STORS should get together to exert greater pressure on businesses, using a forum to establish common ground to better force company directors to fit shareholders’ long term aims, business secretary Vince Cable urged yesterday.
And he said a new stewardship code, binding shareholders’ votes on pay and proposed rules to force fund managers to act in investors’ long-term interest should make sure the ultimate owner of firms have more power over business bosses.
But many of his responses to the Kay Review into equity markets are only in the speculative phase.
For example, he is lobbying the EU to scrap rules forcing firms to report financial results quarterly, as the government lacks the power to make the change alone.
And Cable said he will not create a forum for investors to meet, arguing it is not his job to create a new quango but for the industry to decide upon its own needs. However rules on binding shareholder votes over executive pay are currently before MPs.
“Wisely, the government has decided not to widen the public interest test for takeovers. Politicians or regulators are not typically the best judges of the merits of a takeover,” said Dr Roger Barker, head of corporate governance at the Institute of Directors.