Q.What is the Stewardship Code?
A.The Stewardship Code, the first of its kind for the Financial Reporting Council (FRC), seeks to create greater transparency around the way investors oversee the companies they own by encouraging better dialogue between shareholders and company boards.
Q.what does the frc hope to achieve?
A.The FRC hopes that the new Stewardship Code will create a stronger link between the governance and investment process and said that it expects the code to evolve over time as the industry learns from the experience.
Q.How will investors have to comply?
A.The FRC said that all institutional investors should publicly report on the extent to which they comply with the code. They may have to update corporate governance measures, which will usually appear in the company’s accounts.
Q.What will investors have to do?
A.Institutional investors will have to proactively monitor the companies they have invested in and escalate activities taken to protect and enhance shareholder value. Under the code, investors will also have to report periodically on their voting activities and stewardship.
Q.will investors have to update company policies?
A.The FRC said that investors should have a robust policy on managing conflicts of interest in relation to stewardship and will have to demonstrate clear voting policies and voting disclosure. Investors will have to be willing to act collectively with other investors where appropriate.
Q.When does the code come into effect?
A.The Stewardship Code comes into effect immediately. The FRC will publish a list of compliant investors on its website.