FRC consults on revisions to the Stewardship Code
08 March 2019
The Financial Reporting Council (FRC) is consulting on a revised Stewardship Code. The new Stewardship Code will set greater expectations for effective investor stewardship, improving its value to stakeholders and the wider society. It is being introduced to reflect the changes in the investor landscape and requirements for stewardship since the last revision in 2012.
The draft Stewardship Code has been developed to reflect feedback that the FRC received when it posed a series of questions on the Code as part of its consultation on the revised UK Corporate Governance Code in 2017. Its aim is to encourage more rigorous reporting and increase FRC oversight over the Stewardship Code’s effectiveness in enhancing the quality of stewardship.
The main proposed changes include:
- Aligning with the UK Corporate Governance Code and requiring investors to report on how they meet their obligations to beneficiaries. They will report on how their purpose, values and culture aid the fulfillment of these obligations.
- Requiring those adopting the Stewardship Code to report on environmental, social and governance factors (ESG) and how ESG factors are considered when satisfying stewardship responsibilities.
- Broadening the Stewardship Code’s scope to include stewardship over investments in assets other than listed equity.
Read the FRC’s consultation paper – the deadline for comments is 29 March 2019.
For help and advice on the Corporate Governance Code, please get in touch with your usual BDO contact or Matthew White.
Business Edge Index