Shining light on a murky regulatory review

first_img by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailNoteabley25 Funny Notes Written By StrangersNoteableyThe Sports DropForgotten College Basketball Stars: Where Are They Now?The Sports DropBetterBe20 Stunning Female AthletesBetterBemoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.comautooverload.comDeclassified Vietnam War Photos The Public Wasn’t Meant To Seeautooverload.comMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesTaco RelishOnly People With An IQ Of 130 Can Name These ItemsTaco Relish Shining light on a murky regulatory review More From Our Partners Mark Eaton, former NBA All-Star, dead at 64nypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgKiller drone ‘hunted down a human target’ without being told tonypost.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.com Tags: NULL KCS-content whatsapp Wednesday 22 September 2010 8:21 pmcenter_img Show Comments ▼ Share WHEN Vince Cable told the Liberal Democrat conference, “I am shining a harsh light into the murky world of corporate behaviour,” that was his cryptic way of announcing to the nation a comprehensive regulatory review. With potentially far-reaching impact, this rather shadowy proposal deserves more light than Cable gave it in his remarks.The detailed announcement says: “We will look at the economic impact of takeovers, shareholder responsibility, corporate incentives and pay – all the factors that can help us build a framework founded on long-term economic logic.” But what does it mean?Some of this is old news – the Takeover Panel has been running its review of M&A rules since the summer – but Cable is by no means just reheating political announcements. His detailed statement makes this plain: “My department is complementing this work with a comprehensive review that will ask fundamental questions about corporate governance and short-termism.”In translation, that seems to indicate that Cable wants the popular outrage against the Cadbury takeover reflected in changes to the rules around shareholder power. Cable goes on to say, “we aim to put responsible shareholders back in the driving seat of the economy”. Responsibility here is redefined solely in his terms, putting Cable in that driving seat: he is supremely confident in his own judgement. Yet his highhanded assumption that shareholders have been irresponsible is as questionable as his belief that the financial crisis can be laid squarely at the feet of “financial gamblers who value a quick buck above all else”.The Cadbury bid may have been a blow for British pride but it was a reflection of problems with Cadbury that had been evident in sluggish performance over much of the past decade. Economic nationalism showed little hope of solving these fundamental weaknesses. The takeover premium was 50 per cent up on Cadbury’s share price the August before, scarcely a derisory offer.It would be less troubling if Cable were a cynic, playing the mystic chords of economic populism only so long as they bring him power. But it seems he really does believe that “shareholders that act like long-term owners” will be better for the economy than those who seek to move capital to its most productive uses.A consultation on Cable’s plan will launch this autumn. Business must be ready to put its case firmly if it is not to find itself carrying a regulatory burden based on questionable assumptions and tabloid pandering. whatsapplast_img