An Analysis of the Impact of UK Stewardship Code on UK Asset Managers: Financial Performance and Quality of Engagement
The aim of this thesis is to investigate the application of the UK Financial Reporting Council’s Stewardship Code and evaluate the outcomes reported by signatories, thus providing evidence to determine whether the Code has been successful in delivering its proposed aims. The UK Stewardship Code (2012) was published to enhance the quality of engagement between investors and companies. The FRC proposed that effective stewardship would benefit companies, investors and the economy as a whole. A mixed methods approach has been adopted, initially collecting quantitative data to explore the statistical relationship between stewardship activities (e.g. exercising voting rights, monitoring the investee corporates) and the financial performance of asset managers. Interviews with UK asset managers explored the non-financial benefits observed from applying the Code. The quantitative and qualitative results provide a thorough understanding of the application of the Code, illustrating that the implementation of the Code has not influenced the financial performance of asset managers significantly. Furthermore, applying the Code has not enhanced the quality of engagement between signatories of the Code and their investee corporates. Overall, this study concludes that while the Stewardship Code has been successful in some areas, it has not achieved the aims initially set out.
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