Equniti Magazine 10 ­ – Summer 2013

ENGAGE, INNOVATE, DELIVER.

Appliance of Science

Government innovation champion David Willetts says R&D holds the key

INSIDE> WHAT IS INNOVATION? A fundamental question for business PAGE 4

THINKING ALOUD The tech that makes Employee Benefit Solutions tick PAGE 6

SIX STEPS The fundamentals of Investor Analytics PAGE 22

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FOREWORD

WORDS FROM THE FRONT

of the best

RAGS-TO-RICHES STORIES

Innovation is the key

John Parker, Managing Director, Equiniti

There is often a preconception that the biggest names in business were born with silver spoons in their mouths. In the case of these six business leaders, it couldn’t be further from the truth as we present six of the best rags-to-riches.

As thought leaders, Equiniti always strives to demonstrate just how innovative we can be. We have acquired companies that will help us continue to build on our success, and we have developed products and won awards in recognition of our innovative prowess.

And that shows no signs of slowing down in the future.

In this edition of EQ magazine, we stop and ask ourselves a key question — what is innovation? We also look to some of the most inspiring innovators of our time and find out what has made them the success stories they are today.

In his own words, Phil Ainsley, Managing Director of Employee Benefit Solutions, tells us why it’s so important that our business continues to innovate. You can read more about this on page 6.

I do hope the themes of this issue resonate with your business. I enjoy hearing your feedback, so please do get in touch.

REX FEATURES

Please contact me at: contactus@ equiniti.com

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Indra Nooyi

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Roman Abramovich

Consistently ranked among the World’s 100 Most Powerful Women according to Forbes, Nooyi funded her education by working as a receptionist. Despite arriving in America with little financial security, her intelligence and tenacity allowed her to work her way up to the current Head of PepsiCo.

The IT sector, by definition, is constantly changing and innovating. On page 9 we get an insight into how peterevans is leading the way in the financial IT sector.

John Parker

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Owner of Chelsea Football Club, Abramovich was orphaned at the age of four. His multi-billion-pound business career began during his national army service, when he sold stolen gasoline. After being given money for a wedding present, Abramovich invested this and became a big player in the underground market. He then went on to legitimately grow his business empire to the global success it is today.

CONTENTS INSIDE THIS ISSUE

ENGAGE, INNOVATE, DELIVER.

Appliance of Science

EQ MAGAZINE NUMBER 10 Cover photograph

by Anthony Upton

Government innovation champion David Willetts says R&D holds the key

INSIDE> WHAT IS INNOVATION? A fundamental question for business PAGE 4

THINKING ALOUD The tech that makes Employee Benefit Solutions tick PAGE 6

SIX STEPS The fundamentals of Investor Analytics PAGE 22

REGULARS

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J. K. Rowling

It’s hard to imagine a world without Harry Potter. At the root of this award-winning series and subsequent multi-million-pound franchise is a single mum who was living on welfare and struggling to make ends meet. Now reputedly worth in excess of £500 million, J. K. Rowling is a true rags-to-riches success story.

4

6 Thinking aloud Phil Ainsley talks Employee Benefit Solutions

22 Six steps

The fundamentals of Investor Analytics

5 Maria das Graças Silva Foster The current Head of oil giant Petrobras, Graças Foster spent her childhood in the Brazilian shantytown of Morro do Adeus.

As a young girl, she collected cans and paper to make money, before eventually starting work as an intern at Petrobras. She was the company’s first female Head of Field Engineering, as well as the company’s first female CEO.

6 Li Ka-shing

This Hong Kong billionaire started work at the age of 15, when his father’s death forced him out of school. Rising from factory salesman to general manager, in 1950 Li launched the highly successful conglomerate, Cheung Kong Industries. As a result, locals say that for every dollar spent on the island, five cents will land in Li’s pocket.

26 Company Secretary profile

Meet Rexam’s Company Secretary, David Gibson

28 Masterclass An expert’s guide to innovation and creativity

30 What’s new at Equiniti?

Equiniti news round-up

FEATURES

Kirk Kerkorian

The son of Armenian immigrants to the USA, Kerkorian spent World War II ferrying aircraft from the US to Europe. His first big break was with the acquisition and eventual sale of Trans International Airline, before going on to become one of the leading names in Las Vegas mega-resort development.

