of the code, but also this is helping the signatories to the code really tell their own stories in different ways, with different time frames to really bring to life how they undertake stewardship for their beneficiaries.
00:14:24:23 - 00:14:36:07
Kate O'Neill
So thank you. And please do look at the review. Andrew. I guess you in the team are always happy to hear from stakeholders, all the countries, just their views on anything you've brought up in the ravine.
00:14:36:09 - 00:14:58:18
Andrea Tweedie
Absolutely. We would really encourage any signatories who are looking ahead to report in 2026 and, you know, might have some specific questions about how to approach it, or they're thinking about making changes and want to clarify something, we'd really encourage them to get in touch with us. And there are also other useful resources and further information about the code about how to apply to become a signatory.
00:14:58:20 - 00:15:02:23
Andrea Tweedie
Some FAQs on our website as well. So really encourage people to have a look there.
00:15:03:00 - 00:15:07:22
Kate O'Neill
Thanks again, Andrea, and thanks to all of you on your breath off in conversation.