The Stewardship Code’s Achilles’ Heel
Brian R. Cheffins
University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)
July 2, 2010
University of Cambridge Faculty of Law Research Paper No. 28/2011
Many concerned about UK corporate governance have urged those who own equity in listed companies to forsake a traditional bias in favour of passivity and act as responsible, engaged ‘owners’. The recent financial crisis has given added impetus to such calls, with the notion of ‘stewardship’ taking centre stage and resulting in July 2010 with the launch of a Stewardship Code targeting UK-based institutional investors. This paper summarizes the Stewardship Code initiative and argues that, primarily due to sustained fragmentation of share ownership occurring over the past 20 years, the Code is unlikely to foster substantially greater shareholder involvement in UK corporate governance.
Number of Pages in PDF File: 43
Keywords: Stewardship Code, corporate governance, shareholder activism, share ownership, financial crisis
JEL Classification: G3, G30
Date posted: May 18, 2011
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