24 My Equiniti

Fiona De Antonis always puts the customer first

4 What is innovation?

A fundamental question for business

9 Leading the way peterevans talks innovation in IT

10 Legal longsight

16 Imagine that

Peter Swabey on legislative changes

Innovations that didn’t make the grade

12 Innovation champion

18 Shareholder strategy

David Willets on being the Government’s innovation chief

M&S’s innovative shareholder strategy is turning heads

31 Fine figures

22 million mail packs. 2.6 million transactions.

Just some of the highlights of Equiniti’s year in numbers The Equiniti Group: The following companies are registered in England and Wales. Registered Office: Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA: Equiniti Limited, no: 6226088; Equiniti Financial Services Limited, no: 6208699. Registered office: Sutherland House, Russell Way, Crawley, West Sussex, RH10 1UH: Equiniti Services Limited, no: 756582; Claybrook Computing Limited, trading as Equiniti Claybrook, no: 1287205; Paymaster (1836) Limited, trading as Equiniti Paymaster and Hazell Carr, no: 3249700; Equiniti Solutions Limited, trading as Equiniti Paymaster and Hazell Carr, no: 3335560. While every effort has been made to ensure that information is correct at the time of going to print, The Equiniti Group cannot be held responsible for the outcome of any action based on information contained in this publication. The Equiniti Group does not give any warranty for the completeness or accuracy for this publication’s content.

EQ magazine is produced and published on behalf of Equiniti by White Light Media.

Creative Director: Eric Campbell Writers: White Light Media team, Lisa Labarte, Nicola Collins Designer: Ian Traynor www.whitelightmedia.co.uk. Members of the APA & PPA

EQ magazine has been printed on environmentally responsible paper, manufactured from well managed forests, controlled sources and recycled wood.

www.equiniti.com > 3

WHAT IS INNOVATION? SHARPEN UP YOUR CUTTING EDGE

The world’s biggest and boldest firms prove that putting innovation at the heart of your business will reap rewards FIRST THERE WAS THE WHEEL, the light bulb

and the steam engine. Now we have Twitter, the iPhone and self-driving cars. The nature of innovation in the 21st century may have changed, but it remains critical to economic and business advancement (admittedly sometimes sideways – think selfsorting socks or ‘Smell-o-Vision’).

Increasingly, innovation is also expected and highly valued by customers and investors alike – as the likes of Apple and Google know only too well.

Having brought the world innovations like iTunes, the iPhone and the iPad, Apple has faced some criticism for taking too long to release new products and is now under pressure to produce ‘the next big thing’, with an Apple TV tipped to be on the cards.

“Everybody in our company is responsible for being innovative, whether they’re doing operational work or product work or customer service work,” Apple Chief Executive Tim Cook explained in a recent interview with Businessweek.

While Apple seems to eschew the need for an ‘innovation department’, Google’s secretive ‘X Lab’ facility – rumoured to be somewhere in the Bay Area of Northern California – is reportedly working on a list of 100 future technology projects including a space elevator, self-driving car and augmented reality glasses.

Susan Wojcicki, Google’s Senior Vice President of Advertising, says nurturing a culture that allows for innovation has been key to Google’s sustained momentum. “As we’ve grown to over 26,000 employees in more than 60 offices, we’ve worked hard to maintain the unique spirit that characterised Google way back when I joined as employee #16,” Wojcicki says in a Google blog.

“At that time I was Head of Marketing (a group of one), and over the past decade I’ve been lucky enough to work on a wide range of products. Some were big wins, others weren’t. What’s different is that, even as we dream up what’s next, we face the classic innovator’s dilemma: should we invest in brand-new products, or should we improve existing ones? We believe in doing both, and learning while we do it.”

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WHAT IS INNOVATION? In its simplest terms innovation is doing something differently to create new or better products, services and processes. For society at large it tends to mean more comfort and convenience. For businesses it drives efficiency, productivity and growth.

“Everybody in our company is responsible for being innovative, whether they’re doing operational work or product work or customer service work.”

Sir Richard Branson, a godfather of invention since the age of nine – when he cut his teeth breeding budgerigars and growing Christmas trees – says Virgin Group drives a culture of innovation by encouraging an ‘anything is possible’ mentality.

