The FRC has unveiled significant revisions to the UK Stewardship Code to reduce reporting burdens, enhance transparency, and align with stakeholder feedback, aiming to improve stewardship outcomes and support UK capital markets.
In its latest update, the Financial Reporting Council (FRC) announced major revisions to the UK Stewardship Code application process and identified priority areas for review.
Immediate changes include reducing annual reporting requirements, allowing reuse of previous content, and clarifying outcome expectations.
Moving forward, the FRC has committed to focussing on further reappraisals under five primary themes:
- Purpose - the FRC will consider stakeholder views to define effective stewardship and how the Code’s reporting can achieve
- Principles - the FRC will determine the reporting needed to align with the Code’s renewed purpose.
- Proxy Advisors – The FRC will explore how the Code can enhance transparency in their activities.
- Process – The FRC will take forward proposals to reduce reporting burdens for Code signatories and ensure reports are useful and accessible for investors and stakeholders.
- Positioning – The FRC will collaborate with regulators like the DWP, TPR and FCA to support clear and effective implementation of the revised Code.
These revisions aim to make the Code more effective and accessible. The hope is that this will not only provide clarity on areas signatories outlined as challenging to address, but also bolster the UK’s attractiveness as an investment destination and ensure better stewardship understanding among pension holders and savers.
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