The Government published on 22 November 2012 its response to the The Kay Rcview of UK Equity Markets and Long-term Decision Making. The Kay Review – which we discussed in this post – made 17 specific recommendations aimed at, in the Government’s words, “reversing the culture of short-termism and restoring relationships of trust and confidence in the investment chain”; the Government response sets out its (overwhelmingly supportive in principle, if not in detail) stance on each of those recommendations
The BIS press release is here and the Government response document is here. From the press release:
“Today’s response sets out the work Government is taking forward to deliver Kay’s recommendations, including:
• Working with EU counterparts to end mandatory quarterly reporting and help reduce the excessive focus on short-term earnings;
• Endorsing clear minimum standards of behaviour for all investment intermediaries to ensure they act in the long-term best interests of their clients. The Law Commission has been asked to review the legal obligations on intermediaries, to take appropriate long-term factors into account. The FSA has also been asked to ensure that the regulatory framework promotes high standards of behaviour throughout the investment chain;
• Encouraging industry to establish an Investors’ Forum to champion constructive engagement with companies;
• Endorsing Good Practice Statements for company directors, asset managers and asset holders, which emphasise the need for trust-based relationships and advocate more collective action by institutional shareholders; better disclosure of costs in the investment chain; increased transparency and fairness in stock lending; and better alignment between pay and long-term performance.”
See also: Anthony Hilton on the Government’s response – Evening Standard
