Hywel Ball is Managing Partner for Assurance, UK and Ireland; Loree Gourley is Director of Regulatory and Public Policy; and Brandon Perlberg is Associate Director of Regulatory and Public Policy, all at EY UK. This post is based on an EY UK memorandum by Mr. Ball, Ms. Gourley, Mr. Perlberg, Christabel Cowling, and Peter Flynn. Related research from the Program on Corporate Governance includes The Agency Problems of Institutional Investors by Lucian Bebchuk, Alma Cohen, and Scott Hirst (discussed on the Forum here), and Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy by Lucian Bebchuk and Scott Hirst (discussed on the forum here).
Vital to rebuilding trust in business is an effective accountability framework based on good stewardship, governance and reporting. Within this, transparency over stewardship of investments plays a fundamental role in providing confidence to a broad range of stakeholders. Pursuing greater transparency drives greater accountability, and promotes a critical shift from short-term thinking to creating long-term value.
What is this review about?
This is first-of-its kind research designed to enable a better understanding of how UK-based asset managers and asset owners are currently reporting on and engaging with their investee companies on stewardship. We analysed recent stewardship reporting by the 30 largest UK investors who are signatories to the UK Stewardship Code (20 asset managers and 10 asset owners). We then assigned scores based on the depth of their reported stewardship activity across different areas of investor priority. The findings provide a comprehensive picture of investor priorities and expectations, and offer unique insights about the journey toward more transparent reporting that promotes the safe investment of capital for the long-term.