UK - Institutional investors and asset managers are increasingly looking to boost their stewardship resources, leading to a "positive" influence over corporate behaviour, according to the Investment Management Association (IMA).

In its second survey on stewardship practices, the association noted that, because the majority of asset owners tend to appoint an asset manager to manage their investment and may require the manager to undertake stewardship on their behalf, institutional investors are unlikely to commit to the code of Stewardship in "their own right".

However, according to the IMA, asset managers, on behalf of their clients, are seeking to increase resources in the field. It said respondents to its survey had increased their stewardship resources by 4% in 2011, compared with 2010. 

Liz Murrall, director of corporate governance, said: "We are encouraged by the increased number of respondents this year, which shows asset managers and owners are taking stewardship seriously and that the FRC Code is gaining authority with institutional investors.

"Not only is there increased engagement but it is working - companies have listened to investors and made positive changes."

Murrall went on to say that this engagement with the stewardship code "clearly" reflected the "positive" impact stewardship could have on corporate behaviour and over time should improve returns as investee companies were better managed.

In spite of those encouraging results, a number of barriers remain for asset managers and institutional investors when it comes to putting into practice stewardship, the association said.

One of the main issues refers to the resources required to monitor and engage effectively, both in terms of costs and the time.

These issues can be even more amplified depending on the manager's size of holding.

Therefore, one respondent stated in the survey that, given the fact it holds a large number of UK companies, it has to prioritise engagement due to resource constraints.

Additionally, some asset management firms still remain reluctant to sign the UK code, arguing that there are still gaps to fill.

In an interview with IPE earlier this year, Amanda McCluskey, head of responsible investment at First State Investments in Sydney, said the company had declined to sign up to the UK stewardship code, despite having integrated ESG factors into its investment processes worldwide.

"We have not signed the stewardship code because we do not think it will change the industry," she said at the time.

"We want harder questions, we need to be challenged, and we have to do something more than simply signing up to the code."