The Unseen 'Others': A Framework for Investor Stewardship

Institutional investors, acting as stewards, (1) exercise power and influence (2) on behalf of their clients and/or beneficiaries, and in doing so, (3) regard a broader spectrum of 'unseen' others, including end investors, investable assets, and the broader economy, environment, and society. This analytical framework reveals a crucial and often overlooked distinction in investment management: the 'others' on whose behalf investor stewards act (clients/beneficiaries) may not always align with the 'others' for whom they ultimately act. By introducing a heuristic of multiple stewardship relationships within the investment chain client stewardship, end-investor stewardship, asset stewardship, and sustainability stewardshipthis article builds the model of enlightened stewardship and highlights a significant challenge: stewardship relationships beyond client stewardship operate outside the domain of hard law. As a result, the article advocates for stewardship codes to 'crowd in' enlightened stewardship, complementing both national and international regulatory frameworks and leveraging intrinsic motivations that drive responsible investment conduct. Using the UK Stewardship Code as a case in point, the article points to the current boundaries of other-regarding, enlightened stewardship and suggests that incorporating elements akin to section 172 of the UK Companies Act 2006 could provide much-needed clarity and guidance on the purpose of stewardship.