Equiniti Magazine Winter 2011

magazine > winter 2011 > Issue 05

INSIGHT + INFORMATION + LEADERSHIp

uk economy

‘‘ We have to reform’’ Lord Digby Jones on education, skills, pensions and exports

inside>

company law Is the legislation keeping up? page 18

ESP portal Shareholder services revolutionised page 24

Foreword words from the front

flashback

Looking back – and forward As we draw to the end of yet another year, there is a natural reflex to look back over the last 12 months and take stock. And for us at Equiniti, I believe there’s much to be satisfied with.

John Parker Managing Director, Equiniti

Our clients have shown us tremendous loyalty through extending their contracts and I’m looking ahead to 2011 with genuine excitement. There are great things happening within the Equiniti group, and you can read more about our BPO offering (p16) and Xafinity’s award winning pension solutions (p30).

Client survey work that we carried out in 2010 also shows very positive results in terms of client satisfaction (see page 14). Undoubtedly a large factor in this progress is the investment we have made in our employees – a point that HR Director Clancy Murphy highlights in her interview on page 4. However, the best way to find out what customers want is to work with them, so a big 'thank you' to everyone who has responded – all of your comments are very useful to us, driving our commitment to continuous improvement.

We hope you enjoy this issue and wish all our clients all the best for 2011.

July As Belgium takes over the presidency of the EU from Spain, the EU releases a list of 91 European banks to be subjected to ‘stress tests’.

August

John Parker Please contact me at: contactus@equiniti.com

2 > Equiniti Magazine | winter 2011

Australia goes to the polls, and the German economy grows by 2.2% – its fastest growth in a quarter for more than 20 years.

contents picture: Sipa Press/Rex Features

inside this issue

MAGAZINE > WINTER 2011 > ISSUE 05

INSIGHT + INFORMATION + LEADERSHIP

UK ECONOMY

‘‘We have to reform’’ Lord Digby Jones on education, skills, pensions and exports

INSIDE>

COMPANY LAW Is the legislation keeping up? PAGE 18

Equiniti magazine number 05 Cover photograph

by Paul Raeburn

ESP PORTAL Shareholder services revolutionised PAGE 24

regulars 4 First Person

Clancy Murphy on people power

7 Postcard from Westminster

Lord MacGregor shares his perspective on the UK economy

Workers in Marseille protest against proposed pension reforms

28 My Equiniti

Aaron Grey explains what makes Relationship Managers tick

31 Question Time

Our own Peter Swabey takes the hot seat

September Tens of thousands of workers across Europe join strikes against their governments’ austerity measures, and Ed Miliband wins the Labour leadership contest.

October Chancellor of the Exchequer George Osborne outlines a Comprehensive Spending Review, detailing £81bn of public spending cuts.

November Barack Obama suffers a setback with strong Republican gains in the US midterm elections, as the Irish debt crisis dominates European news.

Features 8 Digby Jones

The peer and former head of the CBI talks business and politics

11 Corporate crime

What are the implications of the new Bribery Act?

14 Client feedback

December As the UK shudders under a blanket of festive snow, the fallout from the Wikileaks controversy looks set to test diplomatic ties well into the New Year.

An overview of our latest client survey

16 BPO

18 Company law Fit for purpose?

22 AGM planning Six steps to getting it right

24 ESP Portal

A revolution in shareholder services

26 CoSec Profile David Parkes of BAE Systems

The low-down on outsourcing

Equiniti Magazine is published on behalf of Equiniti by White Light Media.

Editorial Director: Fraser Allen Creative Director: Eric Campbell Designers: Jenny Proudfoot, Adam Wilson, Islay Brown www.whitelightmedia.co.uk Members of the APA & PPA

Equiniti Magazine has been printed on environmentally responsible paper, manufactured using 50% recycled waste and 50% fibre from well managed forests, controlled sources and recycled wood.

www.equiniti.com > 3

1st

person: Clancy Murphy

You previously worked at Deloitte – what attracted you to Equiniti?

Deloitte has a huge resourcing requirement, recruiting up to 2,500 new hires a year, including graduates.

Five years ago, I was part of a team that set up their in-house resourcing centre.

Having achieved that, I moved on to head Commercial HR, looking after the numbers behind the whole HR effort.

I was enjoying what I was doing, but I wanted to try something different and move into a wider role. Equiniti is such an exciting organisation, and it was very new when I joined. It has this fabulous heritage in Lloyds Banking Group, yet it was very much a ‘greenfield site’ in terms of developing its people processes for the new business. I felt a great sense of excitement about using the skills and knowledge I had gained to do something different.

HR Director Clancy Murphy explains why Equiniti’s greatest asset is its people

Was there any sense when you started that the skills people had were perhaps being undervalued?

I don’t think that was the case. There was a strong recognition in Equiniti that our people are significant assets, and that the phenomenal knowledge they bring is key to our success. We have people with a real depth of experience, particularly in the registration market, but now also within the other parts of the business. However, when you come out of a substantial parent organisation like Lloyds Banking Group and become a much smaller stand-alone enterprise, the structures and processes in place for people need to be different. We needed to regain the focus on people, and that was everything from building the competencies and behavioural indicators, to designing performance management systems, and introducing training – all those things that you would expect in a mature organisation. The time was right when I joined to start to build these for Equiniti, and we are seeing real progress now in these areas.

What are the key achievements you would highlight?

We have people with a real depth of experience, particularly in the registration market, and now also within the other parts of the business 4 > Equiniti Magazine | winter 2011

We started by looking at the behaviours that we thought were right for Equiniti – some already existing and some aspirational – saying ‘this is where we are at the moment, and this is where we want to be in the future’. From there we developed a series of competencies into a performance management tool. That was really the starting point of building a people framework.

There was also some back office work we needed to do, such as improving our HR technology platform and payroll process, and relaunching our intranet, Connect +. Both these things helped to enhance our ability to communicate with all Equiniti people, as well as to showcase our internal capability. We chose

Perito as our HR technology platform, developed by Equiniti ICS, who now also manage our payroll processing. Connect+ was developed by our Web Enablement team in-house.

With these things in place, we could look at how we help our people to develop. Our training academy has been a huge success story – it has a very strong focus on customer service, which is what we are all about as a business, and all new starters into Customer Service roles go through this training as part of their induction. Alongside that, we looked at how we reward people for their efforts.

This March we launched flexible benefits for all our people, again using our own in-house teams. We did this because it’s the right thing to do, and because it’s a great way to showcase what we can do as an organisation – we have a great flexible benefits team in-house, who primarily provide services to our customers. I’m keen to explore how we can deliver to our people what we deliver to our customers, and in doing so to develop our own capabilities. It is a great way to expand our current offerings, and good for our people too.

Are some of the things you’re doing, such as developing people, being overlooked in other organisations as a result of the economic crisis?

You read headlines all the time on pay freezes and pay cuts, and naturally conclude that for some organisations it may be challenging to still invest in benefits and training. I feel really strongly that in this economy it’s really important to do everything we can to keep our people motivated and to treat them in the right way. It might not be possible to give the type of pay rises we were seeing five or ten years ago, but there’s a whole raft of other things you can do to make the experience of being an employee a really positive one – for example,

five facts about clancy

1

I love books – so much so that I set up a book club in the village I live in in Hampshire. My favourite book is The Time Traveller’s Wife, by Audrey Niffeneger. It’s beautiful and quite sad - I enjoyed the contrasts in it.

2 3 4 5

My children both play in the local school football team, so my Saturdays are most often spent serving tea, coffee and cakes to the team and supporters.

My pet hate is a lack of manners – especially when I am travelling. Common courtesies cost nothing and I find a lack of them incredibly irritating.

When I left school I didn’t have any ideas about a career in business.

I love baking and cake decorating, and wanted to be a pastry chef.

My favourite place in the world is a little island called Ile-de-Re, off the French Atlantic coast. It’s very beautiful and quiet, with fabulous beaches and really great wine. We have been going every summer for the past seven or eight years. It’s not exotic but it’s a perfect hideaway. www.equiniti.com > 5

1st

person: clancy murphy

making sure people continue to develop and grow with us as an organisation.

