The Impact of Stewardship Codes on Corporate Governance and Sustainability

Publication Type:
Journal Article
Citation:
New Zealand Business Law Quarterly, 2017, 23 pp. 259 - 275
Issue Date:
2017-12-01
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Stewardship codes are a relatively new phenomenon in corporate governance, designed to encourage institutional investors to become more active and responsible shareholders. In the years since the United Kingdom introduced its stewardship code in 2010, many other jurisdictions have followed suit. It is highly likely that stewardship codes will continue to proliferate across the globe in much the same way that corporate governance codes have since the 1990s. This paper examines the nature, purpose and likely effectiveness of stewardship codes and considers whether New Zealand could benefit from such a code. The concept of investor stewardship raises many questions, both practical and theoretical, which are explored through an analysis of existing codes. Is stewardship likely to be a cost-effective method for improving corporate governance; is it feasible in practice; and what does it mean for the role of boards of directors of listed companies? Lastly, the article considers the potential for stewardship codes to promote corporate sustainability.
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