Stewardship codes as they originated in the UK focus on the role and function of institutional investors. Yet in Asia, where institutional investors play a much less dominant role, stewardship codes have also become popular. This Chapter explores why and what this means for comparative corporate governance. By showing how stewardship codes perform diverse, jurisdiction-specific functions in Asia, this Chapter reveals the utility of stewardship codes as a malleable vehicle for advancing political agendas and halo signalling. It also shows that, contrary to prevailing assumptions, UK-style stewardship codes have not been ‘transplanted’ in both form and function. Rather, Asia exhibits ‘faux convergence’a distinctive form of functional divergence within superficial formal convergence, and which challenges and adds to scholarly understanding of convergence as a global corporate governance phenomenon.

This Chapter demonstrates that institutional investors have become an important vector in China’s autochthonous corporate governance model, which can no longer be ignored. To accurately understand the role of institutional investors in Chinese corporate governance and how effective they are in improving corporate governance in China, these developments must be understood on their own terms – in China’s unique political-economic context in which the Chinese Communist Party (CCP) has ultimate control. The same is true for understanding how Chinese companies and institutional investors fit into the CCP’s broad-based campaigns to address social inequality and improve the environment. The Chapter concludes that to see these developments as part of a UK-inspired ‘global shareholder stewardship’ movement, would make Western pundits seem like the proverbial woman who only has a hammer and sees everything as a nail. In arriving at this conclusion this Chapter reveals how the CCP has actively and gradually promoted the growth of domestic institutional investors, in terms of types and size, through relaxation of policies and law reforms to improve corporate governance and stabilize the stock market, while limiting the influence of foreign institutional investors. It further analyzes all the Activist Campaigns undertaken by institutional investors in China and maps the network of government bodies, regulations, and tactics that the CCP has developed to directly and indirectly control State-Owned Institutional Investors (SOIIs) and Private-Owned Institutional Investors (POIIs) for the purpose of policy channelling.