Equiniti has matured since coming out of Lloyds Banking Group, and if we don’t invest in developing our people we won’t continue to grow. For the same reason, we launched flexible benefits in the middle of a recession. When people look at why they come to work, they say ‘it’s about how I get recognised and about how I pay the mortgage, but it’s also about my lifestyle – I want to choose my own benefits, be it childcare vouchers, or adding more to my pension’. Providing that flexibility is a very important part of engaging our people, and we will continue to look at other ways that we can continue to engage with all our staff. I am very proud of the events we have run in the past year to raise money for charity, for example. Starting with Children in Need 2009, we have now run a small number of charity days across the group, which bring people together for a common cause, but also let us all have some fun. It's great when that happens, and a really positive way to build engagement. We will be doing more of it in the future.

Some people may not expect that from a company owned by a private equity house?

The initiatives we have in place are all about focusing on the overall health of the business. We’ve been very public about showcasing what we’re doing, because that helps the business in the future. We’re in the middle of our journey – we’ve done a lot of work laying the foundation stones in the last 18 months, but we certainly haven’t finished. We will continue to evolve.

How would you describe the culture at Equiniti?

It’s a really strong blend of cultures, combining the Lloyds Banking Group heritage with a new feel, in areas such as the business process outsourcing (BPO) market and HR services.

We aspire to be professional, forwardthinking, ambitious and vibrant – a company that moves people forward.

How we go about developing that, again, is part of the journey, but it has a lot to do with communication. From the leadership team down, communication is very important. The director group 6 > Equiniti Magazine | winter 2011

communicates through a variety of media – blogs, town hall updates, face-to-face communications and monthly briefings.

We’re developing our culture of openness, where everyone understands the vision and their place in it. We recently ran a staff survey across the group for the first time, and I'm looking forward to seeing how people think we are doing in this area in particular.

What do you think makes a good leader?

The director group communicates through a variety of media – blogs, town hall updates, face-to-face communications and monthly briefings

Strong leaders lead by example and get involved, and they’re very passionate and clear about what the vision is. They communicate that vision every time they meet with people – if you cut them in the middle it’s all the way through them – yet they must also have an ability to understand people. If you translate that to Equiniti, good leaders at Equiniti inspire people to go above and beyond the norm and will demonstrate this in their own behaviour. They are very much a part of the team effort, leading from the front.

In addition, they are engaging and inspiring as managers.

Who inspires you personally in business circles?

I was inspired hugely in my career by someone I worked for a number of years ago. He recruited me into my first role as a new graduate and I stayed working with him for about ten years. He really understood where the business was going and kept everyone focused, but he also had huge empathy for people.

He knew that everyone is different, that everybody’s contribution was valid, and made his team feel really valued. He set very high standards and you did not want to disappoint him.

The management team at Equiniti are also a very inspirational group of people.

Between them they have the ability to dissect the world we’re working in and make it understandable. Working together, they guide the business positively and with a huge amount of energy. I learn from my colleagues every day.

Finally, my children also inspire me.

They watch the world through different eyes, and have a different perspective.

They often see things which I see as complex as very simple – its refreshing, and they are very important in my life.

Lord MacGregor shares an insider view of the workings of the Lords Economic Affairs Committee with Victoria Masterson

as chair of the House of Lords Economic Affairs Committee, Lord MacGregor of Pulham Market draws on nine years of experience in the Cabinets of Margaret Thatcher and John Major, having served as Chief Secretary to the Treasury, as well as Minister of Agriculture, and Education and Transport Secretaries.

“I was always heavily involved in everything relating to economic issues during my 25 years in the Commons,” explains the Conservative peer.

“I had the task of getting public finances under better control in the mid-1980's, but the challenge of getting spending and debt levels down now is so much greater.”

A member of the Inner Magic Circle who still performs for charity, Lord MacGregor would often be asked whether he could magic up a few thousand pounds to help with public finances.

“Unfortunately the real answer is that it all comes from the taxpayer,” he says. “From my own

LORD MACGREGOR BORN: 14 February 1937, Glasgow EDUCATION: St Andrews University (MA Economics and History); Kings College London (LLB) FAMILY: Married to Jean, three children PARENTS: GP and housewife FAVOURITE BOOK: Politics in the Age of Peel by Norman Gash

personal point of view, I’ve been simply horrified by the way government spending and borrowing has let rip since 2000. Lax lending practices by some banks and financial institutions also led to unparalleled growth in personal borrowing.”

Recent inquiries by the Lords Committee have covered banking regulation, the economic impact of net migration, and the first major investigation into the Private Finance Initiative. And currently it is examining the domination of the audit market by the ‘Big Four’ accountancy firms - including whether they had a role in the banking crisis.

“Why were so many of the banks given a clean bill of health from auditors shortly before they collapsed?” he asks. “Should they have spotted this? Was the governance in banks strong enough, and should audit committees look at wider issues than just the fair and accurate reporting of accounts? For example, whether the company’s strategy is well-based?”

The committee has heard “very substantial agreement” that competition and choice is threatened in the current market – many companies, for example, have not tendered their audit contract for decades. Should the Big Four become the Big Three, Lord MacGregor warns of a potential monopoly with “really serious consequences” for business.

“You might think that this is a somewhat esoteric, dry area for professional accountants,” he says. “But we’ve been flooded with written and oral evidence from all sorts of people, including the Institute of Chartered Accountants in Australia, whose representatives had to be up at 4am to do a teleconference with us.”

The real challenge will be producing recommendations that achieve more than those already recommended by the Financial Reporting Council. In this respect, the Lords Economic Affairs Committee has experience on its side, with past and present members including several Treasury ministers and ex-Chancellors.

During his own stint in Thatcher’s cabinet, Lord MacGregor gained the reputation of being a ‘safe pair of hands’, negotiating issues from BSE to the privatisation of British Rail. “That’s the hallmark of the Economic Affairs Committee,” he concludes.

“Everyone on it has strong practical experience.”

picture: UPPA/Photoshot

Postcard from Westminster

lord macgregor

www.equiniti.com > 7

interview digby jones

Never slow to voice his opinion, former government minister and CBI chief Digby Jones offers his take on the current state of UK plc. Liz Barclay asks the questions Digby Jones was born into business, the son of corner shop owners in Alvechurch, Birmingham. It is an upbringing that the 55-year-old life peer believes gave him a hands-on education in the principles of business and the value of hard work.

“My parents set the example of hard work and strong parenting, and I learned the importance of customer service, and stock, of buying at one price and selling at a higher price. It’s ingrained,” he says.

“One day a customer asked for 2lbs of potatoes. One big potato took it over the weight but I gave her the lot for the same price. My father said ‘you’ve just given away my profit’. At eight years old it was an incredible lesson in business.”

When a Tesco supermarket opened nearby, the Jones shop was forced to close, and Jones senior retrained, studying for a degree in social sciences and supporting his family with his grant money. His degree eventually took him into the probation service. “The pay wasn’t good but the pension was brilliant,” Digby comments. “He invested in higher education and reaped the reward.”

Speaking to Digby, now Lord Jones of Birmingham, it is clear that he is extremely grateful to his parents for his own education. He loved school, he says, and was accepted to read law at University College London. However, though immensely proud, his parents couldn’t afford to fund him, and he was unable to get a grant from Birmingham Council, who declared that study in London was too expensive. Not to be 8 > Equiniti Magazine | winter 2011

“ I learn something new every day” :: From local shop to the House of Lords the rise of The Lord Jones of Birmingham

1955

Born 28 October, in Alvechurch, Birmingham, “a spanner’s throw” from the Austin car factory

1966–1974

Read Law at University College London, after securing a university cadetship from the Royal Navy

1980

Enjoyed a 20-year career at the Edge and Ellison law firm in Birmingham, before leaving, aged 42, to become Director General of the CBI from 2000–2006

{

2005

Knighted for services to Business

2007

Approached by the Prime Minster Gordon Brown in June to become a Minister of State for Trade, as part of a government “of all talents”. Created life peer in the following month

2008

For the former head of the CBI, first lessons in business were learnt in his parents' shop

Resigned from government in October, and appointed a UK Business Ambassador for UK Trade and Investment

}

deterred, he applied for and secured a university cadetship with the Royal Navy, training as a Royal Navy Officer in Dartmouth and serving in Hong Kong, the Mediterranean, and the North Sea, while studying law during term-time.

When he finished, he was faced with signing on with the Navy for 16 years or repaying his university fees. He chose to pay £2,094.95 over five years to buy himself out.

Today’s Lord Jones is ambivalent about graduates who complain about leaving university in debt.

