Global Shareholder Stewardship: Complexities, Challenges, and Possibilities

in Global Shareholder Stewardship, Dionysia Katelouzou & Dan W. Puchniak eds, Cambridge University Press, Forthcoming

European Corporate Governance Institute - Law Working Paper No. 595/2021

59 Pages Posted: 29 Jun 2021 Last revised: 4 Jul 2021

See all articles by Dionysia Katelouzou

Dionysia Katelouzou

King's College London - The Dickson Poon School of Law; Transnational Law Institute

Dan W. Puchniak

NUS Law; ECGI

Date Written: June 23, 2021

Abstract

Within less than twenty years the idea of shareholder stewardship has become a global phenomenon. In 2010, the United Kingdom hastily released the world’s first stewardship code to cure what was perceived to be the UK’s primary corporate governance malady: rationally passive institutional investors in a country characterised by a dispersed ownership structure. Today, UK-style stewardship codes exist in 20 jurisdictions, on 6 continents, and are embedded in a panoply of legal systems, shareholder markets, and corporate cultures. This introductory Chapter to the Global Shareholder Stewardship edited book explains why shareholder stewardship around the world is far more complex than the existing literature suggests and how this complexity impacts current theories and existing practices. To explain complexity, the Chapter provides a loose taxonomy of global shareholder stewardship by categorizing stewardship along three dimensions. The first-dimension illuminates how stewardship can be conceived in a variety of ways – which makes the intellectual exercise of understanding stewardship complex and presents a challenge for policymakers to implement an idea with multiple conceptions. The second-dimension compares the formal design and content of stewardship codes globally and reveals that they have largely been modelled after the first version of the UK Code (2010/2012) – creating a mirage of global uniformity based on the UK Model of stewardship. The third-dimension demonstrates how the different origins of the codes (government codes versus institutional investor codes), a variety of mechanisms for enforcing (or not enforcing) codes, and jurisdiction-specific corporate governance factors that impact how the codes function, result in stewardship serving a variety of functions which would have never been anticipated by the original drafters of the UK Code. This complexity, which has largely been overlooked in the literature, creates distinct varieties of stewardship. Based on the distinct varieties of stewardship in jurisdictions around the world, this Chapter concludes by illuminating the challenges and possibilities of global shareholder stewardship. The taxonomy also serves as a useful lens for observing the common themes and points of intersection that make the whole of this Book greater than the sum of its individual Chapters.

Keywords: stewardship, institutional investors, controlling shareholders, comparative law, Asia, sustainability, enforcement, ESG

JEL Classification: K22, K42, L50

Suggested Citation

Katelouzou, Dionysia and Puchniak, Dan W., Global Shareholder Stewardship: Complexities, Challenges, and Possibilities (June 23, 2021). in Global Shareholder Stewardship, Dionysia Katelouzou & Dan W. Puchniak eds, Cambridge University Press, Forthcoming, European Corporate Governance Institute - Law Working Paper No. 595/2021, Available at SSRN: https://ssrn.com/abstract=3872579 or http://dx.doi.org/10.2139/ssrn.3872579

Dionysia Katelouzou (Contact Author)

King's College London - The Dickson Poon School of Law ( email )

Somerset House East Wing
Strand
London, London WC2R 2LS
United Kingdom

Transnational Law Institute ( email )

London, England WC2R 2LS
United Kingdom

Dan W. Puchniak

NUS Law ( email )

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Singapore
(65) 6516 3625 (Phone)

HOME PAGE: http://https://law.nus.edu.sg/people/dan-w-puchniak/

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HOME PAGE: http://https://ecgi.global/users/dan-puchniak

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