The final version of the Walker Report on corporate governance of UK banks and financial institutions was published on Nov. 26. The Prime Minister requested the report, which was issued by the Treasury. Sir David Walker chaired the report team. He is a prominent City banker who has had stints at Lloyd’s and Morgan Stanley.

The Report includes, among its recommendations (no. 17, p. 17), one that would require fund managers to adopt the Code on the Responsibilities of Institutional Investors announced by the Institutional Shareholders Committee (ISC) on Nov. 16. The Code, which Walker suggests be renamed the “Stewardship Code,” would require, among other things, that managers commit to engagement or explain why they didn’t.

The renaming of the Code seems important. Its original name is undescriptive and passive. “Stewardship” implies action, taking charge of assets entrusted to the manager. It is a word of rich significance to mission- and faith-based investors. The oldest UK SRI mutual fund is the Friends Provident Stewardship Fund.

The Walker Report in total has come in for a good deal of criticism from people the Guardian refers to as “campaigners.” Nonetheless, in governance and engagement Walker seems a step forward. How large a step will be up to Parliament.

Below are links to the Walker Report, the ISC Code press release, and some background on Walker and the controversy surrounding his work.

A Review of Corporate Governance in UK Banks and Other Financial Industry Entities [PDF]

Press Release from Institutional Shareholders Committee on the Code on the Responsibilities of Institutional Investors [PDF]

Fund managers in UK must sign up to stewardship principles or say why not: Walker report final
Responsible Investor

Sir David Walker: ‘I’m a man of the people, not a City grandee’
Guardian

Campaigners blast Walker report on banks
Guardian