Asset manager Fidelity International has issued a new report calling for the introduction of a stewardship code in China to encourage more investors to exercise their voting rights. The report was published in collaboration with Beijing-based proxy advisory firm ZD Proxy Shareholder Services. Over the past seven years, investors have become more active and minority shareholders are now “a force to be reckoned with”, it said. However, recently the participation of minority shareholders in meetings has slowed, which may be due to lower foreign participation, said the report. “We may have hit a ceiling for the bottom-up, investor-driven improvements in stewardship practices, and the next phase of development may require clearer top-down direction from regulators,” said Tina Chang, Associate Director for Sustainable Investing at Fidelity International. Chang said there has already been “plenty of discussion” in the local market about the introduction of a formalised stewardship code for China, but added that timely “nudges” from regulators could encourage more investors to exercise their voting rights. “We expect momentum for stewardship to build following the issuance of the guidance,” Fidelity said in the report. “Aided by an increasingly enthusiastic institutional investor base, stewardship may finally make its mark as a catalyst for long-term value creation in China.”