“We have to reform the way we pay for university. Various component parts of society should pay for university education. The taxpayer should, because we’re investing in the UK’s future.

Business should, because graduates will enhance their bottom line. And graduates should pay too. 40 years ago I had to pay the Royal Navy back – it’s nothing new.”

After graduation followed a 20-year career at Edge and Ellison law practice in Birmingham, where he was the youngest senior partner. He loved his time there and his colleagues, in particular his boss, John Wardle, who he describes as “almost Churchillian” and “inspirational”, but left when he was 42, after being headhunted for the position of Director General of the CBI. The rest, as they say, is history. Digby Jones was catapulted to the national stage and became a household name. And while it would be fair to say that not everybody appreciated his new approach, there can be no doubt that he changed the organisation. “When I arrived, the CBI was riven by debate on the euro. Blair was happy to see a lobbying organisation tearing itself apart. I simply took the euro off the agenda,” he explains. “It caused a huge furore, but our job was to fight on skills, training, tax, jobs, not be a weather vane for the Government. We had to concentrate on giving the Government a bloody nose if it wasn’t helping business, and praise if it was.”

Membership increased, but Lord Jones believes his biggest achievement was in opening up offices abroad. “Some big businesses said the CBI was no longer relevant to them because they were doing a lot of business overseas. I said ‘Give me another year’. I opened offices in Brussels, Beijing, Washington, Delhi,” he says. www.equiniti.com > 9

“I believe passionately in globalisation.

I went to 70 different countries. I’m proud of the internationalisation of the organisation.”

In 2007, Gordon Brown asked Lord Jones to join the Government as Minister of State for Trade. “I told him ‘I’ll do it for my country, I’ll go in 18 months time, but I won’t join the party – or the other lot either. My constituency is business’. He said ‘the Labour party won’t like that much’ and they didn’t,” Lord Jones admits. “I did the job differently.

I made 45 business visits in 15 months to stimulate overseas trade and inward investment into Britain.” Not everyone was impressed. “Was I a success?

Commissions and embassies thought so.

The PM thought so. But as a minister?

Maybe not,” he admits. “I wasn’t a successful minister, but I was successful at doing the job.”

So, with the experience gained from an impressive range of non-executive roles and company chairmanships, what does Lord Jones see as the most important challenge currently facing the UK? “Skills,” he replies emphatically. “5 billion people of 6.5 billion on this planet don’t get 11 years’ full-time, free education. We do, but 20% of the adult population can’t read to the level of an 11-year-old. One in three can’t add up two three-figure numbers. Compete with China? Don’t make me laugh. The average kid shouldn’t be allowed to leave school until they can read, write and use a computer. We’re at five to midnight. The only way is to tool up with our skills.”

Does he believe the private sector can make up for the impending cuts in public sector jobs? Lord Jones again believes that improving skills is key. “If we let unskilled people go and don’t retrain them – no. But if we train them then the private sector can take them on and grow,” he says. “You don’t have unskilled people in the private sector any more. The NHS is the biggest employer of unskilled people, then local authorities. Training will have to come from employers – they have to step up to the plate. But government will have to give tax breaks.”

True to his roots, for all his involvement with big business, small firms remain very close to Lord Jones’s heart. “The future of this country is small 10 > Equiniti Magazine | winter 2011

Picture: ODD ANDERSEN/AFP/Getty Images

interview digby jones

Gordon Brown asked Digby to become Minister of State for Trade in 2007

businesses. More are being set up than we’re losing, but they’re not borrowing, nor creating jobs,” he says. “In the US, there’s growth but it’s a jobless recovery, and it’s the same here. SMEs are waiting to see if the recovery is sustainable, and they’re working harder themselves. They won’t go bust if we double dip, but we need confidence and faith.”

His advice to SMEs? “Get on the page of someone who exports. We haven’t got a big enough market in the UK; you won’t make enough to pay for that extra person without exports.”

What about public sector pensions?

“The way I see it, the pay in public sector

has come up to private sector levels and that’s great. But the public sector can’t have the same pay as everybody else and a different pension to everybody else. We have to reform public sector pensions.”

It is, he admits, a Herculean task.

Lord Jones's interests go beyond business, however. An avid Aston Villa supporter, he believes the club would have finished sixth in the Premier League again this season if former manager Martin O’Neill had stayed on. Nevertheless, he is confident of a top-half finish. And as a Non-Executive Director of Leicester Tigers Rugby plc, he believes they will win the championship again, although he also believes the salary cap for English clubs presents a serious handicap as regards the club’s European ambitions.

And as for his own career? Although he enjoyed his time in the law, he cites not leaving Edge and Ellison three years earlier as a major regret, in spite of his subsequent success. So where would he be now if he had left then, and not been headhunted by the CBI? “Who knows? But I love being plural,” he says. “I have good clients, a lot of public speaking, media, and charity work.

I do some mentoring and coaching.

I’m earning a bit and putting a bit back.

At 55, I learn something new every day, and love it.”

:: From the forces to fame and fortune

entrepreneurs who've served Trevor Baylis

Famous for his revolutionary wind-up radio, inspired by the HIV and AIDS pandemic in Africa, the London-born inventor served as a physical training instructor in the British Army, before going on to become,

amongst other things, a stuntman and professional swimmer. He now runs a company dedicated to helping inventors.

during WWII. After making a fortune, he then went on to lose it, being declared bankrupt in 1969.

John Bloom

Now a household name, thanks to his philanthropic projects and starring role in TV’s Dragons’ Den, the 61-year-old entrepreneur signed up for the Royal Navy aged just 15. He went on to found a series of nursing homes and health clubs.

A millionaire tycoon who made a fortune from doorto-door sales of washing machines in the 1950s and 1960s, Bloom enlisted in the RAF as a teenager, and later served at Bletchley Park, the UK’s main decryption centre

Duncan Bannatyne

feature corporate crime

Where illegal and unethical activity may once have been swept under the figurative carpet, recent legislative developments, including the new Bribery Act, demand that companies take a proactive stance against corporate criminality

See no evil hear no evil speak no evil?

www.equiniti.com > 11

feature corporate crime

There was a time when pleading ignorance in matters of corporate crime might have been enough to avoid censure.

Yet with the increased scrutiny of boards and new regulations on corporate governance, as well as changes to legislation on money laundering, corruption and fraud, the onus is increasingly on companies to take active measures to pre-empt and prevent illegal behaviour. So what are the implications for business, and what can they do to protect themselves?

The most recent development, and one which has gained considerable coverage in the press, is the Bribery Act 2010.

Due to come into force in April 2011, the act marks a major break from earlier legislation, with companies now running the risk of prosecution even if the board is unaware of any wrongdoing.

“The main change that this Act brings in is that companies will be liable for failing to prevent bribery,” confirms Charlie Monteith, Head of Assurance, and policy lead on the Bribery Act at the Serious Fraud Office (SFO). “That means that all companies must now take proactive measures and put into place systems and controls to reduce as much as possible the likelihood of any inappropriate incentives or bribes.

Businesses can no longer turn a blind eye – they will be liable for failing to prevent bribery, even if they didn’t know about it.”

Wider net, smaller holes

One element that will be key in companies’ bribery prevention plans is the assessment and addressing of risk areas – with international business a particular focus. “The Ministry of Justice’s printed consultation guidance contains six main principles that help companies to design adequate procedures to prevent bribery,” Charlie explains.

“The first among these is to riskassess all factors concerning where you do your business.

And the main risk in bribery is likely to lie in intermediaries employed overseas, working under foreign rules and customs, to get business done there on your behalf.”

12 > Equiniti Magazine | winter 2011

To address this issue, the new legislation will, for the first time, cover offences committed anywhere in the world. The change coincides with the development of an intelligence agency within the SFO, which will carry out global networking and share intelligence with enforcement colleagues in Europe and America. In short, not only are the holes of the net finer, but it is being cast wider than ever before.

“Imagine a Russian company, that wasn’t registered in the UK but had an office in London, had a French employee who worked in South America, and never visited the UK. If that employee were to bribe a visiting Korean dignitary, whilst performing a service for the Russian company, the Russian company would then be liable under UK law, for failing to prevent the bribe – even if they knew nothing about it – because they carry on their business in London,” Charlie explains. “The same is true for UK companies. ­If they employ anyone, including subcontractors, to perform services on their behalf anywhere in the world, the company could be liable for failing to prevent a bribe by whoever performs those services.”

