The Stewardship Code's Achilles' Heel

22 Pages Posted: 25 Oct 2010

See all articles by Brian R. Cheffins

Brian R. Cheffins

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Abstract

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 summarises 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.

Suggested Citation

Cheffins, Brian R., The Stewardship Code's Achilles' Heel. The Modern Law Review, Vol. 73, Issue 6, pp. 1004-1025, November 2010. Available at SSRN: https://ssrn.com/abstract=1696695 or http://dx.doi.org/10.1111/j.1468-2230.2010.00828.x

Brian R. Cheffins (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom
+44 1223 330084 (Phone)
+44 1223 330055 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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