Shareholder rights are still being ignored

DEFENDING shareholder rights remains an “uphill struggle” despite almost 150 asset owners signing up to a series of guidelines for best corporate governance behaviour, a key City regulator will say today.

Almost 150 asset owners have signed up to the Stewardship Code launched by the Financial Reporting Council (FRC) last July to push institutional investors to involve themselves in the strategy and governance of the companies they invest in.

“If we are to make this code a real success we have to look for evidence as to how far it is actually changing behaviour in a positive way,” FRC chairman Baroness Sarah Hogg will say. Hogg said Europeans remained “sceptical” of the “comply-or-explain concept”, in remarks prepared for a speech to the National Association of Pension Funds in Edinburgh today.

Hogg said the FRC had been working with policy-makers including the European Commission, MEPs as well as the OECD?to explain the importance of stewardship.

The FRC is to evaluate the code’s effectiveness in its first year through a series of meetings with companies about their relationships with investors, she says.