The Act also captures Joint Venture (JV) partners. For example, if a Russian company that does not carry out business in the UK is tied into a JV with a British company, any bribe by an individual performing services for the Russian company in connection with the JV would also be deemed to be services provided to the British company, who would be liable for failing to prevent it.

Under the terms of the new act, the only corporate defence for bribery will be to have ‘adequate procedures’ to prevent it, and a number of measures will therefore need to be introduced and embedded within business practice.

These include risk assessment and mitigation; a ‘top-down’ statement of policy from the Board; due diligence on the part of all employees and subcontractors; a comprehensive code of conduct; staff training to ensure awareness of anti-bribery provisions;

A global net: the Bribery Act 2010 will be international in scope

and preventative procedures, including effective and robust monitoring and evaluation. “These should be core parts of compliance and good governance, along with anti-fraud and anti-money laundering,” Charlie adds.

A ‘sea change’

Money laundering, in fact, is another area in which companies are now expected to be proactive in preventing, as RBS Group discovered earlier in the year.

Deemed by the FSA to have failed to adequately screen customers against the Treasury’s financial sanctions list – which aims to freeze the assets and prevent the operation of criminal and terrorist organisations – the banking group was handed a £5.6m fine in August 2010, the largest ever levied by the regulator for a financial crime failing.

“Money laundering regulations state that firms must have systems and

For further guidance or clarification on the Bribery Act 2010, please email Charlie Monteith at Charlie.Monteith@sfo.gsi.gov.uk

“In the old days, companies could wait for the enforcement agency to knock on the door. Now it’s seen as a two-way process”

controls in place to stop, or prevent as much as possible, criminals processing the proceeds from crime. So firms could be breaking the law simply by not having the systems and controls in place to prevent it,” confirms the FSA’s Sarah Bailey, who adds that money laundering, along with mortgage fraud, is one of the regulator’s current top priorities for financial crime.

Indeed, while the Bribery Act is new in its scope, its spirit of scrutiny, and the shift in expectations regarding the perceived liability of companies when it comes to corporate crime, is part of an evolution that Charlie Monteith feels has been in process for over a decade.

“The shift from passive to active responsibility has been coming for the past ten years. In the past, corporates didn’t have to worry too much

about the consequences of not policing themselves and, in fact, it was only done to a limited degree. Now the expectation is that they’re going to have to conduct that policing process far more vigorously than they ever have before,” he says.

“In the old days, they could wait for the enforcement agency to knock on the door.

Now it’s seen as a two-way process.”

The reasons for the change, Charlie argues, are complex and have been gaining in momentum: an increase in corruption levels associated with development aid, organised crime increases, and high-profile terrorist attacks contributed to the Proceeds of Crime Act 2002, which enabled civil recovery of the proceeds of crime, and meant the authorities no longer needed to identify specific crimes to confiscate funds; new, tighter money laundering regulations followed;

after this came the Fraud Act 2006; and, three and a half years later, the Bribery Act 2010 was announced.

So does Charlie feel more will be on the way? “There may be an increase in corporate criminal liability for failing to prevent fraud, but I don’t think there will be any new offences legislation on the immediate horizon,” he says. “The next step will be to assess how effective the Bribery Act is, and the SFO is very keen to work with companies on this. In fact, we are very much engaging with businesses in dialogue, and working with companies – whereas before we might have been seen as working against them.

That’s a big sea change for us, and for them as well. They can come to us for help and advice.”

That advice could be essential, with many companies arguably still unsure as to the risks they run and what they need to do to protect themselves, and with considerable debate in the press about the grey area of corporate hospitality. To help ease doubts, more guidance on this issue is due to be published in January 2011.

However, Charlie says that the key is common sense and good judgement.

“Assess and manage high risk areas – such as the use of foreign agents, in foreign countries acting under foreign rules – and provided that what is offered is reasonable, proportionate and done in good faith, there should be no triggering of bribery for hospitality, PR work, and reasonable expenses provision,” he says.

“The key question is whether a company intends to influence someone’s decisionmaking through what is given to them.

So in the vast majority of cases, providing an official with a bed for the night or a meal for example, would not meet that criterion.” www.equiniti.com > 13

feature quality assurance

hitting the bullseye Client surveys over the course of 2010 show that Equiniti is scoring highly in the market place for the quality of its services

Feedback from our clients over the past 12 months shows a surge in satisfaction scores as our renewed investment in technology and people makes a big impact. As well as industry research such as the annual Capital Analytics survey (the results of which can be seen at www. capitalanalytics.co.uk/surveys.html), all the signs are that Equiniti is achieving exceptional service levels.

In our last survey of FTSE350 clients, in November, we contacted 132 single client contacts, attracting a response from 54 clients (43%). Scoring was based on a scale of one to five ('one' being very 14 > Equiniti Magazine | winter 2011

dissatisfied and 'five' being very satisfied).

89% of respondents provided a score of four or five for the quality of 'the overall service we provide for you'.

This shows the significant strides that Equiniti has taken in the past 12 months. The equivalent figures for March 2010 and December 2009 were 78% and 53% respectively.

The service provided by our relationship managers also scored very highly, with 94% of clients saying they are either satisfied or very satisfied – again, an advance on previous scores “We’ve put in a lot of hard work across the whole of our business, and

we are very pleased with these greatly improved results,” says Managing Director John Parker. “There has been an increase in the average score across all categories. In seven of the ten areas, there was an increase in the number of fives received and there have also been several areas which have seen an increase in the number of fours scored.

"Nevertheless, we take our clients’ feedback very seriously, and we are well aware that there are still areas where we can do even more. We are therefore looking to continue driving through a number of initiatives that we hope will further raise the standard of the services we provide.”

{

In June 2010, 99% of clients said that our quality of service had been maintained or improved

Another area in which Equiniti has received a resounding endorsement is the customer contact centre – reflecting a year of sustained hard work behind the scenes to raise standards. Approval ratings for the company knowledge of contact centre employees reached their highest ever level this year.

“Improving our contact centre has been one of our priorities this year, and we’ve put a lot of work into both improving the systems we have in place, and enhancing the calibre and training of our team,” says John.

“We’ve implemented a training academy that ensures all staff are highly skilled and that we have a full-time, permanent team, dedicated to a career and progression within the business. That investment in our employees has resulted in genuine improvements that we have been able to pass onto our clients and their shareholders.

“We also have a new Director in the contact centre, which has now achieved Contact Centre Accreditation – an independent, global recognition of robust and efficient processes and systems. So the much improved results in terms of client feedback are very welcome news, and a testament to the efforts and hard work of our management and contact centre teams.”

A continuing partnership

Flying colours for AGMs

One of the highest scoring sections of the survey was for Equiniti's management of AGMs, with 26% of respondents declaring themselves satisfied and 61% very satisfied.

“We are very pleased with our performance with regard to AGMs, because we do feel that it is a highpriority area for our clients,” says John. “We are also getting very positive feedback across the whole range of our services. One of the reasons for this is that our Sirius system is now fully embedded, and this has consequently streamlined all our processes.”

In the effort to improve yet further, John explains that the group’s close collaboration with clients will be centre stage.

“We believe that our clients share our belief that we’ve been listening to their views, and making real progress. But we also know that there’s more to be done, and we will continue to consult our clients, and work in partnership with them, to better understand what they want and need,” John says.

“The surveys that we carry out on a regular basis are very useful in this context – and the results drive our continuous improvement programme. This process has highlighted key business areas – such as dividends, client communications and the proactive nature of our relationship managers – where client feedback is informing us how we can improve these areas further and deliver outstanding service.”

}

Equiniti FTSE350 client survey – the highlights

94% of clients are satisfied or very satisfied with their relationship manager

87% are satisfied or very satisfied with Equiniti's management of AGMs

89% are satisfied or very satisfied with the overall service

78% are satisfied or very satisfied with our dividends service

www.equiniti.com > 15

feature BPO

We need to talk about money

The economic climate is accelerating investment in business process outsourcing.

Fraser Allen explores a maturing market

16 > Equiniti Magazine | winter 2011

Savings. Efficiency. Added Value. You’ve heard it all before – these are the mantras of UK plc as we emerge from the Comprehensive Spending Review (CSR) into an era of national austerity.

But whilst the glum repertoire of media headlines is enough to make anyone feel downcast, there is at least some cause for optimism.

