The Kay Foundation

23 July 2012 By Quentin Webb

Economist John Kay is with the zeitgeist in lambasting short-termism in UK stock markets. But his government-sponsored report on the problem advocates smallish changes to effect a major cultural shift. Without a big idea, keeping up the pressure for reform could prove tricky.

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On July 23, John Kay, a visiting professor at the London School of Economics, published the conclusions of his year-long independent review of British equity markets and “long-term decision making”. Business Secretary Vince Cable had launched the “Kay review” in June 2011.
Among other measures, the review recommends establishing an “investors’ forum” to facilitate collective action by investors, and imposing higher, “fiduciary” standards on fund managers and others involved in investment. It also says long-term performance incentives for company directors should be paid entirely in shares, and those of asset managers should be paid through an interest in the fund they manage.

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