7 - The Danish Stewardship Code

Summary

In 2016 the Danish Committee on Corporate Governance adopted a Stewardship Code that was heavily inspired by the UK Stewardship Code. The Code consisted of seven stewardship principles that aimed to promote Danish listed companies’ long-term value creation and thereby contribute to maximizing long-term return for investors. In 2020 the Code was replaced by hard law as the revised Shareholder Rights Directive (SRD) was transposed in Danish law. The two frameworks share many similarities, which is why the observed institutional investor behaviour at AGMs during the regime of the Stewardship Code may give some indication as to what to expect in relation to engagement at AGMs under the new requirements based in hard law. The authors argue that new initiatives may be required as the implementation of SRD II may be insufficient to secure a strong stewardship regime in Denmark. In this respect, the authors discuss whether the Recommendations on Corporate Governance can serve as a catalyst for further and better engagement by institutional investors through establishment of a stronger interplay between the Recommendations and the hard law provisions on engagement.