It may have taken a global recession to make it happen, but many organisations across both the public and private sectors are now finding much smarter ways of running their operations. And according to John O’Brien, Research Director

with independent technology analysts TechMarketView, one of the prime manifestations of this trend will be an increase in business process outsourcing (BPO).

“BPO is the fastest growing area of the UK’s software and IT services market,” says John. “At the moment we’re talking about a compound annual growth rate of about 6.5% over the next four years, and that’s significantly higher than the rest of the industry.”

This increase looks set to be triggered in part by the public sector making savings in the wake of the CSR. However, many in the private sector are also keen

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“The suppliers that are going to continue to succeed are the ones with a strong business consulting perspective”

}

BPO is the fastest growing area of IT and software services in the UK market

to emulate innovations in BPO pioneered by sectors such as financial services. For example, John pinpoints utilities as a likely growth market.

He also believes that the market is shifting in terms of the type of BPO specialists that are flourishing. “Ten years ago, there were a lot of contracts awarded that were purely about cost, but now most of the leading players offer a lot more. They have a good understanding of the markets their clients work in, and they’re growing because they’re delivering a good service. The suppliers that are going to continue to succeed are the ones with a strong business consulting perspective. It’s not just about cutting short-term costs, it’s about proving that you can deliver long-term benefits.”

This consultancy-led approach to BPO has long been Equiniti’s specialism, whether it’s through share registration, employment benefits or investment services. It’s a strategy that has been strengthened over the past 18 months with the acquisition of Belfast-based ICS Computing and the more recent merger with pensions and employee benefits experts Xafinity. Colin Finnegan, Business Development Director at Equiniti, anticipates demand for the company’s BPO expertise to continue to increase significantly.

“The long-term trend is that it makes sense for organisations to outsource,” says Colin. “It allows them to focus on what they do best, whilst also securing significant cost benefits. I agree with John that the market has matured. Contracts used to be very focused on ‘do it for 20% less’, whereas now there is much more of an emphasis on innovation and adding value. A good BPO service provider needs to bring a range of goods to the table.”

Colin adds: “What Equiniti offers is experience and depth of capability across some very complex BPO undertakings. If we take last year’s Lloyds Banking Group rights issue, we’re talking about £13.5bn in funds raised over a fourweek period – a demanding challenge involving huge volumes, with no room for error. So we have a strong heritage in complex, bespoke solutions and we’re now applying that more broadly across other areas of BPO, in both the private and public sectors.”

Colin expects the Government’s spending review to encourage BPO in the public sector. However, one difficulty that has hampered outsourcing innovation there has been the impact of poorly managed procurement.

“There have been a lot of problems and missed opportunities,” says John.

“Much of it simply involves public sector procurement teams getting up to speed with the market they are buying from.

They also need to understand that, in order to deliver a good service, the private sector has to make money too.”

Colin agrees. “There’s an appetite in the public sector for more intelligent outsourcing and innovative partnership models. There are also a lot of people in the public sector with good ideas about what can be done, but so often that all gets lost in the procurement jungle.

The Government has a part to play here in stepping forward and challenging procurement rules that limit innovation.”

“Another issue is that, historically, the Government has not made the most of its huge buying power,” says John. “It represents a third of the UK IT market.

The private sector would have worked this out years ago and clubbed together to buy services more effectively. They are beginning to get there now though.”

According to John, another key to successful BPO, whether it’s in the public or the private sector, is ensuring that both the client and the supplier are working together to achieve shared goals. “If it’s made clear from the outset, and in the contract, that everyone’s in it together, sharing the risks and rewards, the client (and the supplier) is much more likely to achieve a successful outcome,” he says.

It’s a long way from the public stereotype of BPO at its worst – a cut-price offshore customer call centre staffed by under-trained workers with a limited command of English. However, John believes that the worst examples of these are largely consigned to history. He also believes that most of the immediate growth in BPO will be ‘onshore’ or ‘near shore’.

“In the current economic climate, BPO is a particularly useful tool,” says John.

“It’s not the only answer but it can deliver significant benefits in terms of cost and quality. The evidence is out there.” www.equiniti.com > 17

feature company law

Business is changing.

Has company law kept up?

The UK business world is barely recognisable from the Victorian era, during which the first tentative company legislation was drafted. Last year’s introduction of the final tranche of the 2006 Companies Act represented the biggest single reform in modern times, but is there more to be done? What role should future legislation play in influencing corporate governance? And how can legislators expect corporate culture to evolve in the future? These are big questions – and we seek to provide some of the answers

18 > Equiniti Magazine | winter 2011

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Our panel of experts

Claire Davies Head of Secretariat, Lloyds Banking Group Tony Manwaring Chief Executive of business think-tank Tomorrow’s Company Peter Swabey Company Secretary, Equiniti David Venus Senior Director, David Venus & Company

One of the precursors to modern company law was the 1720 Bubble Act, prohibiting their establishment

When Robert Lowe, then President of the Board of Trade, first introduced a simple procedure for limited company formation in 1856 (the Joint Stock Companies Act), he described it as “an experiment that should be tried”.

It was, says David Venus, an experiment that has continued ever since.

“Perhaps there are some people who will agree with the sentiments of the Chinese Premier Zhou Enlai in relation to this 'experiment',” he adds. “When he was asked in the 1970’s for his opinion on the success of the French revolution, he said that it was 'too early to tell'.”

Over the years, the typical corporate structure has striven to achieve a careful balancing act between simplicity and security, uniformity and flexibility, and responsibility and efficiency. Yet the fragility of this balance was brought sharply into focus by the banking crisis and its implications for the wider application of company governance.

Given the sweeping changes in technology, communication and society

}

that have taken place over the course of the 19th and 20th centuries, the Companies Act was undoubtedly a long overdue (and long awaited) overhaul of existing legislation, which had been patched together from many previous Acts and statutes. With the final tranche implemented in October 2009, the Act made changes to almost every facet of company law, particularly affecting smaller businesses. But did it go far enough?

“The Companies Act represented a recognition that the world has moved on,” says Peter Swabey. “The Government was keen to take on the views of the market, and the Act was very inclusive. The primary benefit of the Act was around recognising and codifying change – we now have a good body of work to refer to, all in the one place.” But it wasn’t a perfect fit for all.

“The Act tries to imagine what a small company needs, and small companies make up 99% of the marketplace.

Unfortunately, some of the elements that have been incorporated don’t work for large companies – for instance, the

www.equiniti.com > 19

feature company law

‘statement of capital’ does not work for companies with lots of shareholders.”

Claire Davies agrees – with 1,600 subsidiaries within the Lloyds Banking Group, there have been benefits for large groups as well as small companies. “Most listed companies have subsidiaries, so have been able to benefit from improvements such as standardisation of Articles, and dispensing with the memorandum, general meetings, and so on. The biggest benefit for listed companies has probably been the changes to facilitate electronic shareholder communication, finally bringing Company Law into the 21st century,” she says.

Wake-up call

“The primary benefit of the Act was around recognising and codifying change – we now have a good body of work to refer to, all in the one place” Peter Swabey, Company Secretary, Equiniti

20 > Equiniti Magazine | winter 2011

With the Companies Act having drawn a line in the sand, there appears to be little further appetite for reform of company law, and it was a topic notable for its absence in the main party political manifestos of this year’s General Election.

Attention has, however, focused on the wider issue of corporate governance, particularly given the fallout from the banking crisis. Will this lead to significant political interference in the way businesses govern their own affairs?

“There is no doubt that the credit crunch was a wake-up call,” says Claire.

“Firms in a number of sectors got used to doing business in a certain way, without giving rise to any governance problems.

Inevitably, a degree of box-ticking crept in over time in some areas.

“Partly as a result of this, corporate governance is one area that has been very much in the spotlight since the credit crunch, resulting in a plethora of consultations. Of course it’s important to understand what went wrong and what needs to change, but I’d challenge the necessity for the number of reviews and new initiatives that have taken place without giving the earlier initiatives the chance to ‘bed in’.

"If you have the right calibre of people on your board, people with strong personal reputations to protect who want to do a good job, they will care about doing the right thing. Corporate governance should be about ensuring the right cultural behaviours rather than rules and regulations.”

