In Conversation: UK Stewardship Code 2026 - What you need to know
Published: 4 September 2025
9 minute read
For this In Conversation podcast episode, Kate O'Neill, Director of Stakeholder Engagement and Corporate Affairs, discusses the key changes in the recently revised UK Stewardship Code with Andrea Tweedie, Head of Stewardship.
Kate and Andrea cover the fundamental updates to the Code, including the revised definition of stewardship, its new reporting structure and restructured principles which differentiate between asset managers, asset owners, and service providers. They discuss the 2026 transition year arrangements, explaining how the transition year will work for existing signatories. Kate and Andrea also speak about the application process, touching on the support available for new and existing signatories.
Transcript
00:00:10:02 - 00:00:31:21
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 FRC. And today's topic is the recently updated Stewardship Code transition arrangements. And today I'm joined by the Head of Stewardship at the FRC, Andrea Tweedie. Welcome, Andrea.
00:00:32:02 - 00:00:34:14
Andrea Tweedie
Hi, Kate. Thanks for having me today.
00:00:34:16 - 00:01:02:16
Kate O'Neill
And I mean, it feels like probably to most listeners as well, the Stewardship Code that we've recently updated was a long consultation, a well worth the consultation given the wide range of views that we heard across our stakeholder universe, but I think it'd be great to update our listeners as to the main points of the new code and maybe what you heard consistently through the pre and formal consultation periods.
00:01:02:21 - 00:01:10:01
Kate O'Neill
I know you're particularly delighted that there was widespread and consistent support for the existence of the code itself.
00:01:10:03 - 00:01:35:04
Andrea Tweedie
Absolutely. I think that was one of the great things that came through the stakeholder engagement that we did the whole way through this review and consultation. So, as you mentioned, we did do some quite extensive engagement with our signatories and wider stakeholders before the consultation because we think we're in a really well-informed position given the number of reports we've read and seen and conversations we've had since that 2020 code was published.
00:01:35:06 - 00:02:09:20
Andrea Tweedie
But we really wanted to make sure that we understood what the views were from our signatories and other stakeholders going into the consultation as well, to really get the most out of it. And we were really, really pleased to hear just consistently the importance of the Stewardship Code in the market, how it has helped signatories to look at what they're doing in terms of their stewardship, work out where there might be any gaps, how they can really continue to meet that high standard and communicate in the best possible way with the market and their stakeholders as well.
00:02:09:22 - 00:02:39:13
Kate O'Neill
I think that's an important issue, isn't it, Andrea? Because it's not just the signatories to the code. They have stakeholders who are affected by stewardship reporting, stewardship activity, and I guess, and why wouldn't we, after five years running of the code, have seen how there is a desire to move from reporting outcomes to more activity and engagement. That really is about how fund managers and other signatories are engaging with the companies they invest in.
00:02:39:15 - 00:03:00:08
Andrea Tweedie
Yeah, absolutely. And I think that's another thing that was such a driving force for us in the consultation was, you know, really understanding the time and effort that signatories are putting into this reporting and looking to see in the updated code how can we make the most of that for everybody? So it was about reducing that reporting burden for our signatories.
00:03:00:08 - 00:03:31:16
Andrea Tweedie
Absolutely. But also looking at how could we make the reporting more engaging, more useful to a wide range of signatories? We don't want for us at the FRC to be the only ones who were reading this and that, say, we know there is so much great information and so much value in what is in them. We want to make sure that the market as a whole, whether that is companies being able to understand a little bit more about how some of the different signatories that we have in the investor ecosystem operate and how they work.
00:03:31:22 - 00:03:42:07
Andrea Tweedie
But also, for example, if you are a pension fund to be able to understand what different asset managers are doing and to be able to really engagingly see that.
00:03:42:09 - 00:03:56:09
Kate O'Neill
So if you had to take our listeners through a brief run through of the key features of the 2026 code, what would they be? I mean, we don't want to just make it sound like it's only a few things, but what are the really key drivers of the new code?
00:03:56:11 - 00:04:18:23
Andrea Tweedie
Yeah, absolutely. Well, I think I've got to start by reminding all our listeners that we have updated the definition of stewardship as the responsible allocation, management and oversight of capital to create long-term, sustainable value for clients and beneficiaries. But we've also made the bigger changes in terms of how the reporting works, looking at the structure of it.
