The Stewardship Code’s Achilles’ Heel

43 Pages Posted: 18 May 2011

See all articles by Brian R. Cheffins

Brian R. Cheffins

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

Date Written: July 2, 2010


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.

Keywords: Stewardship Code, corporate governance, shareholder activism, share ownership, financial crisis

JEL Classification: G3, G30

Suggested Citation

Cheffins, Brian R., The Stewardship Code’s Achilles’ Heel (July 2, 2010). University of Cambridge Faculty of Law Research Paper No. 28/2011. Available at SSRN: or

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)

B-1050 Brussels

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