So reads the headline on a press release from the Department for Business, Innovation & Skills:
The need for a fundamental change in the culture of investment was endorsed by Business Secretary Vince Cable today in his response to Professor John Kay’s independent Review of UK Equity Markets.
Dr Cable set out his support for Professor Kay’s 10 Principles for Equity Markets, which focus on reversing the culture of short-termism and restoring relationships of trust and confidence in the investment chain. The Government also committed to exploring whether changes in law or regulation are needed to deliver Kay’s principles in practice…
Vince Cable said:
“Many of us feel that in the past, our public companies and investors have focused on short-term profit at the expense of long-term value. The behaviour of many banks in the run up to the financial crisis is an extreme example of this quick buck mentality, but there is clearly a wider problem. That’s why I asked John Kay to look at what could be done to ensure equity markets support good, long-term decision making. His insightful review calls for a shift in the culture of investment and sets a clear challenge to companies and those who invest in them.
“His agenda is an ambitious one but I am very encouraged by the level of engagement we have seen already from investors. Not only on Kay’s ideas, but through our directors’ pay and shareholder voting reforms; in addressing diversity on corporate boards and through changes to the way companies report their business strategy and results. These actions will help restore trust in markets and in the system of capitalism on which our future prosperity depends.”