The Market for Stewardship and the Role of the Government

27 Pages Posted: 30 Jun 2021

See all articles by Dionysia Katelouzou

Dionysia Katelouzou

King's College London - The Dickson Poon School of Law; Transnational Law Institute

Eva Micheler

London School of Economics - Law School

Multiple version iconThere are 2 versions of this paper

Date Written: June 23, 2021


In this contribution, we focus on the market for stewardship, as it has been developing in the UK. We observe that the 2020 UK Stewardship Code more clearly than previous stewardship codes (both in the UK and elsewhere) articulates the concept of a market for stewardship. The UK Code 2020 takes into account the position of end-investors and beneficiaries. The hope is that stewardship will be delivered because those whose money is invested ask for it. We agree that stewardship does start with those who contribute the funds invested in the market. The focus on end-investors and beneficiaries is, however, not enough. As this paper explains, by limiting the analysis to these groups, the UK government overlooks the fact that it is itself a financial contributor to the market. A study commissioned by the Competition and Markets Authority (CMA) finds, for example, that 90% of the revenue of investment consultants and fiduciary managers derives from pensions. The government contributes to pension investments through the provision of tax credit. It is a significant financial investor in the market. Tax credit also deprives end-investors and beneficiaries of a financial incentive to oversee asset owners, asset managers and other service providers. We, therefore, suggest that the UK government should act as a steward in relation to its own investment and tailor tax credit to investments that are stewardship-active.

Keywords: stewardship, United Kingdom, government, tax credit, pensions, corporate governance, institutional investors, sustainability

Suggested Citation

Katelouzou, Dionysia and Micheler, Eva, The Market for Stewardship and the Role of the Government (June 23, 2021). LSE Legal Studies Working Paper No. 10/2021, Available at SSRN: or

Dionysia Katelouzou (Contact Author)

King's College London - The Dickson Poon School of Law ( email )

Somerset House East Wing
London, London WC2R 2LS
United Kingdom

Transnational Law Institute ( email )

London, England WC2R 2LS
United Kingdom

Eva Micheler

London School of Economics - Law School ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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