“At Virgin there really is no such thing as a silly idea – at least not until such time as we’ve poked it around and proved it to be unworkable,” he says in his recent book Screw Business as Usual. “I want all our people to be entrepreneurial, to work under

Equiniti innovations Mark Bullen, Head of Registration Development at Equiniti, tells us about the initiatives that have helped Equiniti establish its reputation as thought leaders, whilst giving us an insight into how Equiniti intends to continue to do this in the future.

Form and function “We launched functionality that allows our systems to trace where shareholders have outstanding assets.

By using this innovative approach and developing our communications strategy, we have returned in the region of £25 million to our clients’ shareholders over the past 20 months.

“We are currently assessing further developments to our system’s infrastructure,

which will deliver a solution enabling clients to materially reduce thirdparty costs they incur in managing their shareholder registers.”

Giving something back “We have recently worked with one of our clients to use the sale of money from forfeited shares (from detached shareholders) to donate to a nominated charitable cause.”

Looking to the future “We are working with some of our clients to offer an alternative dividend scheme, which would offer an incentivised dividend and alternative to the traditional cash payment. “We see this as a very innovative way to motivate shareholders to be proactive in managing their shareholding.”

::TAILORING TRADITION In some businesses, the strength of the brand lies in tradition their own initiative and to realise that if something isn’t happening, then they have to make it happen.

‘Screw it, let’s do it’ doesn’t just apply to me; I want our people to feel the same way, too.”

Another master of innovation is online retailer Amazon. A key focus is driving environmental efficiency, and the group has a Kaizen programme (Japanese for ‘change for the better’) dedicated to this. It involves Amazonians at all levels diving deep into ‘every nook and cranny of a process’ to identify waste and design alternative solutions.

One example is its fulfilment centre at Hebron, Kentucky, where staff found a way to fit 20% more containers into each truck by simply reconfiguring how they were loaded. This has saved the company more than $3 million in transportation costs and 300,000+ gallons of fuel a year. Amazon Chief Executive and founder Jeff Bezos says innovators have to be willing to fail and to be misunderstood.

Speaking at the company’s re: Invent developer conference last year, he cautioned: “If you never want to be criticised, for goodness’ sake, don’t do anything new!”

With three Royal Warrants to its name and an illustrious set of past and present customers, which includes Winston Churchill and David Beckham, Gieves & Hawkes takes pride of place at No. 1 Savile Row – a London Street synonymous with quality.

Originally established in 1771 as a tailor to the British Army and Royal Navy, the prolific label is renowned for its expert craftsmanship. “We offer a full bespoke

service with our master cutters, who have undergone lengthy apprenticeships,” explains the company’s Director of Marketing, Simon Baker. “They are working within a tradition that stretches back hundreds of years. The heart and

soul of our company is its craft.”

But even a company that has tradition and heritage as its core values must look to the future, as Gieves & Hawkes has an increasing foothold in all areas of menswear, including made-to-measure and ready-to-wear.

“The expertise of our worldly, fashionaware cutters is taking the mass-production side of our business forward and creating modern clothing,” says Simon. “We are being innovative by using our tradition in up-todate ways – the old is influencing the new.”

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6 > Equiniti Magazine | summer 2013

THINKING ALOUD PHIL AINSLEY

PORTRAIT BY ANTHONY UPTON

Equiniti’s Employee Benefit Solutions (EBS) offers a wealth of comprehensive administration services for its clients and their employees. Managing Director of EBS Phil Ainsley guides EQ through the innovative technology that makes these services possible I joined Equiniti during a period of transition

Within EBS, we look to put the employee at the heart of everything we do.

We will continue to adapt, integrate and improve our systems to make the user experience easier, slicker and more engaging.

I first joined Equiniti around 20 years ago after working for Lloyds TSB Bank in retail branches, finance, HR and Electronic Banking. Before joining, I’d helped transition companies from paying their employees in cash on a weekly basis to paying them monthly, and directly into their bank accounts. So I came to Equiniti at a time of significant change to help support employee communications and project manage the new services we were offering. The water, gas and electric utility privatisations had already kicked off, as had the building society demutualisations, which saw an explosion in employee share participation and legislative change, which meant banks could carry SAYE funds. It was breaking new ground for me and sparked my interest in equity compensation and wider reward. Now Managing Director of EBS, I am business line owner for all the benefit solutions that Equiniti offers administration for.

