BusinessCompany NewsKelly calls for shareholder activism

Kelly calls for shareholder activism

The raft of legislation introduced by the government to improve corporate governance practice within the UK needs active shareholder involvement to make it work, according to Ruth Kelly, financial secretary to the Treasury.

Link: Kelly rejects Higgs criticism as ‘disturbing complacency’

Speaking at the National Association of Pension Fund’s corporate governance conference in London yesterday, Kelly outlined the measures already put in place, such as the combined code on corporate governance, as well as pending legislation including the companies bill currently going through parliament.

However she warned that shareholder activism was central to all these issues.

‘Effective implementation of legislative and non-legislative measures that have been introduced require the active involvement of shareholders to make them work.

‘Changes in the combined code strengthens the board to act independently but shareholders need to challenge the board.’

The combined code contains essential changes to the make up of non-executive directors and company audit committees including the requirement thatat least one non-exec should have a financial qualificationor experience.

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