Shareholders and Corporate Scrutiny: The Role of the UK Stewardship Code

Arsalidou Demetra
Additional contact information
Arsalidou Demetra: Lecturer, Cardiff Law School, Cardiff University, UK.

European Company and Financial Law Review, 2012, vol. 9, issue 3, 342-379

Abstract: The UK represents the most detailed initiative to date to develop a code which puts new responsibilities on the investor and investee communities. The UK Stewardship Code is an important attempt to redress the balance in the corporate governance matrix and although similar efforts have taken place in other markets, such as France and the Netherlands, the Code is the first of its type in the world. Not only of relevance to the UK, this is an important development for other countries too. The Code is said to offer a groundbreaking way forward through a background of shareholder apathy and indifference toward matters of governance. By and large, it intends to advance shareholder surveillance of companies, viewed by some as the missing control that led to the financial crisis. However, modern investment management practices make it particularly difficult for a committed, long-term ownership mindset to exist. This article raises the question of whether a more systematic and continuous relationship between institutional shareholders and management is about to evolve through the Code and discusses the market failures and structural limitations that prevent investors from becoming effective stewards. Whilst the market failures and structural impediments of the Code can cause concern, there are possible remedies that can help to provide a more favourable setting for stewardship. Consequent to this analysis, the article argues that there are more logical alternatives to company democracy and investor engagement than the generalist duties of the UK Stewardship Code.

Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/ecfr-2012-0342 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:eucflr:v:9:y:2012:i:3:p:342-379:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ecfr/html

DOI: 10.1515/ecfr-2012-0342

Access Statistics for this article

European Company and Financial Law Review is currently edited by Heribert Hirte

More articles in European Company and Financial Law Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().