Aberdeen, Aegon and M&G are amongst 48 asset managers that have signed up to a new stewardship code aiming to improve engagement between investors and company boards.
Launched in July this year, the Financial Reporting Council Stewardship Code is designed as the basis for investors to improve the quality of corporate governance and long-term company performance.
In total, 68 organisations have published statements supporting the code, including pension funds and almost 50 asset managers, including JP Morgan, Baille Gifford, Jupiter, Schroders, the Co-operative, Threadneedle, Legal & General and Henderson.
Commenting on the code, business secretary, Vince Cable, said: “Increasing effective shareholder engagement is central to rebuilding trust in the corporate sector and will encourage long-term planning for growth.”
Chairman of the FRC Baroness Hogg said: “Effective dialogue between company boards and shareholders is an essential part of good governance, promoting constructive challenge and a focus on long term value creation.
“The code has attracted high calibre support from institutional investors. This shows that the principle of stewardship, and our method of delivery through the market, resonates broadly outside the UK.”
Baronness Hogg said the success of the code would depend on how effectively investors deliver on their commitment to adopt it and the FRC would be monitoring how firms implemented their commitments in practice.
The stewardship code sets out a series of principles for institutional investors to follow.
These include establishing clear guidelines on when and how activities will be escalated to protect and enhance shareholder value; having a clear policy on voting and disclosure activity; and reporting periodically on stewardship and voting activities.
© Fair Investment Company Ltd