UK - It is no longer acceptable for shareholders to be absentee landlords, according to Hermes Equity Ownership Services (EOS).

This was the conclusion of a roundtable discussion by Hermes EOS with the Financial Reporting Council (FRC) today ahead of the first anniversary of the UK Stewardship Code.

Colin Melvin, chief executive at Hermes EOS, said: "Since the financial crisis, corporate governance and responsible ownership have been driving shareholder agendas, and the introduction of the UK Stewardship Code was a move in the right direction.

"By establishing a code of best practice for institutional investors, it has highlighted the importance of the dialogue between companies and their shareholders.

"Moreover, it has encouraged UK institutional shareholders to meet their fiduciary responsibilities and become active owners of public companies, which should increase their long-term value."

There is a growing recognition by asset owners that companies with active, informed shareholders are more likely to create value than those without.

However, many investors are still approaching the problem in a formulaic way, just ticking boxes instead of tackling the real issues and engaging in a proper dialogue with the management of the companies in which they invest.

Asking the difficult questions and challenging companies on issues affecting long-term value are the right and responsible things for long-term shareholders to do, according to Hermes EOS.

When the UK Stewardship Code was launched in July 2010, it marked the first time, anywhere in the world, that a regulator had set standards for investor behaviour.

Now this trend toward stewardship codes is being considered across the globe, with the Netherlands, France, the European Commission, Canada and South Africa all contemplating similar steps.

The UK Stewardship Code calls on institutional asset owners and their agents to monitor their investments, intervening where necessary and escalating engagements as appropriate.

It also requires investors to be transparent about their policies on voting and engagement and to report regularly to their clients or beneficiaries.

A list of asset owners and managers that have published their commitment to the Stewardship Code can be found here.