Today, 23 July 2012, Professor John Kay has published the Final Report of his independent review to examine investment in UK equity markets and its impact on the long-term performance and governance of UK quoted companies. The Secretary of State for Business, Innovation and Skills, Vince Cable has welcomed the Review’s Final Report, with the following comments:
“This is an insightful and powerful review which describes vividly the flaws of the UK’s financial markets and their relationships with investors and businesses.
Since becoming Business Secretary I have been a vocal advocate for a new model of responsible capitalism based on creating long-term value rather than short-term profit. Equity markets have a vital part to play in ensuring we have well run companies providing sustainable returns for investors. This report is an important and timely contribution to the discussion of how we achieve this.
Professor Kay has set out his clear vision for a way forward, with recommendations for government and others, and I will consider these in depth and look forward to responding in detail later this year.”
The three members of the review’s Advisory Board have also welcomed the final report, with the following comments:
Sir John Rose commented:
"I fully support John Kay's report. It has clearly identified a number of factors that contribute to both Investors and Companies taking a short term view and it has proposed some practical mechanisms to encourage long term investment. As importantly, it highlights the changes in attitude that must underpin such a change."
Chris Hitchen commented:
"If savers are to achieve good long-term returns, they need everyone in the investment chain to be aligned with them. Professor Kay makes a compelling argument that trust must become the cornerstone of the UK equity market once again."
James Anderson commented:
"John Kay has clearly identified asset managers as a critical factor in in improving the functioning of the investment chain. We need to up our game further in pursuit of good corporate stewardship and better outcomes for savers. I would like to see fund managers adopt the good practice statements and the emphasis on restoring trust that the review recommends."
Mark Fawcett, Chief Investment Officer, NEST says:
‘As a long term investor we fully endorse the Kay report. We believe focus should be on long term performance and building sustainable and profitable companies and equity markets that benefit retirement outcomes for the millions of workers who are saving for their retirement for the first time in pensions.
‘We particularly welcome the emphasis on improving stewardship rather than taking a regulatory approach and believe those who buy assets need to act much more like long term owners rather than short term tenants.'
Please click below to view the full report.
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