Access key links:

This site uses cookies to help make it more useful and reliable. Our cookies page explains what they are, which ones we use, and how you can manage or remove them.

The Kay Review of UK Equity Markets and Long-Term Decision Making

Government response to the Kay review

On 22 November 2012, the Government published its response to the Kay Review of UK Equity Markets and Long-Term Decision Making.

Read Ensuring equity markets support long term growth: the government response to the Kay review (PDF, 159 Kb) .

The Government response welcomes the Kay Report, accepting Professor Kay’s analysis and conclusions. It endorses ten principles for equity markets to which market practitioners, Government and regulatory authorities should have regard, and the report’s directions for market participants which follow from these principles.

The Government also commits to:

  • work with relevant regulatory authorities to explore further the Kay Report’s directions for regulatory policy
  • identify to what extent these directions are practical, what changes in the law or in regulation might be therefore be appropriate, and how these can best be delivered.

The response sets out a number of steps the Government are taking to deliver on the Kay Report’s detailed recommendations, including:

  • completing reform of corporate narrative reporting to be higher quality, simpler, more relevant to users and more focussed on forward looking strategy
  • pursuing reforms to the EU Transparency Directive which will remove mandatory quarterly reporting
  • promoting the revised edition of the Stewardship Code which emphasises that stewardship should encompass engagement by investors on company strategy.

Many of the report's recommendations are for market participants, in particular companies and institutional investors. The Government agrees that the necessary changes in culture cannot simply be achieved through regulation, but rather through the development of good practice in the investment chain. The Government is promoting Professor Kay’s 'good practice statements' for company directors, asset managers and asset holders, as the basis for industry-led standards of good practice.

The report’s recommendations, and the good practice statements, aim to deliver:

  • more collective action by institutional shareholders via the establishment of an investors’ forum
  • better disclosure of costs in the investment chain, transparency and fairness around the lending of securities
  • better alignment between pay and long-term performance for company directors and asset managers.

The Government response also commits the Government to publish an update, by summer 2014, setting out what further progress has been achieved by Government and others, to consider Professor Kay’s directions for regulatory policy and to deliver his specific recommendations.

Final report

On 23 July 2012, Professor John Kay published the final report of his independent review to examine investment in UK equity markets and its impact on the long-term performance and governance of UK quoted companies. The Secretary of State for Business, Innovation and Skills, Vince Cable has welcomed the review’s final report, with the following comments:

Professor Kay launched the final report at a speaking event at the RSA on 23 July 2012. The event was chaired by Sir Richard Lambert (former editor of the FT and former Director-General of the CBI). Professor Kay was joined on the panel by his Advisory Board.

Professor Kay gave a short speech where he presented his findings and recommendations, setting out a vision for equity markets that work well for UK companies and savers. This was followed by a Q&A panel session with the audience.

View Professor Kay's speech and presentation slides (PDF, 403 Kb) 

The Review’s final report is available via the following link. [The attached report was updated on 4 September 2012 to amend a small number of discrepancies within its bibliography.]

Final Report of the Kay Review (PDF, 608 Kb) 

Interim report

On 29 February 2012, the review’s interim report was published. The Interim Report summarised the responses to the Review’s initial call for evidence and presented a broad discussion of the issues raised. The comments and proposals discussed in the Interim Report signalled areas of interest for the final report but did not represent its provisional conclusions.

Read the Interim report (PDF, 555 Kb) 

The Review’s interim report asked interested parties with additional evidence relevant to the Review to make a submission through a further call for evidence. This further call for evidence closed on 27 April 2011. Copies of the responses to the further call for evidence are available via the following link:

Kay Review responses to the interim report

Call for evidence

On 15 September 2011, Professor Kay launched the review’s initial call for evidence which built on the previously published terms of reference, and set out a range of issues and questions on which we sought evidence.

A copy of the call for evidence paper is available via the following link.

Kay Review call for evidence paper

This initial call for evidence closed on 18 November 2011. Copies of the responses to the initial call for evidence are available via the following link:

Kay Review responses to initial call for evidence

Professor Kay’s speech, outlining his philosophy and objectives for the review, is available via the following link.

Professor Kay's speech: call for evidence launch

Terms of Reference

The original broad terms of reference for the review, published in June 2011, are available via the following link.

Kay Review Terms of Reference (PDF, 28 Kb) 

Press releases


The Kay Review followed on from the Department’s call for evidence ‘A long-term focus for corporate Britain’ launched in October 2010, which explored issues of economic short-termism in the UK, and a number of broader corporate governance issues surrounding takeovers and executive pay. A summary of responses to this call for evidence was published in March 2011. The responses to the call for evidence found that there was evidence of short-termism in UK equity markets and of some agency problems in the investment chain. It was these findings which prompted the Kay Review. The call for evidence document, the summary of responses and further information can be found at:

A Long-Term Focus for Corporate Britain: A Call for Evidence

The Business Secretary, Vince Cable, commissioned Professor Kay to undertake the Kay Review on 22 June 2011.

In August 2011, Professor Kay appointed three senior city figures to form an Advisory Board for the review:

  • Sir John Rose, former Chief Executive of Rolls-Royce plc
  • James Anderson, Partner and Manager at Baillie Gifford
  • Chris Hitchen, Chief Executive of the Railways Pension Trustee Company, and Chairman of the Pensions Quality Mark.

Contact details

The Corporate Governance Team within BIS may be contacted by e-mail:




 Sign up for email alerts

Minister responsible

Jo Swinson is the minister responsible for this policy area.