The United Kingdom’s idea to adopt a stewardship code sparked a global shareholder stewardship movement. Unsurprisingly, Singapore as a corporate governance leader in Asia, adopted a stewardship code. Based on a superficial textual analysis, the Singapore Code appears to be a near carbon copy of the UK Code. However, this Article, which provides the first in-depth comparative analysis of stewardship in Singapore, demonstrates how Singapore has turned the UK model of stewardship on its head. Rather than enhancing the shareholder voice of institutional investors, shareholder stewardship has been used in Singapore as a mechanism for entrenching its successful state-controlled and family-controlled system of corporate governance. This development has been entirely overlooked by prominent international observers and would be beyond the wildest imaginations of the original architects of the UK Code. Viewed through an Anglo–American lens, this use of “stewardship” may suggest that Singapore has engaged in a corporate governance sham. However, this Article argues the opposite: it appears to be a secret to Singapore’s continued corporate governance success and provides a much-needed Asian (as opposed to Anglo–American) model of good corporate governance for Asia.

Within less than twenty years the idea of shareholder stewardship has become a global phenomenon. In 2010, the United Kingdom released the world’s first stewardship code to cure what was perceived to be the UK’s primary corporate governance malady: rationally passive institutional investors in a country characterised by a dispersed ownership structure. Today, UK-style stewardship codes exist in 20 jurisdictions, on 6 continents, and are embedded in a panoply of legal systems, shareholder markets, and corporate cultures. This introductory Chapter to the Global Shareholder Stewardship edited book explains why shareholder stewardship around the world is far more complex than the existing literature suggests and how this complexity impacts current theories and existing practices. To explain complexity, the Chapter provides a loose taxonomy of global shareholder stewardship and examines stewardship from multiple perspectives. This complexity, which has largely been overlooked in the literature, creates distinct varieties of stewardship. Based on the distinct varieties of stewardship in jurisdictions around the world, this Chapter concludes by illuminating the challenges and possibilities of global shareholder stewardship. The taxonomy also serves as a useful lens for observing the common themes and points of intersection that make the whole of this Book greater than the sum of its individual Chapters.

Stewardship codes as they originated in the UK focus on the role and function of institutional investors. Yet in Asia, where institutional investors play a much less dominant role, stewardship codes have also become popular. This Chapter explores why and what this means for comparative corporate governance. By showing how stewardship codes perform diverse, jurisdiction-specific functions in Asia, this Chapter reveals the utility of stewardship codes as a malleable vehicle for advancing political agendas and halo signalling. It also shows that, contrary to prevailing assumptions, UK-style stewardship codes have not been ‘transplanted’ in both form and function. Rather, Asia exhibits ‘faux convergence’a distinctive form of functional divergence within superficial formal convergence, and which challenges and adds to scholarly understanding of convergence as a global corporate governance phenomenon.

This Chapter demonstrates that institutional investors have become an important vector in China’s autochthonous corporate governance model, which can no longer be ignored. To accurately understand the role of institutional investors in Chinese corporate governance and how effective they are in improving corporate governance in China, these developments must be understood on their own terms – in China’s unique political-economic context in which the Chinese Communist Party (CCP) has ultimate control. The same is true for understanding how Chinese companies and institutional investors fit into the CCP’s broad-based campaigns to address social inequality and improve the environment. The Chapter concludes that to see these developments as part of a UK-inspired ‘global shareholder stewardship’ movement, would make Western pundits seem like the proverbial woman who only has a hammer and sees everything as a nail. In arriving at this conclusion this Chapter reveals how the CCP has actively and gradually promoted the growth of domestic institutional investors, in terms of types and size, through relaxation of policies and law reforms to improve corporate governance and stabilize the stock market, while limiting the influence of foreign institutional investors. It further analyzes all the Activist Campaigns undertaken by institutional investors in China and maps the network of government bodies, regulations, and tactics that the CCP has developed to directly and indirectly control State-Owned Institutional Investors (SOIIs) and Private-Owned Institutional Investors (POIIs) for the purpose of policy channelling.

UK-style shareholder stewardship is a global legal misfit because it was designed for a jurisdiction with dispersed shareholding where institutional investors collectively control a majority of the shares but has been transplanted into jurisdictions where controlling shareholders predominate. What ought to be the role of shareholder stewardship in a world dominated by controlling shareholders? This chapter analyzes the effectiveness of shareholder stewardship in advancing ESG in controlled jurisdictions then evaluates the effectiveness of the only stewardship code – the Singapore Family Code – to have attempted to reorient UK-style stewardship to a controlling shareholder environment. It concludes that prospects for shareholder stewardship in jurisdictions where controlling shareholders predominate are likely limited. Although a reoriented approach may help nudge controlling shareholders towards ESG, hard law will likely be needed to bring about real change. This suggests that shareholder stewardship may be used as a smokescreen by controlling shareholders and governments, sending a formal signal that they are addressing ESG when functional change is limited in practice.