Stewardship is an important concept in corporate governance, which can apply to a range of corporate participants, including the state, directors and shareholders. In recent times, however, the focus in this area has been on shareholder stewardship, specifically on the rise of Shareholder Stewardship Codes.

Shareholder Stewardship Codes reflect the growing influence of institutional investors. The codes, which first appeared in the aftermath of the 2007-2009 global financial crisis, represented a response to concern that institutional investors had been too passive in providing oversight during the crisis. These codes encouraged shareholders to exercise their legal rights and increase their level of engagement in corporate governance as a constraint on managerial power and excessive risk-taking.

The United Kingdom became the first jurisdiction to adopt a Stewardship Code in 2010, following a recommendation of the Review of Corporate Governance in UK Banks and Other Financial Entities (the Walker Review). on corporate governance in financial institutions.  A revised version of the code, which operates on a voluntary basis, was released in 2012. It has been said that the UK Stewardship Code’s underlying premise is that institutional investors have a non-delegable duty to engage with companies in which they invest. The Code promoted enhanced shareholder engagement in corporate governance on the basis that it would benefit companies, investors and the economy as a whole. In January 2019, the UK Financial Reporting Council (FRC) released proposed revisions to the Stewardship Code, which, according to the FRC, were designed “to set new and substantially higher expectations for stewardship”.

Stewardship Codes have become increasingly popular internationally. Japan adopted its own version in 2014, and more than twenty jurisdictions, many of which are in Asia, have now followed suit.

Although the Stewardship Code phenomenon might at first sight suggest corporate governance convergence, there are many differences in Stewardship Codes around the world, which can influence their effectiveness. For example, whereas some are issued by regulators or quasi-regulators on behalf of the government, others have been issued by market participants or investors themselves. In the United States, for example, an investor-led Stewardship Code was introduced in 2017, with the release by the Investor Stewardship Group (“ISG”) of its Framework for US Stewardship and Governance. Although the ISG framework is voluntary, it has the backing of some of the world’s largest asset managers, including founding members, such as BlackRock, State Street Global Advisors and Vanguard.

A common theme in contemporary international Stewardship Codes, regardless of their issuing body, is the need for long-term, sustainable investment horizons. Also, Stewardship Codes increasingly promote ESG issues.

In the relatively short time they have been on the corporate governance radar, Stewardship Codes have provoked a considerable amount of controversy. Some commentators have suggested that shareholder stewardship is unlikely to be effective, because investors often lack appropriate incentives to become engaged in corporation governance and traditional free-riding issues will continue to apply in this context. For example, it has been argued that institutional investors, particularly index funds, direct very limited resources to oversight of their portfolio companies. It has also been suggested that the voluntary, “comply or explain” nature of Stewardship Codes will necessarily undermine their effectiveness. Finally, some critics of the stewardship movement argue that the whole concept of shareholder stewardship is dangerous and antithetical to contemporary regulatory developments, which focus on an enhanced social purpose for corporations.

This page is intended as a resource for issues pertaining to stewardship and corporate governance as examined through the disciplines of economics, business strategy, law and other areas.

Queries, suggested inclusions, and project funding proposals should be directed to Prof. Jennifer Hill (




Academic Papers:

Policy papers, reports, viewpoints and speeches:

Blog posts: 





Prof. Jennifer Hill

Picking Friends Before Picking (Proxy) Fights: How Mutual Fund Voting Shapes Proxy Contests

This paper studies mutual fund voting in proxy contests using a comprehensive sample of voting records over the period 2008 - 2015, taking into account selective targeting by activists. We find that firm, fund, and event characteristics generate...Read more

Alon Brav
Wei Jiang
James Pinnington
13 March 2019

The Costs and Benefits of Shareholder Democracy: Gadflies and Low-Cost Activism

We show that there is cross-sectional variation in the quality of shareholder proposals. On average, the proposals submitted by the most active individual sponsors are less likely to be supported by a majority of votes, but they may pass if...Read more

Nickolay Gantchev
Mariassunta Giannetti
20 December 2018

Incentive Fees and Competition in Pension Funds: Evidence from a Regulatory Experiment

Concerned with excessive risk taking, regulators worldwide generally prohibit private
pension funds from charging performance-based fees. Instead, the premise underlying the regulation of private pension schemes (and other retail-oriented...Read more

Assaf Hamdani
Eugene Kandel
Yishay Yafeh
01 February 2016

Pension Reform, Ownership Structure, and Corporate Governance: Evidence from a Natural Experiment

Sweden offers a unique natural experiment to analyze the microeconomic effects of institutionalized saving on ownership structure, corporate governance and performance of listed companies. First, the Swedish pension reform increased the...Read more

Mariassunta Giannetti
Luc Laeven
01 June 2007

Institutional Investors and Proxy Voting: The Impact of the 2003 Mutual Fund Voting Disclosure Regulation

This paper examines the impact on shareholder voting of the mutual fund voting disclosure regulation adopted by the SEC in 2003, using a paired sample of proposals submitted before and after the rule change. We focus on how voting outcomes relate...Read more

Martijn Cremers
Roberta Romano
01 April 2007

Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes U.K. Focus Fund

This article reports a unique analysis of private engagements by an activist fund. It is based on data made available to us by Hermes, the fund manager owned by the British Telecom Pension Scheme, on engagements with management in companies...Read more

Marco Becht
Julian Franks
Colin Mayer
Stefano Rossi
01 December 2006

Hedge Funds, Insiders, and the Decoupling of Economic and Voting Ownership: Empty Voting and Hidden (Morphable) Ownership

Most U.S. public companies have a single class of voting common shares: voting power is proportional to economic ownership. Linking votes to shares is often thought to be desirable, because, as residual claimants, shareholders have an incentive...Read more

Bernard Black
01 March 2006