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He has also suggested in his report that these higher standards should be extended to other privately owned businesses and family companies.
     
The Walker Report was commissioned by the BVCA, the trade body of the British Private Equity & Venture Capital Association, following widespread criticism by MPs and trade unions of its members' investments. Private equity funds have been accused of secrecy, asset-stripping, job-cutting, endangering firms by borrowing heavily and paying little tax.
     
His recommendations cover both the investment funds and the trade body but he also lists changes to be made at the private companies they invest in, including management buy-outs. These include:

• Producing annual reports within four months of the year-end rather than the current nine months. These reports would have to be available on a corporate website.
• Producing interim statements. These would be published within two months of the half-year ending. There is no proposal for quarterly accounts.
• Details of the directors and senior executives.  
• The appointment of outside – though not necessarily independent – directors.
• A narrative report by the chairman or chief executive stating the company’s values and approach to its staff and role in the wider community.
• A balance sheet with details of debt including the structure and conditions.

The proposals would apply to companies that were previously quoted in the FTSE 250, or which have equity worth £300m, an enterprise value of £500m or 1,000 staff or more. However, launching his report, Walker stated, “The approach developed here may increasingly be seen as at least a benchmark for other large private companies.”
      
Walker published his report as a consultative document, seeking responses by October 2007 with the intention of producing a voluntary code of conduct. Companies and funds would be subject a “comply or explain” regime similar to the corporate governance code for quoted companies.
      
His proposals for the private equity owners include providing details of debt, changes in employment levels at portfolio companies, performance measurements and fee payments. He made no recommendations on tax or disclosure of partners’ pay however. He also called for the BVCA to improve its promotion of the private equity sector.
     
The report was given a poor welcome by the industry’s critics and only a guarded response from the BVCA that commissioned it, however. Wol Kolade, the BVCA chairman, said, “We agree that there needs to be more transparency but there must also be a level playing field between private equity and other private companies.”

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