Business Secretary Vince Cable set to attack ‘corporate excess’
BUSINESS Secretary Vince Cable is set to attack City excess today, telling delegates at the Liberal Democrat conference in Liverpool that “capitalism kills competition”.
Mr Cable’s speech, which is expected to win over party members concerned about the coalition with the Conservatives, will detail Government plans to carry out a comprehensive review into corporate governance and economic short-termism.
He said: “We will look at the economic impact of takeovers, shareholder responsibility, corporate incentives and pay – all the factors that can help us build a framework founded on long-term economic logic.
“Short-termism and shareholder disengagement are an increasing problem for our economy. Short-term investors and financial gamblers value a quick buck above all else, for example, by driving company boards into accepting takeover bids that make no economic sense. We need shareholders that act like long-term owners, alive to the risks of instability and the broader consequences of how the companies they own behave.
Business lobby group the Confederation of British Industry (CBI) has accused Mr Cable of using “emotional language”.
The Government will launch a consultation in the autumn which is likely to look at the factors that drive market short-termism and the way in which directors are paid.
