Financial Services: Shareholder Engagement

Debate between Lord Sassoon and Lord Razzall

Wednesday 19th January 2011 Lords Chamber

[Lord Sassoon]

My Lords, the noble Lord, Lord McFall of Alcluith, ranges over some big questions there. To start with the remuneration issues, the introduction of the new FSA code of disclosure from 1 January will contribute to making shareholders better informed. My right honourable friend the Chancellor has taken note of Sir David Walker’s suggestion that there needs to be further international agreement in this area so the Chancellor has written to his EU counterparts to see what can be done to further drive forward aspects of disclosure. There is certainly a lot of activity going on there. As to some of the bigger questions about “too big to fail” and bond-holders and so on, I look forward to the light that the Independent Commission on Banking will doubtless shed on these important issues and I note that the chairman of the commission is scheduled to be making a speech in the next few days on this topic.

[Lord Razzall]

My Lords, I am sure the Minister is aware that, in hostile takeovers, the result is often determined by hedge funds which have simply acquired or borrowed stock short-term in order to make a short-term profit, irrespective of other interests. Is this an issue that the Government are prepared to discuss with the financial services industry?

[Lord Sassoon]

My Lords, the takeover panel operating independently keeps that issue and all other issues related to the good working of the takeover market under regular review. The department of business consultation, A Long-term Focus on Corporate Britain, which is currently calling for evidence, will be interested to hear what people have to say on that very topic.