Thursday, 23 June 2011

Vince Cable speech, a few thoughts

First, a bit like his Lib Dem conference speech, when you get into the detail there isn't much new. Essentially the short-termism stuff is booted into next year, whereas whatever action there will be on executive pay - probably tweaking the directors rem reporting regs - comes under the narrative reporting strand of work. That indicates that structural reform, like reconfiguring rem comms or strengthening shareholder rights, may be off the table.

Given that the narrative reporting consultation already asked questions about the DRRR it's not a big shift from what I can see. But it does mean that Vince is going to have to do something pretty special on disclosure to make all the rhetoric look justified. Pay ratio disclosure, plus maybe something on performance, must surely be the minimum now that Ed has advocated the former (which is already in place in the US anyway!).

In terms of appointing John Kay to look at the Market short-termism stuff, if definitely a good appointment, and it gives the initiative a bit of independence. But given that it won't report until 2012, presumably after which the govt will respond before deciding how to move forward, more time will be lost. Why didn't they put the whole review under an independent expert in the first place, a point I think Paul Myners made early on. Will there be enough time to do something?

Finally the section on board diversity looks like just a restatement of policy - we'll keep an eye on progress on Davies.

I think Labour can, and should, push these issues. Primarily because I think this s important territory where we have a good story to tell and where we should continue to pushbthe agenda. But also so that Vince has a reason to not just accept minor tweaks like further disclosure.

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