The Financial Reporting Council (FRC) has launched a consultation on updates to the UK Stewardship Code, with the aim of supporting economic growth, enhancing transparency for UK investors, and streamlining reporting requirements.
The consultation proposes a revised stewardship definition focused on long-term value, a streamlined reporting process, targeted principles for different signatories (including proxy advisers), and new guidance to aid the implementation of updated reporting arrangements.
The consultation, which is scheduled to end on February 19, 2025, comes after four years of analysing reporting against the 2020 Code and involves engagement with more than 1,500 stakeholders in 2024.
It expands upon interim measures approved by signatories in July 2024 that sought to clarify stewardship outcomes and reduce annual reporting requirements.
Stakeholder input will be gathered through engagement events hosted by the FRC during the consultation; the amended Code is anticipated in 2025, and its first reporting cycle will take place in 2026.
FRC CEO Richard Moriarty says: “The UK Stewardship Code plays a vital role in promoting long-term value for millions of people who trust their hard-earned savings and pensions to the investment community in order to provide for their future.
“This consultation marks an important evolution of the Code, ensuring it maintains high standards of stewardship in a manner that continues to support UK growth and is more proportionate. In doing so, we aim to help enhance the attractiveness of the UK as a leading global destination for capital and its management.
“We are committed to maintaining the UK’s position as a global leader in stewardship standards and activities. Our proposals reflect extensive stakeholder engagement the FRC has undertaken during 2024 and aim to reduce unnecessary reporting burden while ensuring savers and pensioners can better understand how their money is being managed on their behalf to create long-term sustainable value.”
