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Stewardship survey

About the report

The Investment Association and PLSA report on ‘Stewardship in Practice’ looks at how asset managers, asset owners and service providers discharge their stewardship responsibilities with respect to UK companies. It covers the position as at/year to 30 September 2016.

In the past the IA issued a report on stewardship that looked at the policy statements and activities of signatories to the FRC’s Stewardship Code and the PLSA issued a separate report which looked at how its wider members viewed stewardship.

This year the two exercises have been co-ordinated and one report produced to provide a holistic view on stewardship by asset owners and asset managers. This report also focuses more on what happens in practice rather than policy. It summarises the responses to two questionnaires – one for asset managers and service providers, and another for asset owners – that were aligned. The questionnaires were sent both to the signatories to the Stewardship Code and to the members of the IA and PLSA in order to determine the extent to which asset managers and asset owners undertake stewardship regardless of whether they are signatories. Only those service providers that are signatories to the Stewardship Code were sent a questionnaire.

Main findings
  • Almost two thirds of respondents reported that engagement with UK companies resulted in somewhat or considerably better investment decisions
  • On average, respondents’ engagement was excellent for nearly a quarter and good for 44% of UK companies
  • 27% of respondents noted an improvement in terms of the quality of engagement compared with the previous year
  • 77% of respondents believed that engagement enhances value
  • The head count responsible for stewardship amounted to 1,543. 82% per cent of this was represented by portfolio managers and analysts indicating that stewardship is integrated into the investment process.
  • Whilst a substantial core of asset owners integrate stewardship into their investment practices and 68% now include a stewardship policy in their Statement of Investment Principles, more work is needed to bring the whole sector up to this standard.
  • Respondents engage on a wide range of issues, however engagement on executive remuneration, whilst important in that shareholder/societal expectations have not necessarily been met, can crowd out engagement on the real drivers of long term value
  • Collective engagement is viewed to be an essential mechanism for attaining critical mass and allowing smaller investors access to companies. However, its effectiveness can be compromised where no consensus is reached on the course of action.

Download the report

The report can be found here.

  • Press Release on publication of the Stewardship Report - 21 September 2017.