A new report from the Investment Association (IA), which attempts to reset the UK stewardship debate, has placed greater onus on asset owners to tighten mandate design, oversight and evidence of outcomes.
Drawing on insights from the IA’s newly established Stewardship Working Group, the report — Realigning stewardship: Delivering sustainable value through stewardship — published today, has highlighted structural tensions that act as barriers to practising stewardship.
The report argues that stewardship is vital for long-term value creation and market stability. However, it points out that the current framework faces criticism due to its complexity, reporting demands, and concerns about the UK’s competitiveness as a listing venue.
The UK Stewardship Code 2026 came into force on 1 January 2026, following a review by the Financial Reporting Council (FRC).
Goals
The report’s main goal is to clarify what stewardship can and cannot achieve and seeks to differentiate between company-specific stewardship and ‘systemic’ stewardship.
Furthermore, it aims to move the focus away from simple counts of activities, like votes and engagement numbers, toward reporting that is linked to outcomes. It outlines six structural challenges and 10 recommendations for asset owners, investment managers, consultants, and regulators.
Speaking to IPE, Andrew Ninian, director of stewardship risk and tax at the IA, said: “It [stewardship] is about making sure we’re generating long-term returns for clients and that we are meeting their expectations, which sometimes gets lost.”
The report said that if asset owners want stewardship to be outcome-led, they must specify which stewardship they want, price the trade-offs, and stop outsourcing judgment to activity metrics.
“We need to get the asset owner perspective and look at these challenges and recommendations in the round and say how do we take this forward, and how do we get a solution that works for the whole of the UK market,” Ninian added.
Key challenges set out in the report included setting realistic expectations about what stewardship can achieve, managing high expectations from government and regulators, and avoiding an over-reliance on voting as the primary barometer of stewardship.
It also noted accommodating different investment strategies and stewardship approaches, addressing the growing burden of stewardship reporting, and recognising the costs created by excessive reporting as further challenges.
The IA’s recommendations include shifting accountability from activity-based metrics to outcomes linked to value creation, embedding stewardship more clearly into mandates and manager–owner relationships, and supporting more ongoing, informed dialogue between asset owners and investment managers about objectives, trade-offs and delivery.