00:04:18:23 - 00:04:45:05
Andrea Tweedie
So this is probably one of the biggest ones that signatories might be thinking about at the moment. So we've now got a policy and context disclosure as well as the activities and outcomes report. And so signatories now have the opportunity to report on those two separately. And when we're looking at policy in context, what we'd heard and what we've seen over the years is that information, it does stay a little bit more static.
00:04:45:06 - 00:04:59:14
Andrea Tweedie It doesn't change as much year on year. So they could now do that as a separate report that they don't have to update and send in to us every single year, but rather do it every four years and update it as and when they need to.
00:04:59:16 - 00:05:10:13
Kate O'Neill
And I guess, Andrea, you know what long-term means and value creation means will differ from signatory to signatory and of course their underlying stakeholders as well.
00:05:10:15 - 00:05:40:24
Andrea Tweedie
Yeah, that's exactly it, Kate. And I think what we really wanted to do was focus this, that stewardship is really on behalf of those clients and beneficiaries. And it is for investors to be able to really consider all the wide-ranging things that they need to to be invested and make those well-informed investment decisions and say, we're not, you know, going to be able to put out a definition for, you know, long-term sustainable value and be really granular about it.
00:05:41:01 - 00:05:56:12
Andrea Tweedie
That's something for our signatories to do in terms of considering how they're delivering stewardship that helps them to meet their investment objectives and be able to really confidently communicate that to their clients and beneficiaries and other stakeholders.
00:05:56:14 - 00:06:04:24
Kate O'Neill
I mean, you said there were three. What was the third one that you think would be of most interest to listeners and understanding what's changed in the code?
00:06:05:01 - 00:06:38:17
Andrea Tweedie
So we've also changed the structure of the code in that we've got principles for the asset managers and asset owners, but also for our service providers, where you apply the principles based on what you do and how you are invested. So an example there would be we've got a principle that really highlights that oversight role, where you might be investing through an external manager, as opposed to the principles where we're talking about what you're doing when you're the one who is directly investing that capital.
00:06:38:19 - 00:06:46:06
Kate O'Neill
Now, you've mentioned that's a transition year. What does that mean? I mean, does it mean really the code comes into effect in 2027?
00:06:46:08 - 00:07:16:06
Andrea Tweedie
What it means is that we've published the code in June. It is going to be in effect from January 2026. And for reporting that we see that year. But we'd heard throughout the consultation process from our signatories that they are really keen to get going on the updated Stewardship Code. But as we've just talked about, there are some quite significant changes in terms of how they're able to report and perhaps really, you know, rethinking their reporting and how do they make something that is the most engaging for their readers.
00:07:16:08 - 00:07:37:02
Andrea Tweedie
So what we've done is we've offered this transition year in 2026 for our existing signatories, which means they do need to submit a report into us at their usual time. But it's not going to be that usual pass-fail assessment for them on whether they will stay on the signatory list in 2026.
00:07:37:04 - 00:07:52:16
Kate O'Neill
And I think that's important. So this isn't a cliff edge where suddenly you're a signatory and then you're not. But what would people have to do in this transition year? Because it may be you'll be reporting in some way against the 2020 code, but in other ways against the 2026 code.
00:07:52:18 - 00:08:16:05
Andrea Tweedie
Yes, this is really that opportunity for our signatories to rethink their reporting model. If that's something that they want to do and take the opportunity to, you know, really embrace all of the flexibility that the 2026 code offers. Try something different. Really look at, you know, their readership, what they think is going to deliver the best reporting and the most engaging reporting.
00:08:16:05 - 00:08:31:07
Andrea Tweedie
I think the most important thing is to say, you definitely do need to submit a report in 2026. I think the only way you could get the transition year wrong is if you don't submit anything to us, in which case you won't be able to stay on the signatory list.
00:08:31:09 - 00:08:42:03
Kate O'Neill
So as far as feedback, I mean, the team and yourself are incredibly engaged with the signatories and the marketplace, but how are you going to give feedback?
