Kay report to call for measures to tackle firms’ short-termism

A GOVERNMENT report due out today is expected to recommend an end to the practice of companies reporting results every quarter.

The proposal is one of a range of measures put forward by economist John Kay that aim to incentivise long-term performance over short-term returns at listed firms.

Other suggestions include forcing institutional investors to take a duty of care by setting out of a number of fiduciary duties that would force them to consider shareholder value when making their decisions.

Following the events of the so-called shareholder spring, the report will also call for greater clarity on executive remuneration, and for pay deals that are based on long-term performance.

High investment banking fees are also expected to be targeted.

Business secretary Vince Cable tasked Kay with investigating the effect of economic short-termism at the end of last year.

“To review a fund manager’s performance every three months gives you no relevant information at all about their substantive performance. That’s not only what people do at the moment but what they think that they ought to do,” Kay told The Sunday Times.