Shareholder Executive reviewed

Summary

The Shareholder Executive was established in 2003 to act as an effective owner of businesses that are owned or part owned by government. It is now an operational group within the Department of Trade and Industry with a portfolio covering 27 businesses and a combined turnover of £21 billion.

This Report 'The Shareholder Executive and Public Sector Businesses’ (HC 409) examines the status and performance of the agency.

The Committee notes that the role of the Executive marries both public and private objectives, setting out to both achieve public policy objectives through the most cost effective means and to provide a satisfactory return on the public money invested through the shareholder value. The Committee states that the Executive has delivered value for the taxpayer by adopting business criteria through a framework that sets out clear priorities for the businesses, operating performance monitoring, and holding management accountable for their delivery.

This Report follows on from a National Audit Office Report 'The Shareholder Executive and Public Sector Businesses’ (HC 255) published in February 2007.

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Law-Making Explained

This is a House of Commons Paper (HC 409 2006-07): it is a Report from the House of Commons Committee of Public Accounts.

Find out more about House of Commons Papers.

How does it affect me?

If you work in a public sector business or are interested in the management of businesses that are owned or part owned by government, this affects you.

The Committee sets out a number of conclusions and recommendations.

These include:

The Department of Trade and Industry is setting up a Board to provide direction and accountability for the Executive
There should be a presumption that all government businesses come within the Executive's portfolio
The Executive should market its services comprehensively and seek to be more visible across government
The Executive should be given an explicit responsibility for advising sponsor departments on the investment needs of their businesses
The performance management of the Executive needs to include wider measures that are based on the results of individual businesses
The Executive needs sufficient pay flexibility to continue to recruit high-calibre staff
The Executive's responsibility for the postal services industry extends beyond shareholder value issues and the Committee believes the Department should identify options for relieving the Executive of responsibility for Royal Mail policy
The Executive should set business-level dividend targets which take into account the risks faced by the business and that it should systematically undertake valuations of the businesses in its portfolio.