(Adds comments from Allen & Overy)
LONDON May 18 Prime Minister Theresa May vowed
to make it harder for foreign companies to take over British
firms and threatened to clamp down on soaring executive pay as
she set out her plans for Britain if her Conservative Party wins
a parliamentary election on June 8.
Below are reactions to her proposals from investment
managers and shareholder groups and lawyers:
MARK FRIEND, HEAD OF THE LONDON ANTITRUST GROUP AT LAW FIRM
ALLEN & OVERY:
"It seems the government is planning to extend the list of
public interest criteria to allow for ministerial intervention
in certain defined circumstances, although the devil will be in
"But a potential concern about broadening the public
interest test is that you may end up with lobbying by special
interest groups, and decisions being made on grounds that are
neither completely transparent nor robust, as was sometimes the
case in the bad old days of the 1980s."
"Also, for so long as the UK remains part of the EU, we will
have limited ability to intervene in deals that fall within the
jurisdiction of Brussels, save on grounds specifically permitted
by the EU Merger Regulation."
RACHEL HAWORTH, POLICY OFFICER AT SHAREACTION, WHICH SEEKS
TO PROMOTE SOCIALLY RESPONSIBLE INVESTMENT:
“While we very much welcome proposed measures to increase
stakeholder involvement in corporate governance, we believe the
shareholder’s role may be the most effective point of
intervention. Company law is still constructed around the
concept of shareholder primacy, and it is shareholders who have
the greatest influence over company behaviour and cultural
"We call upon the new government to widen the focus on
corporate governance and address issues across the wider
investment system. Millions of working people with pension
savings have an ownership stake in the UK economy and their
financial security on retirement depends on responsible
corporate behaviour focused on long-term performance. Better
pension governance with greater transparency would ensure that
institutional investors are holding companies to account.”
ANDREW NINIAN, DIRECTOR OF STEWARDSHIP AND CORPORATE
GOVERNANCE AT THE INVESTMENT ASSOCIATION, WHICH REPRESENTS UK
“We welcome the renewed focus on measures to strengthen the
UK’s corporate governance regime in the long-term interest of
shareholders, their employees and customers."
“We want to see the introduction of an escalation approach,
whereby companies who receive large votes against the pay of
their top team are required to subject the entire pay policy to
another binding vote. We will continue to oppose complex
remuneration structures for senior executives, which are failing
to motivate company bosses to deliver the best long-term returns
to their shareholders. "
"We welcome the proposal to give companies the flexibility
to choose the most appropriate way to represent their workforce
at Board level.”
PAUL LEE, HEAD OF CORPORATE GOVERNANCE AT ABERDEEN ASSET
"Moves to help boards to understand and consider the
interests of workers more fully will assist some to be more
long-term in their thinking. Given that most businesses these
days are people-businesses, it can only be good for long-term
performance for boards to be more active in their consideration
of employee matters. It’s helpful that the government is looking
to be flexible in how this is delivered."
JEROEN BOS, HEAD OF EQUITIES AT NN INVESTMENT PARTNERS:
"From a ‘How sustainable is your business model?’
perspective, which in the end drives the value of a company,
it’s very important that you treat your workers well, and
there’s clear alignment between staff, management and
"I do believe, if you can improve that alignment, that
should be beneficial for companies and the long-term
sustainability of their business model.
“On the proposals, the proof will be in the pudding, and
it’s all about the details."
“Preferably, from an investor perspective, you’d have a more
level playing field in Europe instead of M&A being treated much
differently in France versus the Netherlands versus the UK."
“Consistency is a good thing, but it also needs to make
sense. If we together move in a direction of more protectionism,
that’s probably also not a direction you want to go."
(Reporting by Simon Jessop and Pamela Barbaglia; Editing by
Kevin Liffey and Elaine Hardcastle)