The UK’s biggest institutional investors are set to demand FTSE 100 companies - including the likes of Morrisons, Sainsbury's and Tesco - stop quarterly reporting as part of a radical shake-up of how shareholders interact with their investments.
In an attempt to rebalance the relationship between investors and company boards, aimed at nurturing long-term thinking, the Investment Association (IA) is expected to set out a series of demands designed to get more out of the UK’s largest companies, the Daily Telegraph has reported.
The IA, whose members own approximately one-third of the FTSE 100, will tell boards to move from spending time focused on three-monthly numbers to work on long-term strategy.
The Telegraph reports that the new diktat, one of a string of new measures to be announced, will essentially force companies in the FTSE 350 to comply or explain how quarterly reporting fits into their strategy. The IA will monitor those who fail to do so.
The requirement will be one of 11 actions the group, whose members manage assets worth in excess of £5.5 trillion, is believed to be ready to set out as part of the launch of a landmark report due imminently.
The report is expected to be the most radical reshaping of big shareholders’ relations with the companies they invest in, and comes in the wake of the Kay Review and other studies designed to shift boards away from short-term targets.
Although several big companies - including Unilever and Legal & General - have signalled an end to quarterly reporting, the vast majority of companies in the FTSE 100 continue to publish at least some numbers on a three-monthly basis.
The institutional lobby group will make the demands alongside publication of the document, which is the result of an eight-month project looking at how investors can play their part in boosting the UK’s ailing productivity levels.
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