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ACCA voice concerns about stewardhip code

Stewardship code lacks enforcement mechanism

Accounting institute, ACCA, has questioned whether a proposed stewardship
code, aimed at encouraging large investors to take an active interest in the
governance of their investors, can be effective with no enforcement mechanism.

The stewardship code was recommended by the treasury select committee in the
wake of the crisis to force companies to take a greater interest in their
investments.

Paul Moxey, head of corporate governance and risk management at ACCA said he
supported the objective, but questioned whether it “would be effective in
improving behaviour if there is to be no enforcement mechanism.”
“We do have an issue with some aspects of the proposed code, for example the
adoption of the term ’stewardship’ and the related suggestion that shareholders
have ‘responsibilities’ – as opposed to rights – to engage with their investee
companies.”

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