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About Us

The Shareholder Executive?

The Shareholder Executive was created in September 2003 to improve fundamentally the government's performance as a shareholder in government-owned businesses and to provide a source of corporate finance expertise within government.

Our remit covers 29 businesses, from large well known companies such as the Royal Mail to smaller trading funds like the UK Hydrographic Office. View the full list of the 29 businesses

Our role is to be a proactive, intelligent shareholder, working with government departments and management teams to help government-owned businesses perform better. We advise Ministers and officials on a wide range of shareholder issues including objectives, governance, strategy, performance monitoring, board appointments and remuneration.

We want to create a climate of ownership that, while challenging, is genuinely supportive, and provides the framework for these businesses to be successful.
 

Organisation Structure

Download the Shareholder Executive Organisation Structure (pdf)
 

Our Objectives

The Shareholder Executive's overarching objective is to be an effective shareholder of businesses owned or part-owned by the Government. Its specific objectives are to:

  • Establish individual company targets, including targets aimed at increasing value
  • Maximise dividend return from portfolio businesses where consistent with business objectives
  • Assist departments in maximising HMG's commercial position where it is investing in non-Government owned businesses and projects
  • Establish rigorous governance arrangements for the Nuclear Decommissioning Authority (NDA) and oversee the effectiveness its competition processes.
  • Ensure Royal Mail Group is placed on a stable business footing.

Our Approach

To deliver these objectives, the Shareholder Executive take as a fundamental principle the need for government to act as an engaged and informed shareholder. We use a system based on the private equity model of share ownership, adapted to recognise the longer-term nature of the government's financial interests and the non-commercial policy objectives it sets.

Our approach is based on: a clear governance framework for each company based on best practice; clarity on commercial, policy and customer objectives for each business; management held to account for delivering an agreed strategy that is consistent with Government's objectives; and the raising of skills and professional staffing of shareholder teams.

Resources

The Shareholder Executive's administrative budget for 2007-08 was £9m, and consisted mainly of personnel costs and advisers' fees. This budget was higher than the previous year's budget of £4.6m due to the reclassification of external advisers' fees as administrative rather than programme expenditure, accounting for a transfer of £4.1m. Of the £9m budget, the Shareholder Executive spent £7m; the saving of £2m was accounted for principally by underspending on advisers' fees.

The budget for 2008-09 is £9.3m. The Shareholder Executive continues to look at ways to reduce costs and limit spending. The aim is to ensure that it has adequate headroom to allow for continued expansion of its portfolio and greater flexibility to take on new work from other Government Departments. In particular, the Shareholder Executive continues to utilise its own in-house expertise to advise Government wherever possible and – where the use of external advisers is unavoidable - ensure that the best possible terms are negotiated. It is difficult to quantify the size of any resultant savings but they are significant.

The Shareholder Executive also manages a large programme budget which includes payments to the NDA and Royal Mail, as well as to British Energy and the UKAEA to cover the costs of historic liabilities. The programme budget for 2008-09 is £2.1bn. This compares with the 2007-08 programme spend of £0.5bn, which related solely to Royal Mail and the Post Office network. The increased budget in 2008-09 reflects the transfer of £1.8bn from BERR's Energy Group to the Shareholder Executive to cover the costs relating to the NDA, British Energy and the UKAEA.

As the Shareholder Executive has taken on additional projects and its portfolio has grown, the team has also expanded. In March 2008 there were 48 staff, an increase of four on a year earlier. Eleven of these were external recruits appointed on fixed term contracts (usually one to three years' duration) and a further eight were secondees. The remainder were permanent civil servants. View Shareholder Executive Senior Team pages