In a speech on corporate governance made on 22 June 2011 at the biennial conference of the Association of British Insurers (ABI), Vince Cable, Secretary of State for Business, outlined particular areas of concern and announced the Government’s latest initiatives:
Dr. Cable advised that remuneration committees and institutional investors should take a firmer line in up-holding the UK Corporate Governance Code, which calls for executive remuneration to be linked to performance and to the long-term success of the company. The Government intends shortly to consult on changes to company reporting generally and will propose stricter provisions on the disclosure of executive pay and its connection to company performance. In the meantime, Dr. Cable will hold discussions with the chairs of remuneration committees and other relevant parties with a view to announcing further action in the autumn.
Equity capital markets: independent review into competitiveness
Dr. Cable announced that the Government has appointed Professor John Kay to undertake an independent review into investment in UK equity markets and its impact on the long-term competitive performance and governance of UK quoted companies. 2 For details, click here.
Women on boards: FTSE 350 companies urged to publish target figures for 2013 and 2015
Dr Cable also referred to Lord Davies’ report, ‘Women on boards’, published in February this year.3 Among its recommendations, the Davies Report called for chairs of all FTSE 350 companies to publish aspirational targets for the number of women they expect to have on their boards in 2013 and 2015. In his speech, Dr Cable took the opportunity to urge all chairmen to publish their target figures by September this year. At present, the Government intends to see what progress can be made on a voluntary basis but will be reviewing this approach if it considers it necessary.
Text of Dr Cable’s speech, published by the Department for Business Innovation & Skills on 23 June 2011, available at: http://www.bis.gov.uk/news/speeches/vince-cable-association-britishinsurers- 2011 http://www.bis.gov.uk/news/speeches/vince-cable-association-britishinsurers-