The Stewardship Code is ”soft law” to be applied on a ”comply or explain” basis.
In January 2016 the Minister of Business and Growth requested the Committee to draft a Stewardship Code in order to encourage the kind of stewardship in Danish listed companies that is beneficial to their value creation.
The 7 stewardship principles aims to promote the companies’ long-term value creation and thereby contribute to maximizing long-term return for investors. Thus, the Recommendations on Corporate Governance and the Stewardship Code are mutually reinforcing in serving a common purpose. The Stewardship Code should result in increased transparency as to how the individual investor chooses to exercise stewardship activities. Accordingly, the Code is not meant to establish a uniform approach for investors’ exercise of stewardship activities.
Like the Recommendations on Corporate Governance, these stewardship principles are “soft law “ to be applied on a “comply or explain” basis.
Thus, investors can choose either to comply with a given principle or not, in which case the investor should give an explanation as to why and how the investor has chosen to act in that particular regard.