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CBI responds to Cox Review on short-termism

The CBI responded to a review by Sir George Cox - Overcoming short-termism within British business.

Matthew Fell, CBI Director for Competitive Markets, said:

“There is a need to encourage a more long-term focus from investors and the report’s recognition that industrial strategy should be a cornerstone of government policy is welcome.”

On company reporting, he said:

The Review rightly identifies the importance of communicating the longer-term elements of companies’ strategies, which many businesses are already doing through their annual report.”

On executive pay:

“While it may be appropriate for some companies to link pay packages to longer-term horizons, it is the responsibility of boards and shareholders to decide on this. Shareholders rightly have the power to hold boards to account by voting on pay policy and implementation and on board member appointment.”

On voting in takeovers:

“The Review rightly advises against linking voting rights to the length of shareholding. Changing the law on voting in takeovers would be a big step and would need to be fully assessed, as it could have unintended consequences for shareholder value.”

On employee share ownership:

“Proposals to extend the existing employee share ownership scheme look sensible, but this must be for individual companies to decide on a voluntary basis.”

On measures to support for small and medium-sized businesses:

“We support the call for the Government to abolish stamp duty on shares in AIM-listed companies to help unlock long-term ‘patient capital’ through the public market.”

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