The report includes multiple examples of good practice and identifies areas where the FRC expects to see improvements next year.  The FRC has seen good reporting on governance, resourcing, and the integration of stewardship and ESG factors into investment decision-making. However, it highlights that there is room for improvement in explaining how stewardship-related conflicts of interest are managed, how managers review and assure their stewardship activities and how they monitor and hold to account service providers operating on their behalf.

The report outlines key areas of focus for applicants to report on in the future, including:

• reflections on the effectiveness of investor actions relating to how market-wide and systemic risks are being managed;
• stewardship in asset classes other than listed equity; and
• echoing the FRC’s recent review of corporate governance reporting, calling for a focus by reporters on outcomes for each Principle of the Code and including relevant evidence to back this up, for example case studies that can illustrate both process and impact.

Early in 2022 the FRC will publish a research report that looks at how stewardship governance, resourcing and engagement has evolved and the influence of the new Code.

A press release and the report is are available on the FRC website.