FRC Busts Corporate Governance and Stewardship Myths

The UK’s Financial Reporting Council (FRC) has published a ‘myth-buster’ to dispel common misconceptions about corporate governance and stewardship. The document looks to offer “greater clarity and understanding of these important topics”, defining corporate governance and stewardship, and outlining the powers the corporate governance code gives the FRC. The FRC underlined the importance of institutional investors’ role in promoting good corporate governance practices through active engagement with companies and exercising their voting rights. This could include advocating for better ESG practices, promoting transparency and accountability, and encouraging companies to consider the long-term interests of all stakeholders. The regulator also said well-governed firms tend to be more likely to create long-term value for shareholders, benefitting investors in the long run. Mark Babington, Executive Director of Regulatory Standards at the FRC, said: “There is still some confusion about what corporate governance and stewardship mean, what they involve and how the FRC fits in. We hope this myth-buster will dispel some of the myths around these two important topics and prove a useful tool for everyone, regardless of their experience in this area.” 

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