UK - Without active engagement on the part of pension funds the Stewardship Code will fail, Anita Skipper, Aviva Investors corporate governance director, has argued.

She urged trustees to embrace the Stewardship Code, launched by the Financial Reporting Council (FRC) in July this year, while speaking at the Trade Union Congress' (TUC) pension trustee conference.

Skipper told delegates that investors had to be realistic as to how much the Code could achieve. There were numerous obstacles to achieving better corporate governance, such as investors not having the resources to do it, and fund managers and consultants being faced with conflicts of interest.
"How many fund managers are willing to vote against their clients?" she asked.
But she urged pension scheme trustees to play their part in encouraging observance of the code by working with their fund managers on voting principles and writing it into their statements of investment principles.

A starting point was to monitor fund managers' voting records and to do this along with other annual reviews.
Peter Montagnon, senior investment advisor at the FRC said the Code was designed to encourage better dialogue between companies and shareholders and to persuade the authorities that a voluntary code was better than mandatory compliance.
He said: "In Brussels, there is a heated debate about corporate governance, where the view is that shareholders are traders and short term investors. The good news is that we have 75 signatories to the code, including 56 asset managers and 12 pension funds.

"But we do need some hedge funds, activist investors, foreign institutions and sovereign wealth funds to sign up," Montagnon added.
He said pension scheme trustees should take into account institutional investors' observance of the code when making fund manager appointments. He added he would know that the code had been a success when it was automatically incorporated into corporate governance behaviour.
Alan MacDougall, founder and managing director of Pension Investment Research Consultants said: "Voting really does matter. Anyone who voted in favour of RBS acquiring ABN Amro can now see the result of that voting decision."
When asked by delegates as to how trustees should implement the code, Montagnon said it was not the FRC's role to provide guidance, but the National Association of Pension Funds was working on a guide for trustees.