The UK Stewardship Code 2020 highlights the importance of the stewardship concept for Boards: it drives investor behaviour and ultimately a company’s access to capital. The Code forms an essential part of the governance framework which in turn underpins Fidelio’s approach to Board Search and Evaluation. The growth of ethically informed and environmentally sustainable investing is already intensifying the dialogue between investors and companies, and it seems likely that the Covid-19 epidemic will only accelerate this trend: the recent spotlight on dividend policy is a case in point. The new UK Stewardship Code – revised and greatly expanded – is of global relevance, and internationally Chairs will need to ensure their Boards understand the major change that is underway in shareholder behaviour and are sensitive to its implications. The Stewardship Code is a critical part of the ESG agenda for all directors of listed companies, as well as for the Executive and Investor Relations. “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.”
In this Overture Fidelio examines its requirements and their likely impact. If thoughtfully implemented, we believe the Code will lead to a much higher level and quality of engagement between companies and their investors. This engagement will need to take place at Board and Executive level; and how a Board engages with the company’s shareholders will be an important measurement of its effectiveness.
Click here to continue reading for what Board Directors, Executives and IROs need to know about the UK Stewardship Code 2020.