Charting the Contours of Shareholder Stewardship’s "Expectations Gap" : Some Preliminary Findings

Savva, Rafael (2025) Charting the Contours of Shareholder Stewardship’s "Expectations Gap" : Some Preliminary Findings. In: Socio-Legal Studies Association (SLSA) Annual Conference, 2025-04-15 - 2025-04-17, University of Liverpool. (Unpublished)

Abstract

A recurring theme in the literature on UK shareholder stewardship is that an “expectations gap” exists between institutional shareholders and regulators about institutional shareholders’ role as “stewards”. However, no previous studies examined empirically the expectations gap per se regarding its severity and causes. This ongoing study aims to examine how institutional shareholders perceive their shareholder-stewardship-derived "responsibilities" vis-à-vis engagement practices. This can help appreciate the expectations gap’s severity from the perspective of engagement practices and draw testable hypotheses about its probable causes. The study will be completed in three stages. The first stage of this study involves conducting a thematic analysis of a sample of reports made by institutional shareholders in compliance with the 2020 Stewardship Code and their engagement policies. The aim is to draw from these reports and policies themes about how institutional shareholders may perceive their shareholder-stewardship-derived responsibilities related to engagement practices. The study uses Braun and Clarke’s methodology for thematic analysis, conducted using ATLAS.ti. Initial findings at this stage suggest that there are nuances in institutional shareholders’ understanding and appreciation of their stewardship responsibilities as they relate to undertaking engagement practices, but they do not deviate much from policymakers’ articulation of institutional shareholders’ role as stewards. The broad conceptualisation of shareholder stewardship regarding shareholder engagement on the part of policymakers could be considered as a root cause of the nuances observed, for it provides institutional shareholders much room to interpret it differently.