What Equiniti offers

The reasons employers put a share scheme in place are varied: it may be to recruit, retain or reward employees, align their interests with those of the shareholders, or to create ‘corporate glue’, where employees work for a diverse conglomerate and there’s a need to raise awareness of the parent company brand. We are market leaders in managing the two main UK tax-approved plans for all employees. We’ve been offering Sharesave since 1990 when banks were first allowed to join the marketplace and SIP since 2000 when new legislation was enacted. We added Executive & Discretionary Plans capability in 2001 and moved into Flexible Benefits/TRS management in 2006. www.equiniti.com > 7

THINKING ALOUD >PHIL AINSLEY

Innovation will keep us ahead of the market

Innovation is vital because the world keeps changing and the market demands that we adapt.

Who would have believed that 20 years ago we would be so reliant on mobile phone technology and the Internet for interaction with others?

Equiniti is always striving to come up with new solutions and we want to remain at the forefront of the market. Within EBS, we look to put the employee at the heart of what we do and we will continue to adapt, integrate and improve our systems to make the user experience easier. I believe that technology is a fantastic tool, but the real value is in the information and results it gives you, and how it can be used to streamline and support the client/employee journey.

A pyramid of portals

The simplest way to explain our vision for putting employees at the heart of what we do is to imagine a pyramid and at the top is the Employee Share Plans (ESP) Portal, where an employee enters our world. This shows real-time summary data for all plans we administer. From there, participants can drill down to plan-specific data on the underlying administration platform, model different scenarios and then transact in real time against it. This concept was designed by our clients and built by us so that we have one system that works for all. Equally, the top of that pyramid could be a Total Reward Statement or Benefits Summary showing Flex choices, pension information and shares, which then feeds down to the ESP Portal, Flex and pension platforms.

I think the portal is so innovative because of its accessibility, usability and reflection of corporate identity that helps to maximise the value employers are giving their employees. We spent a lot of time ensuring that it is as straightforward as possible with single sign-on from secure intranets, client branding and ‘tone of voice’ that mirrors corporate values.

There is always room for improvement and the ESP Portal has continued to evolve to meet our clients’ needs. Since its introduction, a cuttingedge real-time SIP sales application has been added that makes it easier for employees to sell their shares. Winning an award at the Institute of Financial Services’ Innovation Awards for the application was a fantastic achievement for us.

For BT’s recent Sharesave maturity, we developed an online capability that allowed their 8 > EQ Magazine | summer 2013

employees to move their shares into an ISA on maturity, which we’ve now incorporated into the portal. We also recently launched the ESP Portal Account Enquiry, which lets employers see exactly what their employees see on the portal.

Exciting developments with Flex and Project Phoenix For more information, please contact your Relationship Manager

For Flexible Benefits Plans, we’ve recently switched from one admin platform to another.

It was a huge task but we now have a more attractive and agile service proposition for those clients who want to outsource the administration of these plans and include access to total rewards statements.

Project Phoenix has been in development for the last nine months and we are aiming to move our first customers to the new system in the third quarter of this year. Created in response to client demand, it is a new software platform for Executive and Discretionary Plans that also delivers global capabilities. From a client’s perspective, it has greater flexibility to manage changing plan design and gives them ownership over their plans as they can carry out certain transactions and validations for themselves.

What does the future hold for EBS?

We will continue to invest in our people and our systems, encouraging more innovation within EBS to meet changing demand. For the future, we’ll continue to integrate other administration platforms into the Portal to simplify the employee journey and develop a total service proposition for benefits management. If we can bring all that information together in a coherent and understandable way for our clients’ employees so they can see all their benefits in the one place, they will be able to make more informed decisions and act on them straight away in real time.

A final thought

As the marketplace changes, it’s important for me to keep track of how our clients are developing, what their ambitions are and what will give them a competitive edge in their business. My vision is to have a single, secure IT environment for all the services that Equiniti provides so we can offer an integrated, single sign-on view for employees across all our services, irrespective of benefits offered, language, location or currency — the possibilities are endless!

LEADING THE WAY PETEREVANS

By creating a culture of innovation, peterevans is keeping one step ahead of the competition and delivering the very best technology for its clients EQUINITI’S acquisition of software

provider peterevans in 2012 has fundamentally strengthened both firms, by combining the users and producers of cutting-edge technology. peterevans is a Cardiff-headquartered supplier to financial services firms developing innovative technology in the trading, post-trade and asset management space. It delivered the first real-time stock trading app in the UK and over the last ten years has developed a full front-to-back equity order management and processing platform called xanite. peterevans was founded in 1984 as a supplier of back-office technology to asset servicing firms. In the 1990s and 2000s, the range of technology it offered grew to encompass a broader range of services.

