What is the Stewardship Code?
The Financial Reporting Council (FRC) is introducing the Stewardship Code to advance engagement between companies and institutional investors in order to improve long-term shareholder returns and the efficient application of governance responsibilities. It encourages investors to publish information on their websites explaining how they meet the Code’s responsibilities on a "comply or explain" basis.
www.frc.org.uk/corporate/investorgovernance.cfmThe FRC sees the UK Stewardship Code as complementary to the UK Corporate Governance Code for listed companies and, like that Code, it should be applied on a “comply or explain” basis. The code is part of a wider corporate governance shake-up following the financial crisis, which saw institutional shareholders branded "absentee landlords" for failing to engage sufficiently with the banks heading for collapse
The Code covers seven main principles for institutional investors including, public disclosure of their responsibilities; a clear policy on voting and disclosure of voting activity; and guidelines to protect shareholder value.
TCAM has long believed in being transparent with investors and takes a responsible investment approach across all its investments. For example:
- In 2002, it became the first shareholder to make its voting records available to the public;
- It voted against Northern Rock remuneration reports two years running prior to the credit crunch;
- It refused to support RBS executive remuneration continuously since 2002 up to the financial crisis; and
- It was one of few institutional investors to vote against the ill-fated RBS/ABN-AMRO deal.
- It was the lead investor at two shareholder resolutions in 2010 at BP and Royal Dutch Shell asking how they will manage the environmental, social, economic and political risk surrounding their activities in oil sands.
TCAM uses a distinctive responsible investment approach that integrates environmental, social and governance (ESG) analysis alongside financial considerations when selecting companies for investment. It believes the approach enables more informed investment decision-making.
For further information on The Co-operative Asset Management and the
Stewardship Code contact Abigail Herron Corporate Governance Manager at: abigail.herron@cfs.coop
