The revised UK Stewardship Code has had a positive impact on practices and reporting of asset managers and owners according to new research commissioned by the Financial Reporting Council (FRC).  

The research found strong evidence of material changes to practice in the areas of governance, resourcing, stewardship activities, outcomes and reporting.  

Evidence was taken from 55 asset managers and owners. It found that both groups are very positive about the impact of the Code.  

All organisations had done some organisational restructuring, as per a new requirement of the code, to better integrate stewardship in their investment decision-making. Increases in the size of their stewardship teams and opportunities for more formal career progression in stewardship was reported by 96% of respondents. The Code’s influence was also reported by 77% of respondents to have made the quality of engagement better. 

Asset owners reported that the most significant influence of the Code on their approach is that they now feel more empowered to monitor their investment managers.  

The Code’s contribution to industry-wide change and focus on long-term goals for the investment community was also celebrated.  

The FRC has been responsible for the UK Stewardship Code since December 2009 and was revised substantially in 2019. This included a wider definition of stewardship, applied to a range of asset classes and more focus on stewardship activities and the outcomes of these.  

The FRC commissioned independent research, by a team of researchers from Minerva analytics, the Durham University Business School and the Dickson Poon School of Law, King’s College London. This was to better understand current practices and the impact the revised code has had.  

FRC CEO Sir John Thompson said: “We commissioned this independent research so that we could assess the impact of the revised Code on stewardship practices, and it is very encouraging to see how the quality of practice and reporting have improved under its influence. 

“We will learn from this research to maintain our standing as world-leaders in this area and continue to build on the Code’s effectiveness.”