Research commissioned by the Financial Reporting Council (FRC) has identified the positive impact the revised UK Stewardship Code has had on the practice and reporting of asset managers and owners.

It found “strong evidence” of material changes to practice in governance, resourcing, stewardship activities, outcomes and reporting.

All organisations that participated in the research had undertaken some organisational restructuring to better integrate stewardship within their investment decision-making, which is a new requirement of the code.

Almost all (96 per cent) respondents saw increases in the size of their stewardship teams since the introduction of the revised code and reported opportunities for more formal career progression in stewardship.

More than three-quarters (77 per cent) said the quality of engagement was better due to the code’s influence.

According to asset owners, the most significant way the code influenced their approach was that they felt more empowered to monitor their investment managers.

The FRC noted that respondents were also supportive of the code’s contribution to industry-wide change.

The FRC has been responsible for the UK Stewardship Code since December 2009. It was revised in 2019 to include a wider definition of stewardship, applying to a range of asset classes and with a greater focus on stewardship activities and the outcomes of those activities.

FRC CEO, Sir Jon Thompson, commented: “We commissioned this independent research so that we could assess the impact of the revised code on stewardship practices, and it is very encouraging to see how the quality of practice and reporting have improved under its influence.

“We will learn from this research to maintain our standing as world-leaders in this area and continue to build on the code’s effectiveness.”

Former Economic Secretary to the Treasury, John Glen, added: “It’s welcome to see that the FRC’s world-leading Stewardship Code is already driving higher standards among the UK’s asset owners and asset managers.

“Enhancing and embedding stewardship across organisations and investment chains is key to ensuring that the UK’s investment management sector delivers long-term sustainable benefits for investors, the economy and the environment.”

The FRC commissioned the independent research, carried out by a team of researchers from Minerva Analytics, the Durham University Business School and the Dickson Poon School of Law, King’s College London

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