The Stewardship Code aims to increase the engagement of institutional investors in the companies they own, but this may not be what they want
The Stewardship Code, while not expanding significantly on the existing Institutional Shareholders Committee guidelines, is heralded as being a real step towards promoting active engagement between institutional investors and the companies in which they invest – improving corporate governance.
There is a strong expectation that institutional investors will voluntarily comply with the code. It will acquire more teeth if authorised asset mangers are required to report on compliance (or explain why not), which is a move that seems likely to happen regardless of the government’s plans to reorganise the FSA.
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