Claire points to the existing “patchwork”

of regulation that already affects every move of her secretariat. “First there’s legislation, with private companies and public companies both covered by the Companies Act,” she says. “Then there’s sector regulation – as a banking group, we’re regulated by the FSA, and as a listed entity we are subject to the listed regimes both in the UK and US. Then there’s the FRC’s UK Corporate Governance and, behind that, a whole raft of additional guidelines such as ICSA’s improved board effectiveness review, Smith and Turnbull. Currently there are numerous strands run by different bodies with different timescales, different agendas, and different terminology, but potentially all covering the same thing. It feels like a lot of fingers in the same pie. There must be a strong case for rationalising the overlapping interests of these various bodies to provide clarity.”

Whilst sympathetic to this, David Venus believes that this is, in part, the consequence of the ‘managers’ or 'agents' (the board of directors) gaining an upper hand over the ‘principals’ (the shareholders). “The more principals there are – as in a public company – the more difficult it is for them to co-ordinate action,” he says. “Many believe this has led to the agents having too much power. It can be looked at as a battle between capital and labour, which labour – or in this case top management – has been winning to the detriment not only of the shareholders, but also to society as a whole.” This theme was taken up last year by an unlikely champion Lord Myners who, while acknowledging the irony of a Labour Minister advancing the proposition, called for a strengthened capitalism.

A consequence of all this has been the advent of the Stewardship Code, the Remuneration and the AIC Codes for financial institutions, and other new or revised corporate governance measures aimed at redressing the balance.

Uniformity and simplicity

David also raises the issue of employee representation on boards – an area in which other European nations have long taken a much more progressive stance than the UK. “A serious debate over the two-tier structure fizzled out in the UK in the 1970s, and there no longer seems

“Corporate governance should be about ensuring the right cultural behaviours rather than rules and regulations” Claire Davies , Head of Secretariat, Lloyds Banking Group

any appetite in Europe to persuade or cajole reluctant jurisdictions to adopt the model,” says David. He finds it surprising, however, that, in the wake of the recent financial crisis, there has been no renewed debate in the UK as to the possibility of top companies adopting the continental two-tier board approach.

One advocate of this structure is Sir Richard Greenbury, former Chairman of M&S, who became a convert following 12 years on the board of Philips NV. He was recently reported as saying that “a supervisory board made up of seven or eight top businessmen from a variety of disciplines is a much better way of controlling a very aggressive Chief Executive than a Non-executive Chairman”.

A further European initiative that has floundered is the dream of a common public limited company, uniform in nature and available throughout the community. In practice, the structure that was introduced, the Societas Europea or 'SE', is bound by the law of the member state in which it has its registered office – resulting in no less than 27 variations. Another issue is freedom of establishment. David says “after 50 years of the community, most member states, including Germany and France, continue to apply the registered office doctrine (i.e. the country in which a company’s management resides asserting jurisdiction, despite the company being incorporated elsewhere). This is against the text and spirit of the original EC treaty. The European Court of Justice is fighting back, aided by the adoption

of a cross-border merger directive at the end of 2005, and an EU services directive allowing the transfer of companies’ registered offices across boundaries.

We are at last seeing a shift.”

But however great the desire for simplicity and uniformity in company law, other forces, such as terrorism, money laundering, recession and the dizzying pace of technological progress, bring with them the desire for tighter regulation. And looking further ahead, there are other questions, such as environmental issues, that will also affect the future of corporate culture.

Tomorrow’s Company

“We have had a significant period of review and reform of company law,” says Tony Manwaring. “But legislation alone cannot deliver the changes that are needed. For us now, the shift is towards behaviours and cultures, towards the quality of decisionmaking, and the frameworks within which those decisions are taken.”

Tomorrow’s Company is a research and education charity that encourages corporate structures to radically rethink how they operate in the modern world. One of its key initiatives, the Good Governance Forum, brings together business in the corporate and financial sectors, and leading professionals such as lawyers and accountants, to provide a multi-sectoral approach to reform. The group is taking what Tony refers to as a “sleeves rolledup” approach, and aims to publish a series of practical recommendations to guide business practice.

Tomorrow’s Company advocates two key principles to corporate governance.

Firstly, it places a strong emphasis on boardroom culture. Tony explains: “As the recession and credit crunch played out, it became increasingly clear that the sector needed to go beyond the compliance view of risk, to also see the qualities required to manage risk and innovation – the ability to challenge yourself, the ability to think in terms of complexity and uncertainty, and so on. That then challenged some of the views around the composition of the board, such as recruiting Non-executive Directors on a ‘whiter than white basis’.

“The primary focus had been on ensuring that there was no perceived

conflict of interest. Instead, there should be a recognition that the Non-executive needs to be able to understand the business model and to challenge the board. Boards should have a clear sense of their business model and mandate, their appetite for risk, and the way in which they will create long-term value. It should be a key role of the Chairman to ensure that this clarity of vision is lived up to.”

Tomorrow’s Company also proposes a system of stewardship, whereby business owners understand their particular responsibilities in creating long-term shareholder value and shaping the UK’s response to major global issues, such as climate change and avoiding a recurrence of the recent financial meltdown. The stewardship principle has been picked up by the FRC, which is investigating how it might be incorporated into the combined code of practice.

Enlightened self-interest

In years gone by, machines and factories were the engines of commerce, but today value rests with less tangible assets – the people, the intellectual property. “People are classed as a cost rather than an asset on the balance sheet,” says David Venus.

“But for many companies today, staff are all they’ve really got. It’s also now widely accepted that, as well as their shareholders, companies have a wider responsibility to their employees, their clients, their suppliers, the communities they work in, and even wider society in general.”

The result is that HR and corporate social responsibility will continue to feature more prominently in boardroom discussions. “The company is a vehicle for creating long-term value,” says Tony. “The evidence increasingly suggests that those companies that are not only aware of their economic, social and environmental responsibilities, but also see them as an opportunity, are likely to be more robust, more resilient and more effective vehicles of creation in the long term. I refer to it as ‘enlightened self-interest’”.

So, as Claire Davies suggests, might the future of company law lie in supporting and encouraging the innovation and skills of individuals, rather than waves of overlapping reviews and regulation?

Only time will tell. www.equiniti.com > 21

feature Agm planning

Six steps to AGM heaven Client satisfaction with AGM management was one of the highlights of the results of this year’s Capital Analytics Survey, so we asked Lisa Graham –what goes in to the perfect AGM?

Planning an AGM is certainly not for the faint hearted. A key event in the calendar of any organisation, often held in the public spotlight and sometimes with contentious questions on the horizon, a successful AGM requires a dedicated team, logistical dexterity, and time ­– with months sometimes spent on a meeting that may last less than an hour. So what are the key areas to bear in mind? And what steps can you take to guard against the great unknown? We asked Equiniti Registrar Lisa Graham to share her 15 years of experience in AGM management, and pick out six steps to success.

your papers in order?

1 Are Before you can start planning the details of the actual meeting, the first thing is to ensure that all documentation is properly proofed and contains all necessary information, as stipulated within the Companies Act and the Shareholder Rights Directive. This then needs to be dispatched in a timely manner, adhering to the necessary notice periods. It’s also important not to forget the smaller details – the quality of map and directions to the venue is a common cause of complaint from shareholders. All the organisation in the world will count for nothing if your shareholders get lost and miss the meeting!

2 Catching the worm A very high percentage of AGMs tend to be held around the same time of year, April, May and July being the busiest months. This poses an issue when it comes to booking venues, with the most popular booked up many years in advance. When you consider that a good venue needs to have appropriate capacity, be accessible, have a suitable refreshment area, and so on, it really is something that is better addressed sooner rather than later.

22 > Equiniti Magazine | winter 2011

importance 3 The of being flexible One of the biggest concerns on the meeting day is for there to be a higher attendance than expected. Whilst previous meetings can give you an idea, final attendance numbers are impossible to predict with certainty.

There are a number of factors that could increase attendance, such as the inclusion of any contentious resolutions, change of meeting time/location and media attention.

To prepare yourself for the unexpected, choose a venue that can extend its capacity. This is preferable to simply choosing a large venue, because a smaller number of shareholders in a large seating area will look lost. At Equiniti, we have a lot of insight into venues across the country, and into their different pros and cons, and so this is something we can offer advice and assistance with, if clients are unsure as to which venue to choose.

4

Keeping cool with hot topics

When it comes to dealing with difficult questions, the key, of course, is preparation. For this reason, we prepare a ‘question bank’ of the most frequently asked questions, which we share with clients, to make sure they are aware of the season’s ‘hot topics’. However, every company will obviously have very specific issues in relation to their own business, which they will need to prepare for themselves.

