1.  Reconciling public policy with shareholder value objectives can be difficult because the cost of meeting the former can have a negative impact on the latter. Currently, the Executive reports to officials in the Department of Trade and Industry and the Stakeholder Group who have policy interests in the Executive's businesses. The Department is setting up a Board to provide direction and accountability to which the Executive will report. The Board will need to articulate what it expects of the Executive, and how it proposes to assess the Executive's performance.

2.  The Executive lacks a mandatory role as the government's shareholder, but is dependent on the voluntary cooperation of the businesses and their sponsor Departments. There should be a presumption that government businesses come within the Executive's portfolio and any exclusions should be specifically authorised by the Treasury.

3.  The Executive's advice is not being harnessed effectively across government. Transactions which affect departments' ownership interests are continuing to take place without any input from the Executive. The Executive should market its services comprehensively and seek to be more visible across government as a whole.

4.  The Executive's effectiveness in its dealings with businesses is constrained by its limited ability to provide finance. Investment by departments in their public businesses is subject to public spending constraints and competes with other priorities. But the availability of finance for investment can have a major impact on the value of a business. The financing of such investment cases could be assessed more consistently by giving the Executive an explicit responsibility for advising sponsor departments on the investment needs of their businesses.

5.  The target for increasing the value of six of its 27 businesses by £1 billion is not an adequate test of the Executive's effectiveness. One or two large businesses, potentially affected by market conditions, can influence whether the Executive meets its target, regardless of the Executive's underlying performance. Its performance management regime needs to include wider measures that are based on the results of individual businesses, alongside an aggregated portfolio-level target.

6.  The Executive operates within departmental pay and grading limits which may inhibit recruitment of appropriately skilled staff. The quality of the Executive's staff is key to its effectiveness. The Executive needs sufficient pay flexibility to continue to recruit high calibre staff in a market for commercially-related skills.

7.  The Executive has a range of responsibilities for the postal services industry, which extend beyond shareholder value issues. The Executive's current location in the DTI means that, in addition to the shareholding in Royal Mail, it is responsible for DTI policy on the postal market and the Post Office network, and oversight of the market regulator and consumer watchdog. This arrangement could inhibit the Executive from articulating the case for enhancing shareholder value in Royal Mail. The Department should identify options for relieving the Executive of responsibility for Royal Mail policy and oversight of PostWatch and PostComm.

8.  Between 2004 and 2006, the dividends paid have increased from £24.3 million to £45.3 million, while operating profits have risen from £1.1 billion to £3.7 billion. The Executive should set business-level dividend targets, which take into account the risks faced by businesses, the capital invested in them and a credible estimate of future investment needs, so that over time a greater flow of dividends could be returned to the taxpayer.

9.  The Executive does not undertake valuations of all of the businesses in its portfolio. Although it is not cost-effective to conduct valuations of all of its businesses on an annual basis, the Executive should systematically undertake valuations of the businesses in its portfolio every few years and use these to highlight the impact of policy on shareholder value.