Bullish Cable announces corporate governance review

BUSINESS Secretary Vince Cable has launched a review into corporate governance promising to put shareholders in the driving seat of the UK economy.

The review was launched on the back of a speech given by Mr Cable to the Liberal Democrats’ annual conference in Liverpool where he promised to shine “a harsh light into the murky world of corporate behaviour.”

Details of the review will not be settled until later in the autumn but the Department for Business, Innovation and Skills pointed to takeovers, directors’ pay and shareholder engagement as subjects it is likely to cover.

Mr Cable 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.”

In his conference speech, Mr Cable said he made no apology for attacking the “spivs and gamblers” who damaged the British economy and promised to “protect consumers and keep prices down and provide a level playing field for small business”.

“Competition is central to my pro market, pro business, agenda,” he said.