09:00 - 10:45

Aled Jones (United Kingdom)
Investment Manager - ESG - London Pensions Fund Authority

Frank Curtiss (United Kingdom)
Head of Corporate Governance - Railpen Investments

UK and International Dimensions to the UK Stewardship Code

This presentation is addressed to investors and asset managers in particular.

The presentation will draw attention to how the UK Stewardship Code may soon become a regulatory requirement for UK-authorised firms to state publicly how they apply the Code on a comply or explain basis if the FSA decides to go ahead with its proposals to change its Conduct of Business Rules.
It will mention the separate but related initative on the part of the FRC as the owner of the Code, to encourage the voluntary upfront endorsement of institutional investors including those who would not be caught by the FSA's proposed rule changes eg pension funds, overseas asset managers and other foreign investors. As the FRC rightly says, the Code is unlikely to succeed if investors do not take it seriously and in the presenter's view that includes asset owners and pension funds.
The presentation will explain what Railpen has been doing on promoting the Code both internally and beyond. Railpen have now put up their own public statement on their website and have also led an initiative to raise awareness through a joint public letter from 11 UK pension funds to the FRC to indicate full support for the Code (which has attracted significant media attention). The presenter also encouraged overseas investors to do likewise and is pleased to see that the Australian Council of SuperInvestors has sent its own letter to the FRC. The presenter also encouraged Japanese investor trade bodies and US public pension funds to look at the Code.
Although the Code was drafted with the UK in mind, it is expected to apply in other markets in the same spirit. The UK is the first and consequently influential like the original Cadbury Code on Corporate Governance in 1992 and likely to spread.
Some markets are already working on their own codes eg South Africa - and the presenter is able to say a bit about what they are doing - but like many cross-border investors would hope that as codes proliferate there is some sort of mutual recognition between them or the situation will be hard to manage with different requirements across multiple jurisdictions which would be better than a one-size-fits-all approach.
The UK Stewardship Code is very much intended to operate on a comply or explain basis. This works well in the UK and other jurisdictions like Australia, but less well in rules-based and legalistic markets such as the USA and some European markets.
The challenge is to show that it can work with the right mix of outright regulation and voluntary compliance whilst taking account of different approaches.

Paul Lee (United Kingdom)
Director - Hermes Equity Ownership Services

Global perspectives on Stewardship Codes

The UK's Stewardship Code has sparked a great deal of interest within the country. Fund managers and asset owners have moved to be ready for its disclosure requirements, and are now considering how they deliver their substantive obligations under the Code. But it has also gained attention internationally. South Africa has already produced its own version of such a Code, and moves are afoot in various other jurisdictions to follow suit - not least in the EU, whose green paper cited favourably the Statement of Principles on Institutional Shareholder Responsibilities produced by the ICGN's Shareholder Responsibilities Committee. As chair of this committee, the presenter is well-placed to discuss what best practice will look like and how the investment community can best deliver on its emerging responsibilities.

Kris Douma (The Netherlands)
Head of Responsible Investment & Active Ownership - Mn Services

How Sustainable Is a National Stewardship Code?

Active ownership is one of the key principles of the UN PRI and at the same time it is a reason of concern. Why? Active ownership can be understood as a form of short term activism, including violent take overs etc. Following the financial crisis, it can also be understood as a safeguard against 'foreign' take-overs (e.g. Cadbury in the UK) and irresponsible risk-taking by companies and banks. And it can also be understood as commitment to the long term success of a company, including its management of sustainability issues. The debate about investor codes bears the traces of the different expectations of active ownership. The European Commission seems to promote investor or stewardship codes, and the UK has taken the lead. But whose needs does the FRC-code meet? Can it serve as an example for other national codes? What developments are taking place in other countries, like the Netherlands? Is an international code preferable?