“In the mid-2000s we reminded ourselves that we were a technology house and we decided to re-engineer our technology,” says Managing Director Dr Mike Foley.

“There is a lot of legacy technology in the back office, where reliability is paramount.

As a result, people tend not to rework their technology if it hasn’t broken down. Our decision went against the perceived wisdom.”

This bold strategy pushed the firm ahead of its competition, without compromising its reputation for efficiency.

Mike recruited team members with the Internet skills required and merged them with the existing team that already had back-office skills. Together, they developed the xanite platform and an understanding of how the firm would move forward. peterevans’ Head of Marketing and former academic, Sue Foley, then developed a relationship with Cardiff University’s Computer Science and Informatics Department, which the firm leveraged to offer summer placements for

“In the mid-2000s we reminded ourselves that we were a technology house and we decided to re-engineer our technology.” second-year students and employment for graduates. The company gained graduates with the latest skills, and the students employment within the financial IT sector.

“The people we bring on board from the university keep us younger,” says Mike. “If you aren’t careful, you can end up being a legacy company producing legacy technology. When we first started, the systems we developed in the 1980s were in the Cobol programming language, but there are no programmers being taught Cobol any more at university.”

They became very expensive people to employ, but also were an increasingly limited collection of individuals. A Computerworld survey in 2012 found that 50% of respondents had Cobol programmers with an average age of 45+ and 22% had an average age of 55+.

Mike notes that, as an employer and developer, a firm must be cognisant of what IT graduates are being taught and what attributes they should have.

“We decided to use Java as a language that was taught at universities in Wales, had discipline associated with it, so the firm could control the code that was built, and it wasn’t aligned to a manufacturer, meaning we could be multi-platform. Each of those decisions has coloured the development of the Centre of Excellence in Cardiff.”

The strategy paid off and the firm continues to reap results. “In 2011 we won ‘Best New Development Award’ for xanite Wave at the Systems in the City event, based on our iPhone trading app,” says Mike. “That was perhaps the most rewarding praise because it acknowledged that we were ahead of the pack and that our clients were getting the benefits.” In the following year, 2012, peterevans also won ‘Best Execution Only Settlement System’ at the awards.

“By combining best market practice gathered from our client base with the experience of working with Equiniti as both a partner and a client enables us to deliver best-in-class solutions,” says Mike. www.equiniti.com > 9

FEATUREON THE HORIZON SWABEY

Legal long #ight

The biggest issues on the horizon for company secretaries in recent months have been changes in reporting, executive remuneration and dematerialisation. Equiniti Company Secretary Peter Swabey outlines their progress and how the industry is making preparations.

Dematerialisation

Dematerialisation — the removal of share certificates from the UK market — is looming larger than ever. As an industry, we must accept that it is no longer a case of if, but when this will happen, and we must plan accordingly. To that end, Equiniti and the other members of the ICSA Registrars’ Group held a conference on 25 April to consider how the UK market can comply with the new legislation, whilst recognising the unique structure of the UK share ownership market.

The legislation working its way through the European Parliament, which will effectively force the UK market to do away with share certificates, is the ‘Regulation on improving securities settlement in the European Union and on central securities depositories (CSDs)’, known widely as ‘the CSD Regulation’. While the legislation is still under discussion, the sections relating to dematerialisation and the change to harmonised settlement, no more than two days after the trade date (T+2), are not.

The formal trialogue between the European Commission, Parliament and Council of Ministers is expected within the next six months and changes are likely to be implemented around the end of the year.

T+2 cannot easily be introduced in a market reliant on the movement of pieces of paper, hence the

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requirement for dematerialisation in those markets where this is not already in place. The currently proposed start date for T+2 is 1 January 2015, and new securities will be required to be issued in dematerialised form from that date.

This is, potentially, the biggest change to hit the UK share ownership model since the introduction of CREST. At the ICSA meeting in April 120 delegates heard suggestions from representatives of the three main UK registrars and of Euroclear UK & Ireland (Euroclear) for the best way to manage this complex change and proposals for a workable model for the future. If we argued that the central point of the meeting was to get engagement and raise awareness, then we nailed that.

We do not have the final details of what the CSD Regulation will require, or of how the UK Government will decide that this should be implemented, and much remains to be done to define common security features and the details of how the sale and purchase processes will work.

