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8 - The Third-Generation UK Stewardship Code

Realising Enlightened Investor Stewardship

Published online by Cambridge University Press:  15 July 2026

Dionysia Katelouzou
Affiliation:
The Dickson Poon School of Law, King's College London
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Summary

Chapter 8 sets out a reform agenda for a third-generation (3G) UK Stewardship Code, grounded in the book’s normative and empirical analysis. It begins by diagnosing three core limitations of the current regime: conceptual drift; constraints on other-regarding responsibilities linked to materiality and investor duties; and persistent implementation gaps. In response, it proposes reform along two dimensions. First, it calls for a clarified, purpose-driven definition of investor stewardship – centred on a balanced, other-regarding model of enlightened stewardship. This model recognises the interdependence between financial returns and the long-term health of economic, social, and environmental systems, drawing on emerging interpretations of Section 172 of the Companies Act 2006. Second, it advocates strengthening stewardship reporting by embedding reflexivity and institutional learning. The chapter argues that investor stewardship should evolve from a compliance exercise into a credible mechanism for aligning capital with public value. Reimagined in this way, the 3G UK Code offers a forward-looking institutional response to the governance challenges of our time.

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