Slightly obscured by the spin over the Government’s plans on executive pay, a new investor group is launched today that aims to improve the quality of company stewardship in the UK. Coordinated by lobby group Tomorrow’s Company, this “Stewardship Working Party” comprises some of the leading UK institutional investors, including Aviva Investors, Blackrock and the USS.
The working party will focus on improving engagement between companies and investors, with particular reference to the Financial Reporting Council’s Stewardship Code. From the press release launching the working party:
“Leading firms in the institutional investor community have joined forces with Tomorrow’s Company to launch a working party which aims to improve the quality of engagement by institutional investors with UK companies. The practitioner-led group aims to identify engagement styles and practices that seem to be most effective and to share that intelligence with the aim of making engagement more rewarding for investors and companies alike. The group also intends to make a significant contribution to the 2012 revision of the Stewardship Code which the Financial Reporting Council is proposing will take effect from 1st October 2012. The group includes some of the world’s largest and most active investors – Aviva Investors, BlackRock, Governance for Owners, Railpen Investments, Ram Trust and USS.
A key part of the project will be interviews with board members of leading UK companies to provide companies’ feedback on stewardship and their criteria for good stewardship. The project team will be examining how companies judge the quality of stewardship, sources of frustration for companies and what they would like to see change.”
The FRC’s Stewardship Code was published in July 2010 and “aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities”.
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