A group of stakeholders within the investor community have with the assistance of The Institute of Directors in Southern Africa (IoDSA) convened a committee for the drafting of a code for responsible shareholder investing.

The new Code (yet to be named) aims to provide principles and guidance to institutional shareholders on how to responsibly execute their role as shareholders, and often today as agents on behalf of a dispersed shareholder base.

The Code will deal with matters such as accountability of institutional investors to the ultimate beneficiaries of these investments, engagement with investee companies, consideration of environmental, social and governance issues, voting and disclosure.

The new Code together with The King Report on Corporate Governance South Africa - 2009 (King III), will provide an important voluntary framework within which company governance, director and management conduct and accountability, and shareholder action and disclosure can monitored and assessed.

As with King III, which is not legislation but rather principles and practices that are adhered to on an "apply or explain" basis, the new Shareholder Code will seek to encourage best practice conduct by shareholders and companies.

"Today some companies still fail to implement sound governance practices, and may well continue to do so if stakeholders do not hold them to account. We believe shareholder and other stakeholders' activism and involvement will encourage and influence companies to apply best practice governance approaches such as King III", says John Oliphant from the Government Employees Pension Fund who chairs the Committee.

Other members consist of independents as well as representatives from the Association for Saving and Investment SA (ASISA) who in turn represents the majority of South Africa's asset managers, collective investment scheme management companies, linked investment service providers, multi managers and life insurance companies; IoDSA; JSE Limited; Cadiz; Element Investment Managers; Investec Asset Management; Mergence; Old Mutual; Public Investment Corporation; Principle Officers Association, Prudential, Regarding Capital Management (RE:CM); and the Securities Regulation Panel.

The Committee hopes to be able to issue a draft of the code for public comment later this year.