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Getting stewardship into the bloodstream

by Mark Goyder

18 months ago, in the depths of our banking crisis, Tomorrow’s Company came out with a report that drew attention to the erosion of stewardship in the activities of the shareholders of companies.

If you had told me then that, 18 months later, the official regulator would be consulting on a code that would hold all shareholders to account for their exercise of stewardship, I would not have believed that progress might be so rapid. .

We have come a long way. Sir David Walker in his report on the banks reflected this new emphasis on stewardship. The investors in the form of the Institutional Shareholders Committee, felt they had to respond. The Financial Reporting Council were handed the task of holding the investors to account.

People now accept stewardship is important and neglected. Now the task is to find practical ways of making it happen. In Tomorrow’s Company, we believe that will come from a combination of, better pension fund mandates, marketplace innovation by asset managers and investment consultants, and greater transparency stimulated by regulation.

In years to come we can imagine retail customers as well as pension trustees making a firm commitment to be good stewards, and picking investment funds that can boast a stewardship kitemark.

Now the task is to define stewardship, and help people identify who is truly practising it.

Tomorrow’s Company has done that, and you can read the answers in our newly published evidence submitted to the financial reporting Council.

Someone once defined a stockbroker as “someone who invests your money until it’s all gone” .

There is a deep human instinct that says that if someone is entrusted with my savings, I expect them to do more than simply move money around. I want them to ensure the money is well invested and that means having their finger on the pulse of the investment. That’s stewardship and we in Tomorrow’s company want to encourage all of us to demand stewardship by those who look after our hard-earned savings. Our work on this continues.

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