Responding to the publication of a report into the effectiveness of the UK Stewardship Code by the Investment Association today (3 June 2015), the IoD have said more needs to be done to encourage investors and asset managers to promote a long-term culture in British companies.
Simon Walker, Director General at the Institute of Directors said:
“It is now over five years since the Financial Reporting Council (FRC) issued the UK Stewardship Code, yet investor engagement remains underwhelming. Fund managers talk a good game about long-termism, but signing up to a Code is a far cry from making the fundamental cultural changes which we require.
“This report by the Investment Association is very welcome and has identified some crucial areas where asset managers need to improve. It is important that the FRC now takes a wider look at how the Stewardship Code is working. With a new government in place, they have an opportunity to seize the initiative and make sure the Code is still alive to the challenges companies and investors face.
“Too many fund managers view signing up to the Stewardship Code as a box-ticking exercise, not as a means to an end. This has to change. The FRC must take a lead to ensure we are not having the same debates and arguments about long-termism in another five years’ time.”