In terms of preparing against unexpected questions, there are two approaches. One is to provide an email address to shareholders within the original documentation, allowing them to engage with the Company in advance of the meeting. Another method is to offer a question registration facility as part of the shareholder admittance process on the day. This not only gives the board time to prepare, but also allows the Chairman to conduct the meeting more efficiently and make better use of the time by grouping

No news is good news?

Decide the extent of your media coverage in advance

similar questions together. If you have an interest in the question registration service, a demonstration can be arranged.

5 Media-friendly or press-ganged?

Media coverage can become an issue, although it is something that very much varies from company to company. As part of the planning of any meeting, we will be in communication with the client, asking questions such as ‘Are there any issues we should be aware of?’, ‘What could you be facing on the day?’, ‘Are there any security issues?’, ‘Are you expecting a lot of press?’, and ‘Are you going to allow the press in?’ There is no right or wrong approach, but it is certainly something that companies need to give careful consideration to.

in the 6 Catering age of austerity With many companies cutting back on expenditure in the current economic climate, catering has been a much debated issue for clients over the past couple of years or so. Whereas in the

past there were some companies that used to offer hot meals, buffet lunches, alcohol and so on, the majority of clients have now scaled right back, and instead offer just tea, coffee and biscuits. This is perfectly acceptable – as long as you pay attention to the timing of your AGM. If you’re having a 10.30 meeting, for instance, and you expect it to be over and done with in an hour, then tea and coffee is fine. However, if you’re having a 12 noon meeting, or if you expect the meeting to go on for several hours and span lunch-time, then shareholders will expect something more substantial. So for companies that are having to cut back, thinking about the timing of the meeting is definitely important. www.equiniti.com > 23

feature employee share plans

Employee

Share Plans

the next generation

We take a look at a £2m investment that will deliver groundbreaking share plan technology for Equiniti’s clients

24 > Equiniti Magazine | winter 2011

Company share plans offer great employee benefits, and are recognised as a valuable tool for encouraging employee engagement and long-term workforce stability. However, it remains an unfortunate fact that the current webbased provision for enabling employees to manage their share plans has lagged behind the web technology seen in other industries. For some less financially experienced employees, share plans can sometimes appear a daunting myriad of complex financial information that does little to increase their appeal or accessibility and until now there has been little online to help them.

That is set to change, thanks to

Equiniti’s new ESP Portal. A comprehensive, integrated online service, the Portal delivers a one-stop shop for share plans, allowing users to view their holdings, access information and carry out transactions on a single user-friendly platform. And, as David Coleman, Head of ESP Support Services, explains, it is a unique addition to the market.

“Thus far the companies that have enabled participants to access their share plan schemes online have developed most of the significant functionality for executives. We have instead decided to pull together all the various requirements of all kinds of employees so that we can deliver one portal that is accessible to everyone.

The route we have taken is unique.

look and feel, using company-specific branding, terminology and wording, to maximise the benefit.

In fact, client needs have informed and conditioned the development of the Portal from its first conception, and they were consulted at every stage. “We’ve worked extensively with client focus groups to make sure we’re heading in the right direction, and are now working with volunteers from our clients’ workforce to test out the usability of the software as it develops,” David says.

“We want the Portal to cater for the full lifespan of an employee’s participation in a share plan – from when they join, and are anxious to be reassured that the product is easy to use, and places all the information at their fingertips, to when they leave and want to be able to ask questions, and retrieve their money quickly and easily. This software makes all those requirements a reality.”

Delivery of the Portal will be staged across three phases, in the beginning, middle and end of next year, and will be timed to fit in with the life cycle of clients’ share plan schemes. And six months into the development process, David is confident that the first stage in the life of the ESP Portal will be completed on schedule by early 2012.

Long-term focus

And what makes it exceptional is that we have included our clients and their employees every step of the way,” he says. “Through close consultation with our clients we came up with a list of 900 separate requirements that we have pulled together in a way that is coherent, meaningful and accessible.”

At their fingertips

Using Sharepoint 2010 technology, the ESP portal features a single integrated sign-on and account management function, improved enquiry and modelling capability, and a single platform for UK and international plans. It is also flexible enough to enable clients to give the Portal their own

“The ultimate benefit of investing in the ESP Portal is solidifying our reputation as the number one share scheme administrator.

This is truly a marketleading product”

With an investment of £2m, the development of the ESP portal represents a major commitment for Equiniti, but promises to offer great rewards in improved customer service. “In a difficult financial climate, this is obviously a very significant investment. But despite the figures involved, for us this is not about cost reduction or revenue generation,” David explains. “Our primary objective is to deliver fantastic customer service for our customers and clients, and the ESP Portal will provide employees with more choice, more flexibility and more information at their fingertips, giving participants the best possible experience.”

He adds: “The ultimate benefit of investing in the ESP Portal is solidifying our reputation as the number one share scheme administrator. This is truly a market-leading product, and once it’s released there won’t be much out there that comes close.” www.equiniti.com > 25

company secretaRy David Parkes BAE Systems Portrait: graham jepson

The global presence of BAE Systems presents one of the most rewarding and challenging aspects for David Parkes in his role as Company Secretary

All systems go Tell us a bit about your role I’m responsible for all company secretarial matters across the BAE Systems Group. There are four main areas: plc board support and corporate governance; plc share registration and shareholder services, including listed company regulatory requirements; group subsidiary company compliance and support; and employee share plans.

26 > Equiniti Magazine | winter 2011

Has the current economic climate had an effect on your day-to-day work?

There’s obviously been a lot in the newspapers recently about UK defence spending and we’re certainly very conscious that these are difficult times, and that we need to be efficient in everything we do across all our departments. But I think it’s

important to recognise that we are quite a geographically diverse company, and the UK accounts for only just over 20% of our business.

What are your priorities for 2011?

Corporate governance, following the publication of the new UK Corporate Governance Code and Stewardship Code will obviously be one key area. Other

CV

CURRENT ROLE Company Secretary, BAE Systems plc

1991-1999 Assistant Company Secretary, British Aerospace plc

Law, in my case – and then thought about how to make a career from that when I graduated.

What’s the most important lesson you’ve learnt during the course of your career?

Never to be afraid to back your own judgement.

Who inspires you?

I’ve got a lot of respect for the Queen.

She’s been doing a very public job, in difficult circumstances, for a long time, during which there’s been a huge amount of social change. And yet she has always shown great dedication, and a well-judged understanding of how to discharge her role. So I think she’s inspiring not from a particularly monarchist or royalist point of view, but in terms of an individual who has been dedicated to trying to do a good job for her whole life.

What do you enjoy most about your job?

issues for us will be the challenges of company employee share plan compliance on a global basis; how we can be costeffective in delivering our services to shareholders and employee shareholders; and the ongoing challenge of how we monitor and influence the development of new laws and regulations that affect us.

If you could ask the Coalition Government for one thing to help business, what would it be?

Personally, I’d ask for fewer headlinegrabbing initiatives. Governments are too good at coming up with one-off initiatives, but all we really want are well-thoughtthrough policies, and a sound regulatory and economic base for companies.

How would you describe the skills of a good company secretary?

I think these skills are what the ICSA can deliver as part of qualifications and training, but there are certain personal qualities I think it’s important for a company secretary to have. For me, these are sound judgement, integrity, and the ability to act effectively under pressure.

Did you always want to be a Company Secretary?

When I was at school or university, I’m not sure that I even knew what a Company Secretary was! I did find out about the company at university, though, and joined from there. But, like many people, I did the basic education – in

The best bit is getting out of the office and seeing the real company. We have a lot of big engineering programmes, which have real scale and complexity, and seeing something like a Typhoon aircraft being built and flown off the runway, or looking inside a nuclear submarine, is fascinating. I think that being a Company Secretary is as interesting as the company you work for, and I’ve always found BAE Systems a very interesting company, both in terms of the products and services that we produce, and the global nature of the business.

How do you relax at the weekends?

I enjoy cycling and do a lot of that, normally around the South Downs, close to where I live. And at this time of year in particular, I spend most of my time watching my sons playing rugby.

If you are interested in appearing in this feature in the future, please email contactus@equiniti.com

www.equiniti.com > 27

my equiniti: Aaron Grey He nearly made it as a footballer, but Aaron Grey finds much to appreciate in his role as a Relationship Manager at Equiniti

My own view is that Relationship Managers should only be in the office to progress things on behalf of our clients. If we’re not doing that, we should be sitting in front of them, talking, and, more importantly, listening to them.

