UK - A new stewardship manifesto calls on pension fund trustees to define stewardship policy in their statement of investment principles (SIPs).
The Stewardship Manifesto, included in the report 'Tomorrow's Stewardship: why stewardship matters' by independent think-tank Tomorrow's Company, says: "There are serious weaknesses in the way our current system of investment in companies works. These can, and must, be overcome by the proper exercise of stewardship by individuals, pension funds, insurance companies, fund managers and the companies in which they invest."
The manifesto is addressed to all those who play a part in the chain that links ordinary savers to the companies in which their savings are invested.
It calls on:
The Financial Reporting Council (FRC) to strengthen the current Stewardship Code to show clients the stewardship content of each fund.
The new report itself is intended to help all stakeholders become more effective stewards.
Speaking at the launch of the report, Lindsay Tomlinson, chairman at the National Association of Pension Funds, said: "The task is to make stewardship work. The discussions are centred around how we do this and the pace at which it is done rather than the task itself. DB schemes are an endangered species and could do with some helpful stewardship."
He added that, to make stewardship work in the UK, international investors had to buy into it too.
Jonathan Lane, chief executive at property investment company Shaftesbury, advised investors to be in as much direct contact with companies as possible, as hiring consultants would only lead to more confusion and box-ticking.
Tomorrow's Company called on the UK government to set up a review of fiduciary duty at its 'Beyond Regulation' conference in March.
The aim would be to clear up confusion and make the stewardship of companies an explicit part of the duty of pension trustees.
It also called for a strengthening of the FRC's Stewardship Code so that it would improve choice by offering a clear grading of different funds' stewardship.
Tomorrow's Company has now extended its recommendations to apply to insurance companies, where it points out it is often impossible for clients to know who is exercising stewardship on their behalf, let alone influence that stewardship.
On 22 June, Secretary of State Vince Cable is expected to respond to these challenges as part of his vision for stimulating long-term growth, when he addresses the Association of British Insurers.