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UK Stewardship Code - Coggle Diagram
UK Stewardship Code
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The new Code took effect on 1 January 2020, building on the success of the previous Code but setting a substantially higher standard, reflecting the changing expectations of investors and significant developments in sustainable and responsible investment and stewardship
The investment market has changed significantly since the publication of the first UK Stewardship Code. There has been significant growth in investment in assets other than listed equity, such as fixed income bonds, real estate and infrastructure
Environmental (particuarly climate change) and social factors, in addition to governance, have become material issues for investors to consider when making investment decisions and undertaking stewardship
The Code also recognises that asset owners and asset managers play an important role as guardians of market integrity and in working to minimise systemic risks as well as being stewards of the investments in their portfolios
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The UK Stewardship Code aims to enhance the quality of engagement between investors and companies to hep improve long term risk adjusted returns to the providers of capital for companies
The Code is intended for asset owners, asset managers and service providers such as investment consultants and proxy voting advisers
Asset owners and asset managers cannot delegate their stewardship responsibility and are accountable for effective stewardship. Activities service providers undertake to support their clients' stewardship may include, engagement, voting recommendations and execution, data and research provision and advice
The Code is voluntary, since 2010 FCA authorised asset managers have been required to disclose whether and if so how, they comply with it
The CS should monitor the websites of asset owners and asset managers who have or manage investments in the company to assess whether there is anything in the context of their Stewardship Report that can assist in the company's dialogue with them. Te outcome of this assessment should be shared with the board
In addition to stewardship reports, many asset managers publish separate voting policies which set out in detail what factors they take into account when deciding how to vote on shareholder resolutions