The Code is voluntary and sets an aspirational standard beyond minimum regulatory requirements in the UK. The Code comprises 12 ‘apply and explain’ Principles for asset owners and asset managers, with reporting expectations relevant to their role. In addition, there are six, separate ‘apply and explain’ Principles for service providers with reporting expectations.

An organisation applying to become a signatory to the Code will need to provide a Stewardship Report that sets out how they have applied the Code Principles in the preceding 12 months. This must include reporting on the activities they have undertaken, and the outcomes achieved.  For the organisation to be listed as a signatory on the FRC’s website, the Report will need to meet the reporting expectations set out in the Code.

The review process considered organisations’ investment styles, sizes and types.  Two-thirds of all applications (125) have been included in the signatories list.  The FRC was pleased to see investors better integrating stewardship, and environmental, social and governance (ESG) factors into their investment decision-making, reporting on asset classes other than listed equity and identifying the outcomes of their efforts. There was also strong reporting on underpinning governance activities.

The organisations whose applications were not successful commonly did not address all the Principles or sufficiently evidence their approach and instead relied too heavily on policy statements. Other areas of weakness included reporting on the approaches to review and assurance, and monitoring service providers. The FRC would also like to see more focus on identifying areas for improvement.

To remain signatories, organisations will need to continue to improve their reporting as market practice and expectations evolve.

Further information is available on the FRC website.