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Daily Insurance Industry News
Friday 19th of October 2018
July 3, 2010

FRC publishes Stewardship Code for institutional investors

by Gill Montia

Story link: FRC publishes Stewardship Code for institutional investors

The Financial Reporting Council (FRC), which oversees issues of corporate governance, has published a Stewardship Code for institutional investors, following on from its recent publication of an updated corporate governance code.

The new code includes principles on the monitoring of investee companies; the escalation of activities taken to protect or enhance shareholder value; collective engagement; voting policy; managing conflicts of interest, public reporting and reporting to clients.

Its purpose is to improve the quality of corporate governance by promoting a better dialogue between shareholders and company boards, and more transparency in the way in which investors oversee the companies they own.

FRC chairman, Baroness Hogg, comments: “Disclosures made by institutions under the code should assist companies to understand the approach and expectations of their major shareholders.”

The Baroness adds: “Pension funds and other owners may not wish to become directly involved in engagement but they can make a significant contribution by, for example, mandating their fund managers to do so on their behalf.”

In its examination of the causes of the credit crisis last year, The Treasury Select Committee called institutional shareholders to account for not having done enough to challenge banks’ boards in the run-up to the crisis.

 

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