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Role and approach

Government-owned businesses make an important contribution to the UK. They help to deliver essential public services, provide advice and support to other parts of government and to the public, and generate value that can be invested in other public services.

The challenges these businesses face now are greater than ever. Some are finding that their traditional customer base and markets are dwindling or becoming less certain. Some are facing increasing competition. For others the goal is to seek new markets for their products and services.

The role of the Shareholder Executive is to work with government departments and management teams to help these businesses perform better. We want to create a climate of ownership that, while challenging, is genuinely supportive and provides the framework for them to be successful.

The Shareholder Executive plays a different role in 29 businesses in its portfolio. It either has an:

Advisory role: Departmental teams are accountable to their ministers and Permanent Secretary for the discharge of the shareholding function. The Shareholder Executive is accountable to each individual departmental shareholding team for the quality of its advice and input.

Executive role: The Shareholder Executive is accountable to the ministers and Permanent Secretary of the shareholding department.

Joint team role: The Shareholder Executive works alongside shareholder teams in the respective departments.
 

Our professional approach draws on four principles: clarity, value, transparency and professionalism.

  • Clarity: because government as shareholder has all too rarely in the past provided businesses with clear and consistent objectives. The Shareholder Executive is working to establish a remit for each business that sets out clear, consistent and durable objectives. These will reconcile commercial and policy objectives and make transparent the financial implications of non-commercial requirements.


  • Value: because government-owned businesses should provide a return on the taxpayer's money that has been invested in them. Our aim is that, within the framework of policy, regulatory and customer parameters set by government, businesses will deliver sustained, positive returns and meet or exceed their cost of capital over time.


  • Transparency: because it is important for management and shareholders to be accountable for their performance against objectives. Greater transparency and accountability should drive improved performance at the individual business level, and hence for the portfolio as a whole.


  • Professionalism: because government should draw on best practice from the private and public sectors, and apply a consistent approach to shareholding across departmental boundaries.