"UK Stewardship Code, 2012 aims at enhancing the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibili

The UK Stewardship Code, 2012 is a part of UK company law concerning principles that institutional investors are expected to follow. The Stewardship Code aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. Engagement includes pursuing purposeful dialogue on strategy, performance and the management of risk, as well as on issues that are the immediate subject of votes at general meetings. The Code is addressed in the first instance to firms who manage assets on behalf of institutional shareholders such as pension funds, insurance companies, investment trusts and other collective investment vehicles. Stewardship aims to promote the long term success of companies in such a way that the ultimate providers of capital also prosper. The Principles of the Code are – Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities. Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship which should be publicly disclosed. Institutional investors should monitor their investee companies. Institutional investors should establish clear guidelines on when and how they will escalate their stewardship activities. Institutional investors should be willing to act collectively with other investors where appropriate. Institutional investors should have a clear policy on voting and disclosure of voting activity. Institutional investors should report periodically on their stewardship and voting activities.