Business Secretary Vince Cable is to call for a comprehensive rethink about how UK companies are run and how they should be bought and sold in future.
He will ask the CBI conference how corporate governance should be reformed without discouraging investment.
Mr Cable will also question the process for the acquisition of other companies.
Meanwhile, the CBI has warned that the UK will need to work hard to maintain its position against rising global competition for business investment.
Vince Cable
In a speech to the Lib Dems last month, Mr Cable spoke of the “murky world of corporate behaviour” which “takes no prisoners and kills competition where it can”.
The business secretary will now ask whether shareholders in one company should be consulted before their board buys another company – a reference to the fact that many Kraft shareholders did not want to buy Cadbury earlier this year.
Another of the 17 questions he will pose is whether British boards too are focused on short-term goals and whether shareholders should rein in company bosses more, especially when it comes to pay.
Mr Cable will also tell the CBI that the best solutions are those which are owned and driven by market participants – especially investors and companies.
Vince Cable
The business group, which starts its annual conference in London on Monday, said the UK needed to cut regulation, and reduce both business and personal taxation. It added that the planning system and infrastructure also needed improving.
The CBI interviewed 121 bosses of the biggest UK firms and large overseas companies operating in Britain.
The survey, which was co-produced by accountancy group Deloitte, said the UK scored highly for its economic stability.
Yet respondents said the US, Canada, China and India were now seen as more attractive countries in which to invest.
Richard Lambert, CBI director general, said: “Having acted fast to tackle the deficit, the government must now focus on how to attract more investment to the UK, if we are to create new jobs and grow the economy.
“The coalition’s efforts to improve the general business climate are viewed favourably, but there is much to do to improve the UK’s competitiveness as a destination for investment.”
Vince Cable
The CBI said that while the UK still performed favourably, it had “lost ground over the past 10 years”.
It added that while the UK still performed strongly in areas such as good labour relations and flexible working practices, these issues were now seen as less important for firms making investment decisions.
Regarding sectors of the economy, the CBI said manufacturing companies were the least likely to invest in the UK, while financial firms and others in the service sector were more likely than average to view the UK in a favourable light.
