UK - The Financial Reporting Council (FRC) today published its long-expected Stewardship Code, aimed at improving communication between shareholders and companies.

It has been welcomed for spelling the end of a "tick-box approach" to governance, but some in the industry have warned it needs to be strengthened.

Under the new seven-part code, investors are being asked to disclose their voting policies and how they cast their votes, and to be aware of how effectively investee boards are being run.

The code also urges investors to hold meetings whenever they may have concerns over social or environmental matters, as well as company strategy.

If these cannot be resolved in private, the FRC recommends they seek assistance from other investors and intervene jointly.

FRC Chairman Baroness Hogg said any disclosures made by investors would help companies better understand what was expected of them.

She added: "We hope this new code will be a catalyst for better engagement between shareholders and companies and create a stronger link between governance and the investment process."

The announcement comes at a time when the European Commission (EC) is consulting on its own stewardship code.

The National Association of Pension Fund (NAPF) head of corporate governance David Paterson said the new code marked a "material advance" over the former Institutional Shareholders' Committee (ISC) code and added: "Implementation of the code does present some challenges for pension funds of all sizes."

The ISC code was used as the foundation for the new code following the Walker Review last year, but a number of changes have been made, such as proposing investors attend general meetings and inform companies if they do not agree with an investee violating the UK corporate governance code.

However, the issue of whether investors should reveal their policy on stock lending were not addressed.

Colin Melvin, chief executive of Hermes Equity Ownership Services, said the code was "a major step forward for the UK market", but added that he hoped it would be strengthened in coming years.

"One particular area where we would welcome this is for fund managers of pooled accounts to allow their clients to vote the shares attributable to them held within those accounts," he said.

He said allowing investors to have voting control in this case was "a basic building block for beneficial owners to act as good stewards".

Mevin was not alone in urging an improvement of guidelines.

Simon Wong, managing director at Governance for Owners, said it was "disappointing" the FRC had not strengthened the ISC code.

However, Ian Sayers of the Association of Investment Companies said developments should make the "tick-box approach" to governance a thing of the past, adding: "I hope agencies will be prepared to play their proper part in achieving this."