EUROPE - The European Commission will welcome recommendations by the Kay Review to abandon mandatory quarterly reporting, the head of ethical investment association UKSIF has suggested.

Discussing the international impact of the UK government-commissioned review of long-term decision making in the equity market, chief executive Penny Shepherd also said the now concluded review was an "asset" the country could offer the rest of the world.

"John Kay's recommendations will be welcomed at the European Commission level, where, for example, where his recommendations on quarterly reporting are in line with what the Commission is already proposing," she said.

Kay was highly critical of quarterly reporting in his final report, noting that quarterly earnings would often be "dominated by random fluctuations - or worse, will be managed to avoid them".

He said that while this criticism did not imply asset managers should be barred from access to "useful" information, the appropriate form and frequency of publications should vary from company to company.

Shepherd said the report should be viewed as an asset, with investors in the US slowly changing their engagement approach as companies became more open to dialogue.

Noting that if there were concerns in the UK, often these could be raised with the company via a phone call, she added that US investors "traditionally had a tendency to file shareholder resolutions", with the resolution acting as the first point of contact.

The review hoped to encourage greater engagement through the creation of an investor forum, on which both domestic and overseas holders of UK equity could open a dialogue and coordinate action.

Kay suggested earlier this week that such an initiative could have aided recent shareholder pay revolts.

Shepherd conceded, however, that the UK's other shareholder engagement guide, the Stewardship Code, was still not universally welcomed overseas.

"The area where there is a debate, and the one area where the UK remains keen to promote, is the 'comply or explain' approach and the merits of this over more prescriptive means as a way to encourage change," she said.

"But the general spirit of the Kay review will be warmly welcomed."