Consultation On The Stewardship Code

On 20 April 2012, the Financial Reporting Council (FRC) published a consultation paper¹ proposing changes to the UK Stewardship Code (the Code).  The Code was first published in 2010 and, at the time, was subject to criticism in certain areas. The FRC have waited for the principles of the Code to be adopted and implemented before making any proposals for change.

The Code

Seven principles form the basis for the Code which are directed at institutional investors who hold shares in UK companies. The Code's principal aim is to ensure institutional investors are active and engage in corporate governance in the interests of their beneficiaries.

Changes to the Code

The FRC stated that the purpose of the proposed changes² is not to broaden the scope of or change the seven principles but to reinforce them where necessary.