Australian Council of Superannuation Investors (ACSI) released The Australian Asset Owner Stewardship Code (the Code) on 17 May. The Code was developed by ACSI in consultation with its members and other stakeholders with the aim of increasing the transparency and accountability of stewardship activities in Australia. The voluntary Code is open to all asset owners (including super funds, endowments and sovereign wealth funds), not just ACSI members. Signatories will be required to publish a Stewardship Statement for the period 1 July 2018 to 30 June 2019 by (or before) 30 September 2019.

The Code sets out six principles which signatories must commit to on an 'if not, why not' basis with accompanying guidance on each principle.

The principles-based approach, ACSI writes, is intended to allow 'asset owners to pursue their stewardship approach in a manner that is consistent with the spirit of the principles rather than reporting specifically against the guidance. Guidance has been provided for each of the principles by way of example. These are suggestions only and should not be regarded as mandatory'.

A high level overview of the six principles and the accompanying guidance is below.

  1. Publicly disclose how they approach their stewardship responsibilities: The guidance on principle 1 states that for asset owners stewardship activities include voting, engagement (with companies in which asset owners are invested), policy advocacy and consideration of stewardship capabilities in the selection, appointment and monitoring of external asset managers and that these activities may be undertaken 'directly collaboratively, outsourced to asset managers or third party service providers or a combination of these'. ACSI states that disclosure can be made in a variety of ways eg in a separate stewardship policy, responsibility or sustainable investment policy, in a standalone stewardship statement, or on a separate section of the asset owner's website. ACSI emphasises that however disclosure is made, the information should be' readily accessible by the asset owner's beneficiaries and other stakeholders'.

  2. Publicly disclose their policy for voting at company meetings and voting activity: The guidance on principle 2 suggests that asset owners go beyond the minimum regulatory reporting requirements as set out in s29QB of the Superannuation Industry (Supervision) Act 1993 (Cth) and associated regulations and class orders, and in ASIC guidance: ASIC RG 252. The guidance includes a number of examples of disclosures that build on these requirements eg disclosing what principles guide voting decisions; whether and when the asset owner advises companies of a decision to cast a vote against or abstain from a resolution and the circumstances in which the asset owner will not vote (among others).

  3. Engage with companies either directly, indirectly (for example, via collective action or third-party providers) or both: The Guidance on principle 3 outlines the various forms engagement may take, the importance of ensuring compliance with insider trading provisions and encourages companies to disclose the existence of escalation policies (where they have one). Disclosing the policy will both emphasise the role that engagement plays in the asset owner’s investment activities and lead to greater accountability to beneficiaries and other stakeholders for asset owner engagement activities ACSI states. The guidance also outlines a number of examples of disclosures about engagement practices and states that where engagement activities are outsourced, the asset owner should monitor the quality of the delivery of those activities.

  4. Monitor asset managers' stewardship activities: The Guidance on principle 4 states that 'Asset owners have an important and direct influence on asset manager behaviour through their investment mandates and agreements. Asset owners cannot delegate their stewardship responsibilities, even when they employ asset managers to act on their behalf. If an asset owner outsources any of their stewardship activities to asset managers, they will remain responsible for monitoring and assessing the quality of those activities'. The guidance outlines a number of examples of the how asset owners can fulfil their stewardship activities in circumstances where some or all of this activity is outsourced to asset managers including: incorporating stewardship capabilities, policies and strategies into their asset manager selection, appointment and monitoring processes; clearly communicating their policies and expectations about stewardship to asset managers; monitoring the consistency of the asset manager’s engagement activities, voting decisions or recommendations against the asset owner’s own principles; partnering with asset managers in relation to engagement activities; and articulating what stewardship reporting is expected and when. It's also suggested that asset owners might consider an asset manager's performance in relation to stewardship activities as one measure of their asset manager's broader investment management performance.

  5. Encourage better alignment of the operation of the financial system and regulatory policy with the financial interests of long-term investors: ACSI writes that as asset owners' holdings are impacted by the economy as a whole, in circumstances where asset owners have concerns regarding systemic, industry-wide policies, practices or disclosures, they can encourage policy makers to better align the operation of the financial system and regulatory policy with the interests of long-term investors. ACSI suggests asset owners can do through contributing to government, parliamentary committees and other relevant public-regulatory or policy forums. The guidance suggests that 'typical examples' of industry wide issues on which asset owners might advocate include changes to the Corporations Law, Listing Rules or government policy in relation to governance and shareholder rights, climate change and ESG disclosures.

  6. Report to beneficiaries about their stewardship activities'. The guidance to principle 6 provides that disclosures should be 'readily accessible on an asset owner’s website, unless they are confidential or commercially sensitive'. The guidance adds that 'Disclosures might include links to engagement, voting, responsible investment or sustainability reports, annual reports, or other voluntary disclosures'.

ACSI states that there will be variation in the way in which the code is implemented depending on the asset owner's particular circumstances.

  • ACSI writes that the Code is directed at Australian asset owners who have equity holdings in Australian-listed companies (regardless of whether the holding is passively or actively held) whether or not they are ACSI members.

  • ACSI notes that as many assets owners will have exposures to international equity holdings and ownership rights in other asset classes they may wish to extend the application of the Code across their portfolio.

  • ACSI also encourages other institutional investors to apply the Code.

Signatory Requirements

  • Signatories will be required to publish a Stewardship Statement describing how they apply the principles and if one or more of the principles have not been applied, why the signatory has not adopted those elements.

  • Signatories are encouraged to review their own Stewardship Statement at least every two years and update it where necessary to reflect changes in stewardship practice. Signatories should notify ACSI if their statement is revised.

  • ACSI will maintain a list of signatories on the ACSI website, including a link to their Stewardship Statement and contact details.


  • Asset owners who adopt the Code must publish a Stewardship Statement on an 'if not, why not?' basis for the period 1 July 2018 to 30 June 2019 by or before 30 September 2019.

  • ACSI comments that should signatories elect to adopt the code earlier than this that initial Stewardship Statements may be for an earlier period or part year.

ACSI CEO Louise Davidson said in a statement announcing the launch of the code: 'Australian asset owners have a long history of engaging with companies and voting their shareholdings to protect and enhance long-term value for their beneficiaries. Signing up is an opportunity for asset owners to demonstrate that their intentions are backed by meaningful action. This is a strong basis from which to build trust and to set the tone for stewardship in Australia.'

Professor Ian Ramsay is quoted as stating: 'I would like to congratulate ACSI on this important initiative. Australian asset owners play a fundamental role in our financial markets and it's good to see them take the lead in setting best practice standards for the disclosure and management of stewardship activities'.

Industry has reportedly welcomed the Code according to Financial Standard. The article adds that HESTA and AustralianSuper have already committed to adopting the code.