Australian Investor Stewardship and Global Themes in Stewardship Regulation

Abstract

The UK Stewardship Code 2020 was published late last year. It provides an opportunity to identify global themes in the evolution of investor stewardship and to assess whether the Australian stewardship codes have kept up with these emerging themes. This article identifies seven emerging themes and reaches the conclusion that the bifurcated Australian system of investor stewardship codes is outdated even before they have been fully implemented. It recommends that a unified code be introduced that incorporates these emerging themes. The article further recommends that oversight of the disclosures of the stewardship codes be moved to a regulator, possibly the Financial Reporting Council, to remove possible conflicts that industry oversight present. This does not, however, mean that a move to hard law is recommended, but rather that a move to a regulator would encourage greater consistency in disclosures and facilitate a progression to “apply and explain”.