Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, what steps her Department is taking to strengthen the UK Stewardship Code 2020.

The Financial Reporting Council (FRC) sets the UK Stewardship Code and revised it in 2020 to promote better reporting on stewardship outcomes. Research in 2022 found strong evidence of positive changes in stewardship practice under the revised Code. Signatories to the Code have to submit a new report each year to maintain their signatory status.

The FRC’s terms and conditions for the Stewardship Code outline the circumstances in which the FRC may remove an organisation from the list of signatories, including provision of information which is later discovered to be false or inaccurate, or investigation by a regulatory body.

From this autumn, the FRC plans to work with the Financial Conduct Authority, the Department for Work and Pensions and the Pensions Regulator to review the regulatory framework for stewardship, including the operation of the Stewardship Code. The review will assess how far the Code is creating a market for effective stewardship and the need for any further regulation in this area.