Corporate accountability


Shareholders and the public have lost confidence in the way companies are run. They believe that companies should be rewarded for success, not failure.

Making companies more accountable in how they work - and showing that they are improving - will increase investor and public confidence, making them more attractive to investors and giving the public more trust in their products and services.


To make companies more accountable to their shareholders and the public, the government is:


The Financial Reporting Council’s (FRC) UK Corporate Governance Code, launched in 2010, sets out good principles for running a company board.

The FRC’s UK Stewardship Code makes investors more answerable to their clients and beneficiaries.

The FRC have a detailed explanation about why they are improving these codes and how they fit into government regulation in the UK approach to corporate governance.

In July 2012 Professor Kay published his review of equity markets, looking at how investment in UK public companies influences the decisions they make and their long-term performance.

In November 2012 the government published its response, welcoming the Kay report and accepting Professor Kay’s analysis and conclusions. See the full background on the review, including responses to the call for evidence and the consultation, and the government’s response.

In October 2014 the government published a further report setting out achievements made by the government, regulatory authorities and market participants carrying out the recommendations in the ‘Kay review of UK equity markets and long-term decision making: implementation progress report’.

We also published some independent research into the way long-term investors measure the performance of companies and of their investment funds. See ‘Metrics and models used to assess company and investment performance’ (BIS research paper 190) for more details.

We also asked a panel of experts to consider if it would be possible to limit the rights of short-term shareholders during a takeover bid. The discussion concluded that it would be extremely difficult to introduce this policy measure because of a series of legal and technical issues. It also concluded that the measure would not prevent short-term shareholders influencing a takeover bid. See the note of the discussion on ‘Limiting the rights of short-term shareholders during takeover bids: practical and legal issues’ for more details.