Stewardship Responsibilities of Institutional Investors in India: Global perspectives and the Way Ahead
– Sikha Bansal, Partner & Neha Malu, Senior Executive | corplaw@vinodkothari.com
“Stewardship” literally means the act of protecting the rights of the person to whom it is acting as a steward. In the context of shareholders’ governance and capital markets, the institutional investors play the stewardship role for their clients/ beneficiaries as the funds invested by the institutional investors in the companies actually belong to the large pool of diversified investors who had invested in the institutional investors and hence it will not be wrong to say that the institutional investors are the “stewards” and not the “owners” of the funds invested by them. As defined by UK Stewardship Code (2020)[1], “Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society”.
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