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.
In April 2019, Denmark passed legislation regarding stewardship in Danish listed companies, and thereby made 6 of the 7 stewardship principles mandatory.
The Stewardship Code was therefore applicable from November 2016 until 31. January 2019.
The 7 stewardship principles aimed to promote the companies’ long-term value creation and thereby contributed to maximizing long-term return for investors. Thus, the Recommendations on Corporate Governance and the Stewardship Code were mutually reinforcing in serving a common purpose. The Stewardship Code resulted in increased transparency as to how the individual investor chooses to exercise stewardship activities. Accordingly, the Code was 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 could 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 had chosen to act in that particular regard.