5 February 2026

6 challenges, 10 recommendations: The IA's blueprint for better stewardship

By the Impactive team

6 challenges, 10 recommendations: The IA's blueprint for better stewardship

In February 2026, the UK's Investment Association (IA) published a significant report examining the state of stewardship in UK investment management. Realigning Stewardship: Delivering Sustainable Value Through Stewardship tackles fundamental questions about whether current stewardship practices are fit for purpose and how the framework can better serve investors, companies, and the broader economy.

Understanding stewardship: definition and reality

The report works from the Financial Reporting Council's 2026 definition: stewardship means "the responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries." In practice, this translates to a range of investor activities — from initial research and ongoing monitoring to direct company engagement, voting at shareholder meetings, and collaborative initiatives with other investors.

The report acknowledges stewardship's proven track record in strengthening corporate governance, improving board composition, and raising disclosure standards across markets. Yet it's equally frank about the boundaries of investor influence: shareholders can advocate for change but cannot direct management decisions, which remain the board's responsibility.

Six barriers holding back effective stewardship

The IA working group pinpointed six fundamental problems limiting stewardship effectiveness today:

1. Unrealistic expectations about what stewardship can deliver

Many stakeholders expect stewardship to solve systemic problems like climate change while simultaneously maximising short-term returns. The reality involves difficult choices between long-term sustainability goals and nearer-term financial performance. These tensions need honest acknowledgment rather than being glossed over in marketing materials.

2. Overemphasis on voting at the expense of other tools

The industry has become fixated on voting records as the main measure of stewardship quality. This narrow focus ignores how much value comes from behind-the-scenes engagement, collaborative pressure, and strategic escalation. The report argues for recognising the full toolkit investors use, particularly since voting works best for clear-cut governance issues but struggles with nuanced sustainability questions.

3. Lack of transparency around different stewardship models

Active managers, index trackers, and specialist funds all approach stewardship differently based on their strategies and resources. Neither companies nor clients fully understand these variations, leading to mismatched expectations.

4. Disconnection between investment and stewardship teams

Many firms still operate with portfolio managers making investment decisions while separate stewardship teams handle engagement and voting. When these groups don't communicate effectively, companies receive mixed messages and clients question whether stewardship genuinely influences investment choices.

5. Reporting overload with limited value

Asset managers face mounting demands for stewardship reports from clients, consultants, and regulators — often with little coordination on format or content. The result is extensive reporting that emphasises activity (number of meetings held, votes cast) rather than demonstrating actual impact or linking back to investment outcomes.

6. Resource constraints on all sides

Both investors and companies have finite time and budgets for stewardship work. Without clear prioritisation frameworks, resources get spread too thinly across too many issues.

Ten recommendations for the future

For asset owners and investment managers

  • Recommendation 1: Embed stewardship into the relationship and mandate between investment managers and asset owners to provide greater realism on what can be achieved through stewardship to deliver on client objectives and expectations.
  • Recommendation 3: Clients should articulate the type of stewardship which meets their investment objectives and priorities — whether focused on financially material issues or extending to systemic stewardship on specific themes.
  • Recommendation 6: Investment managers should share fund level information with clients on how their stewardship approach supports the investment strategy at the pre-appointment phase.

For investment managers

  • Recommendation 2: Investment managers should be clear with clients on the likely impacts of pursuing specific investment objectives which might limit the investible universe, leading to potential time horizon trade-offs or impact on investment returns.
  • Recommendation 5: In their stewardship reporting, investment managers should provide best practice case studies of the circumstances in which voting is used and how this works alongside other stewardship mechanisms.
  • Recommendation 10: The investment industry should better articulate the cost and value of stewardship reporting to understand whether it is delivering decision-useful information to clients.

For asset owners, investment consultants, and civil society

  • Recommendation 4: The assessment and oversight of stewardship quality should be based on outcomes linked to value creation rather than activity metrics (such as votes against or number of engagements).

For investment consultants

  • Recommendation 9: Investment consultants should provide greater transparency on how they are supporting good stewardship outcomes including supporting clients to fulfil their objectives against the Stewardship Code.

For regulators

  • Recommendation 7: Following the first round of reporting against the new Stewardship Code, the IA will share best practice examples of integrating stewardship into the investment process. The industry should seek to speak with a single and consistent voice.
  • Recommendation 8: Stewardship regulation and industry reporting should be reframed to focus on driving stewardship outcomes.

How Impactive's technology addresses these challenges

The problems identified in the IA report aren't abstract — they're daily frustrations for stewardship professionals. Impactive's platforms directly address these pain points.

Impactive Engagement Tracker

Recommendation 4 calls for judging stewardship by outcomes rather than counting meetings or votes. Our engagement tracking platform is built around this principle — documenting not just that a meeting happened, but what was sought, what progress occurred, and what ultimately changed. This shifts the conversation from "how many engagements did you do?" to "what did those engagements accomplish?"

When portfolio managers and stewardship specialists work from the same engagement records and objectives, it eliminates conflicting narratives and demonstrates to clients how stewardship connects to investment strategy (Recommendations 6 and 7).

Our platform captures engagement data once, then generates reporting across multiple frameworks — client reports, regulatory filings, stewardship code disclosures — aligned with Recommendation 8's push for outcome-focused reporting.

Stewardship Intelligence platform

Our intelligence platform gives companies visibility into their shareholders' stewardship philosophies, voting patterns, and engagement priorities — demystifying how different investors approach stewardship (Recommendation 3). It also provides asset owners and managers with the data they need for honest conversations about trade-offs (Recommendations 1 and 2), including historical precedents and peer comparisons.

What this means going forward

The IA report marks a turning point in UK stewardship. Rather than defending current practices or calling for radical overhaul, it maps a practical evolution: clearer communication about objectives, better measurement of results, smarter use of limited resources, and technology that connects stewardship work to investment outcomes.

For investment organisations serious about stewardship, the path forward requires infrastructure that does more than store data — systems that demonstrate impact, facilitate internal coordination, streamline reporting without losing substance, and provide the market intelligence to make informed engagement decisions.

We'd welcome the opportunity to discuss how Impactive can help your organisation implement the IA report's recommendations.

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