In 2011, a group of six institutional investors came together to clarify what was meant by better ‘investor stewardship’ and to find ways to help investors and companies put this into practice in order to further the aims of the Stewardship Code. The working party, consisting of Aviva Investors, BlackRock, Governance for Owners, RPMI Railpen Investments, Ram Trust (now Spinnaker Trust), and USS (now USS Investment Management), and supported by Tomorrow’s Company, published its report – 2020 Stewardship improving the quality of investor stewardship – in March 2012.
In July 2012 the Kay Review of UK Equity Markets and Long-Term Decision Making was published. Also in 2012 the UK’s Financial Reporting Council published a revised Stewardship Code, effective on 1 October, both of which reinforced the importance of improving stewardship.
Before preparing its report, the Working Party held dialogues with a number of company chairmen and other corporate representatives and made a number of recommendations. It subsequently asked the Institute of Chartered Secretaries and Administrators to establish a steering group to take forward the first two recommendations, namely:
to create a simple guide to good engagement practice, jointly developed by companies and institutional investors, with the particular aim of encouraging more productive meetings to help companies and institutional investors find more ways to seek feedback on the quality of meetings and, over time, use this feedback to identify good stewardship and make improvements to practices.
The Steering Group was established in July 2012 under the leadership of Sir John Egan, with a membership representing a range of industry experts, companies, investors and other key stakeholders.