00:08:42:05 - 00:09:12:01
Andrea Tweedie
We always want to be able to give as much feedback to signatories as possible, but we can't guarantee that it will be in a personal outcome letter in all cases. But I think we want to reassure our signatories that if there is an organisation who submits a report to us in 2026 and we have any concerns that it wouldn't be successful in a regular year of assessment, we will give them that feedback on the areas where they should be improving their reporting. We won't leave anybody in the dark where that's the case.
00:09:16:03 - 00:09:30:22
Kate O'Neill
Are you thinking about doing much in the same vein as our annual review of Corporate Governance Code reporting? Are you thinking of putting into the system an annual review, where you can go through case studies and give examples of good reporting?
00:09:30:24 - 00:09:52:12
Andrea Tweedie
Yes. So we will be doing a review of stewardship reporting that gives some of that insight into how to report well to the Stewardship Code. We'll pick out some good practice examples of reporting that we have from our existing signatories. And we're also looking at the mix of ways that we can support our signatories, not just that individual feedback letter.
00:09:52:12 - 00:10:06:04
Andrea Tweedie
So it could be more podcasts doing a deep dive on some specific aspects of reporting or even webinars or things like that, where we think it's more useful to communicate that to a wide range of our signatories.
00:10:06:06 - 00:10:18:18
Kate O'Neill
What do you say to people who say, I want to become a signatory, but I haven't ever applied? I'm not familiar with the process. So your first opportunity to do this will be 2026. Is that right, Andrea?
00:10:18:20 - 00:10:39:22
Andrea Tweedie
Yes, that is right. So we have kind of closed the existing 2020 code to new applications for that first opportunity for people to become a signatory and apply. It will be in 2026. We have our usual two windows each year. So we've got spring, and then there is also a second one later in the year for the end of October.
00:10:39:24 - 00:11:18:18
Andrea Tweedie
So any of our new applicants, they will need to meet the expectations to become a signatory in 2026. It won't just be automatic entry, but the great thing is we have also introduced guidance for Stewardship Code reporting for the first time, and that is actually on our website at the moment in draft form. But the guidance isn't mandatory, but it is there to support those who might be writing a report for the first time, who might be looking for some pointers to understand, you know, what might make the reporting better, how to report when you are different kinds of investors or different kinds of signatories.
00:11:18:20 - 00:11:36:09
Kate O'Neill
It's a very important point because we do use guidance throughout the year, I'll say, in a variety of ways, but I guess it is frustrating when it's seen as requirements rather than what it actually is intended to be, which is a toolkit to help signatories in this case feel more confident about the way in which they're making their application.
00:11:36:11 - 00:11:47:09
Andrea Tweedie
Exactly. And that is it. The guidance for the Stewardship Code. They're not rules. They're not requirements. It is there to help people understand how to report and how to report well to the code.
00:11:47:11 - 00:12:09:12
Kate O'Neill
I guess we should note that we have just published the signatories to the code who have applied, and there are some new ones which shows the strength of the code as you started out by saying that it's widely acknowledged to be the standard for stewardship and has been key in improving standards of stewardship globally. So any last words?
00:12:09:12 - 00:12:17:22
Kate O'Neill
Because it has been, you know, a big year for stewardship with the code. But also a regular year in signatories applying and reapplying.
00:12:17:24 - 00:12:43:11
Andrea Tweedie
Exactly. While we've been busy on a new Stewardship Code, it doesn't mean that everything has stood still. And we've been really, really pleased to see the continued interest, and that steady growth in the number of signatories and particularly seeing that growth in our asset owner and pension fund signatories as well. And we're just really excited for the next phase of the Stewardship Code and how it has been welcomed since we updated it in June.
00:12:43:11 - 00:12:50:05
Andrea Tweedie
So we'll look forward to keeping engaged over the next few years as we see it implemented well.
00:12:50:05 - 00:13:03:22
Kate O'Neill
Thank you Andrea. Big moment, but the start of some really interesting engagement, I guess, as people start to use the new code as the basis for their reporting. Thanks for making the time to speak today.
00:13:03:24 - 00:13:05:05
Andrea Tweedie
Thank you very much, Kate.