The Kay Review of UK Equity Markets and Long-Term Decision Making - Business, Innovation and Skills Committee Contents

1   Introduction

Our inquiry

1. In June 2011, the Secretary of State for Business, Innovation and Skills asked the renowned economist Professor Kay to review whether equity markets in the UK gave sufficient support to the key objectives of developing British companies' capacity for innovation, brands and reputation and the skills of their workforce. Professor Kay published his final Report in July 2012 titled the Kay Review of UK equity markets and long-term decision making. The Government Response was then published in November 2012. On 12 December 2012, we asked for submissions of evidence on the recommendations set out in the Kay Review and the Government's plans for their implementation.

2. We took evidence from seven panels:

·  Professor John Kay, Chair of the Review of UK Equity Market and Long-Term Decision Making

·  The Lord Myners CBE

·  Catherine Howarth, Chief Executive Officer, FairPensions (now ShareAction), Christine Berry, Head of Policy and Research, FairPensions (now ShareAction), Simon Wong, Visiting Fellow, LSE and Partner, Governance for Owners, and Dr Paul Woolley, Head of the Paul Woolley Centre for the Study of Capital Market Dysfunctionality

·  Dominic Rossi, Global Chief Investment Officer, Fidelity Worldwide, Anne Richards, Global Chief Investment Officer, Aberdeen Asset Management, Harlan Zimmerman, Senior Partner, Cevian Capital, and Roger Gray, Chief Investment Officer, Universities Superannuation Scheme

·  Anita Skipper, Corporate Governance Adviser, Aviva Investors, Steve Waygood, Chief Responsible Investment Officer, Aviva Investors, Neil Woodford, Head of UK Equities, Invesco Perpetual, and Chris Hitchen, Member of Kay Advisory Board Team and Chief Executive, Railpen

·  Daniel Godfrey, Chief Executive, Investment Management Association, Guy Sears, Director, Institutional, Investment Management Association, Penny Shepherd, then Chief Executive, UK Sustainable Investment and Finance Association,[1] and Matthew Fell, Director of Competitive Markets, Confederation of British Industry

·  Rt Hon Vince Cable MP, Secretary of State for Business, Innovation and Skills

We are grateful to all witnesses for their contributions to this inquiry and to all those who submitted written evidence.

The Government told us that the Kay Review was not a "list of detailed reforms" but rather "a framework for further work".[2] This did not entirely tally with Professor Kay's outlook; he said that the Review should "deliver the improvements to equity markets necessary to support sustainable long-term value creation by British Companies".[3] This remains to be seen, but it was clear that both Professor Kay and the Department agreed that "a sustained commitment to reform from Government, regulators and market participants" was needed to successfully reform the equity markets to the benefit of both its users and the economy as a whole.[4]

1   Penny Shepherd stepped down as Chief Executive of UKSIF in May 2013. She was succeeded by Simon Howard. Mr Howard has had opportunity to review the evidence that Ms Shepherd presented; which continues to represent the views of UKSIF. Back

2   Ev 86 Back

3   Professor Kay, The Kay Review of UK equity markets and long-term decision making, July 2012, page 9 Back

4   Ev 86 Back

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© Parliamentary copyright 2013
Prepared 25 July 2013