Stewardship code


From the Introduction of the Financial Reporting Council’s (“FRC”) Stewardship Code (2020) (“the Code”), “Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society”.

The Code aims to enhance the quality of engagement between asset managers and companies to help improve long-term risk-adjusted returns to shareholders and promote the efficient exercise of governance responsibilities. It also describes steps asset owners can take to protect and enhance the value that accrues to the ultimate beneficiary and sets out a number of areas of good practice on engagement with investee companies to which the FRC believes institutional investors should aspire.

There are twelve Principles of the Code that apply to asset owners and asset managers. These are grouped under four headings:


Purpose and governance

  1. Purpose, strategy and culture
  2. Governance, resources and incentives
  3. Conflicts of interest
  4. Promoting well-functioning markets
  5. Review and assurance


Investment approach

  1. Client and beneficiary needs
  2. Stewardship, investment and ESG integration
  3. Monitoring managers and service providers



  1. Engagement
  2. Collaboration
  3. Escalation


Exercising rights and responsibilities

  1. Exercising rights and responsibilities


The FRC encourages signatories to the Code to review their policy statements annually and update them as necessary to reflect changes in actual practice.