The United Kingdom's independent regulator, the Financial Reporting Council (FRC), played a huge role in answering to the criticisms regarding the duty of institutional investors in the run-up to the financial crisis after UK has included the 'comply or explain' approach to corporate governance for listed businesses through a 'Stewardship' Code in 2010.

The UK Stewardship Code, aims to enhance the quality of engagement between investors and companies to help improve long-term risk-adjusted returns to shareholders. First published in July 2010, the Code was revised in September 2012. Signatories were encouraged to update their policy statements after the revised Code took effect from 1 October 2012. The FRC sees the UK Stewardship Code as complementary to the UK Corporate Governance Code for listed companies and, like that Code, it should be applied on a 'comply or explain' basis.

At present, to be able to establish a clear point that the said code is intended to strictly make the businesses compliant to the rule, its near 300 signatories have been ranked based on the quality of their reporting.

According to FRC, all signatories had to create a statement of commitment to the code or explain why not approve it for they did not see the scheme appropriate to the model of their respective businesses. Some of the initial 300+ signatories have decided not to be part of it. However, the quality of commitment between major investors and large companies has enhanced subsequent the introduction of the Stewardship Code.

Stephen Haddrill, Chief Executive Officer of the FRC, said: "Constructive engagement between investors and companies is vital for the long-term success of our economy. Investors play a crucial role in encouraging companies to think more about their long-term strategy. Reporting against the Stewardship Code is not a box-ticking exercise and signatories were encouraged to provide a clear description of their approach to stewardship, with explanations for non-compliance where appropriate."