I joined Equiniti when I was 17, as an agency post boy, and used to deliver faxes around the offices. In 1996 I secured a permanent position and worked my way up, through operations, registration, share plans, finance, and business development, with the objective of becoming a Relationship Manager. That 14 years of experience, has definitely served me well; it’s given me not only a better understanding of the products and services that we offer and good industry knowledge, but also an awareness of the pressures and constraints that other colleagues are under.

Relationship management was always the area that I wanted to work in. When I worked in business development, it was much more ‘one-touch’ – you would go in and present to the company, hopefully win the business, and then pass it on to someone else to grow that relationship. In my current role, I love getting to know clients, 28 > Equiniti Magazine | winter 2011

both on a professional and more personal level, and continuing to build that relationship over a period of years.

I appreciate the chance to get out and about, too – my own view is that Relationship Managers should only be in the office to progress things on behalf of our clients. If we’re not doing that, we should be sitting in front of them, talking and, more importantly, listening to them, looking for ways to work in partnership and add value to the relationship.

Relationship Managers are both the direct interface with the client, and their voice within Equiniti.

It’s our job to understand their objectives, to communicate their requirements, feedback and any ideas to colleagues within the group, and to provide suggestions and solutions to meet their immediate and long term needs.

Because of that, understanding our client’s agenda, and the internal pressures they face, is key

for us. Anyone can visit clients and read from a menu of products and services, but a good Relationship Manager will listen, understand what a client is looking for and where they’re going, and present them with options for services that are tailored to their needs.

Looking towards the future, while share registration and share plan services will always be our core services, we’re always looking at other options to ensure we’re providing our clients with added value. The introduction of David Venus, the enhanced Investor Analytics solutions, and our move into the BPO market gives us new opportunities to use the infrastructure, IT and people we’ve already got in place to offer our clients the very best solution to meet their ever changing needs.

So it’s quite an exciting time for Relationship Managers because it means growth within our role.

It’s like the excitement of a new job without having to move!

Three quick questions

What are your passions outside work?

Horse racing, fishing and football. I used to play county league football and, although I’ve hung my boots up now, I’m involved with my little boy’s undersevens football team – which presents its own challenges!

What's the best piece of business advice you've ever been given?

"Fail to prepare, prepare to fail."

Tell us something surprising about yourself

When I was at schoolboy level I played for Brighton and Hove Albion and Portsmouth football teams, and had trials at Norwich City. I then made the obvious decision to pass up fame, fortune and Cheryl Cole for a career at Equiniti.

www.equiniti.com > 29

What's new at equiniti?

For the latest news of what's happening at Equiniti, have a look at the website www.equiniti.com/news

On the payroll

Last year Xafinity paid out more than £11 billion to pensioners, annuitants and their dependents

Award winning pension solutions Xafinity Paymaster performs pension administration and payroll services for more then 750 schemes in the public and private sectors. We make payments totalling more than £11 billion per annum to pensioners, annuitants and their dependents in over 180 countries throughout the world.

Our longstanding share registration client BAE Systems has now also appointed Xafinity Paymaster to provide third party administration services across five

of its pension schemes covering over 200,000 members.

And there’s obviously something in the air, because the BAA Pension Trust Ltd, acting as Trustee of the BAA Pension Scheme for airport employees has joined them by appointing Xafinity Paymaster to provide third party administration services for its DB pension scheme covering over 20,000 members.

Xafinity’s priority for the year ahead is to work with our clients to help ensure that the foundations

Xafinity won the Pension Systems Provider of the Year 2010 award at the prestigious UK Pension Awards – for the fifth time in six years 30 > Equiniti Magazine | winter 2011

for pensions reform and autoenrolment are put in place.

Meanwhile, Welplan, the leading supplier of employee benefits to the building services industry, has selected Xafinity Claybrook’s Compendia platform to run the pension administration of its defined contribution scheme.

Xafinity Claybrook is the market-leading supplier of software and services for pension administration, actuarial valuation and data analysis.

Xafinity won the Pension Systems Provider of the Year 2010 award at the prestigious UK Pension Awards – for the fifth time in six years. The award reflects the quality of Xafinity Claybrook’s software and our approach to working with clients.

The compelling benefits offered through Equiniti’s payroll services has led to several good wins this year include payroll outsourcing for the Met Office and payroll services and HR software for the Scottish Parliament.

We’ve also achieved our first group win, providing payroll services and HR software to Dignity Plc. Equiniti is currently establishing a network of international partners so that we can provide international payrolls as part of a single contract.

This is in response to requests from many Equiniti Group customers who have operations outside the UK.

Registered We would like to welcome the following recent new share registration clients: P rimary Health Properties L eicester Tigers ational Milk N Records angar8 H

question time: Peter Swabey This issue, it's the turn of our own company secretary, Peter Swabey, to face the questions

business Q How’s at Equiniti?

– there’s just so much A Busy going on at the moment.

Not just externally in the market affecting what we do, but also internally – constantly looking for ways to further improve what we do for our clients and their shareholders. been keeping Q What’s you busy this week? the two biggest A Probably pieces of work have been commenting on the Securities Law Directive and the draft CSD Regulation Directive – both with early January closing dates. In some ways, European legislation affects the UK less than other member states, because we’re pretty much already at the leading edge of many of the developments that the Commission are seeking to achieve throughout the EU. That said, it is important to follow it all, because there is always the risk of collateral damage from attempts to convert a variety of market models – some of which are imperfectly understood by those drafting legislation – into a single harmonised model. Very few people in the UK market do keep close track of EU developments, so this is one area where we really can make a difference. the best thing Q What’s about your job?

portrait: Dave McHugh

The variety of work A Variety.

– when I arrive in the office I rarely know with any degree of certainty what I’m going to be doing that day – and the variety of people that I meet. As company secretary of Equiniti, I meet a wide network of company secretaries, all of whom have different interests, and, in many cases, different jobs.

It’s fascinating seeing how all these

just put you in a time Q We’ve machine so that you can

As company secretary of Equiniti, I meet a wide network of company secretaries, all of whom have different interests, and, in many cases, different jobs. roles fit together, and has given me a great understanding of our market and the wide range of challenges that our clients have to meet. what’s the most Q And challenging? ! The most challenging A Ditto for me is balancing and prioritising the various issues that arise during the day. This can be something simple – like a routine question from a Relationship

meet yourself on the day that you left school. With the benefit of experience, what business advice would you have passed on to your younger self? sure I’m really qualified to A Not give business advice to anyone! If anything, I think it’d probably be not to forget the work/ life balance – and to pursue a job that you find exciting and challenging. does the Q What weekend hold? the dogs, dinner A Walking with friends and catching up on post-Christmas TV – possibly from Australia on Sky Sports.

Manager or their client about the AGM – or something complex, such as analysing the impact of some potential new legislation, and responding to the Government with examples to support my analysis.

And, of course, whether it’s a simple or complex question, it will be either urgent or non-urgent, and have to be prioritised accordingly ! you weren’t a company Q Ifsecretary, what alternative career might you have pursued?

– which I think it is A Assuming fair to do – that I lack the ability to open the batting for Sussex and England, I trained as an archaeologist. Do you see me as Indiana Jones ? I’ve got the hat!

would be your Q Who dream dinner guests? think I’d want to get back in A Ithat time machine and gather Alexander the Great, the Dukes of Marlborough and Wellington, Sir Winston Churchill, and perhaps Elizabeth I. It is tempting to include Ricky Ponting though! you recommend Q Can a good book?

A Wisden – obviously. you could be anywhere Q Ifelse in the world right now, where would it be?

Melbourne Cricket A The Ground – watching the Australians lose the Ashes! www.equiniti.com > 31

‘A MEASUREMENT OF OUR EXPERTISE’

With over 50 years experience in share registration, Equiniti is the UK’s market leader.

Over 700 companies, from newly listed to over 57% of the FTSE100 choose us.

This is testament to our service proposition which is something we are extremely proud of and consistently strive to improve.

www.equiniti.com

Collectively, the following key disciplines make us the registrar of choice: • The breadth, skills and knowledge of our people • Our ability to lead with our cutting edge technology systems • The added value we provide through partnering with our clients So to find out more about how we measure up, contact Karen Bolding on 01903 698636 or email karen.bolding@equiniti.com