Daily Archives: July 27, 2012

Andrew Adonis on John Kay’s review of the UK equity markets and long-term decision-making

John Kay’s review of “long-termism” in UK plc is elegant but short of beef.

The critique enlarged my vocabulary and understanding of recent corporate disasters. “Some of those we interviewed attributed almost magical powers to ‘the market’,” writes Professor Kay.  “Anthropomorphisation of ‘the market’ in phrases such as ‘markets think’ or ‘the view of the market’ is common usage.  It should hardly need saying that the market does not think.”

But the recommendations are underwhelming.

Of the 17 proposals, only four have much by way of substance.

Kay argues convincingly that there are far too many mergers and takeovers as a result of the “financialisation” (another new word to me) of UK plc. So what should be done? Read more