However, in creating a model, the Group has focused on what share certificates are actually used for, and on adapting current processes, whilst reducing paper flows where possible, so as to minimise change and reduce the impact on shareholders and issuers.

FEATURE

The more change that is built into the new model, the greater the cost of implementation will be.

Of course, individual registrars are likely to introduce bespoke enhancements and the finer points on the market-side around sales and purchases remain to be defined.

The Group has also considered the legal underpinning necessary to support the new model, and will continue to liaise with the Government.

Notwithstanding the fact that the CSD Regulation will become law in member states without separate implementing legislation, some changes will be required to ensure that UK law does not conflict with the regulations, and to provide the legal underpinning for the new UK share trading model.

Overall, issuers on the panel and in the audience were supportive of the model and the registrars were encouraged to further develop this work and share the results with issuers and other market participants. Both issuer and retail shareholder representatives were clear that the direct record model, which retains the benefits for both sides of the direct ‘name on the register’ relationship between issuer and investor, is far superior to any nominee-based model requiring intermediation.

While the majority of the UK market is dematerialised already with the institutional investor holdings mostly in CREST, there remain many millions of retail investors who will be affected by this change. In the UK, share ownership is significantly more diverse and reliant on direct and unintermediated relationships between issuer and shareholder than many other markets.

The process of communication with stakeholders will be absolutely critical and needs to start sooner rather than later. Standardised wording for use by all issuers is essential but stakeholders say shareholder education must not be thought of as “just issuers’ responsibility”. This, like the whole change programme, should, in my opinion, be coordinated centrally by the Government, specifically HM Treasury and the Department for Business, Innovation and Skills.

It was agreed at the conference that the Treasury should be asked to take a more active role in the debate, both in terms of giving maximum clarity

of their view, and keeping the UK informed of EU discussions and developments, and the likely implications for the UK, so all interested parties can act accordingly. The Group will continue to work on refining the proposed model and to discuss the UK implementation with the Government, and we will keep you informed as the situation develops.

Reporting and executive pay

New reporting requirements become effective on 1 October so we are likely to see the new format reports appearing around January 2014. This will divide the narrative into two documents with a brief high-level strategic report and an annual directors’ statement containing the bulk of the company figures. Some companies are already making arrangements while having to comply with the current regulations.

Preparations are also in hand to change the way companies report executive remuneration.

To simplify and clarify the arrangements the Government wants one comparable figure to be published. More details of how the single figure will be calculated were published in March with a very short consultation period, and the regulations are going through this session of Parliament and could be ready at the end of June. With such a political issue as executive pay we can expect more changes proposed by MPs before completion.

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INTERVIEW

eering into our economic future, the Government’s innovation chief is setting scientific sights high. With plans in place to boost the development of cuttingedge technologies, David Willetts wants the UK to aspire to become the world’s research and development lab, and the best place on the planet to do science.

Willetts became Minister for Universities and Science under Vince Cable in the Department for Business, Innovation and Skills (BIS) in 2010. He describes the role as the highlight of a parliamentary career spanning more than two decades, with an important role to play in steering Britain out of recession.

Willetts was born and educated in Birmingham and took the well-worn route to government gaining a PPE degree at Oxford and working as a researcher before being elected as Conservative MP for Havant in 1992. Once described in The Spectator magazine as “the real father of Cameronism”, in the mid-1990s he pioneered the idea of ‘civic conservatism’ – a forerunner to the Big Society — and he has always had an interest in social theories and in particular social mobility.

He has written widely on economic and social policy and is a visiting fellow at an Oxford college, a cerebral approach that earned him the nickname ‘Two Brains’. The moniker stuck and most media commentary on Willetts generally revolves around whether he has engaged one, both or neither of these brains. When asked how he feels about it, he fires back a well-rehearsed, “It could be worse, it could be ‘Two Chins’.”

Responsibility for innovation is in his job description. Willetts says it is absolutely crucial for our economic growth and that he believes Britain is well placed to innovate its way out of the economic doldrums. An independent review of the UK research base for his department found more than 400 niche areas of research in which the UK is ‘distinctively strong’ in 2011.

“Britain is an innovative country and we can be very proud of that.

There is no other medium-sized economy which has anything like our range of world-class research,” says Willetts.

P

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BUSINESS MUST “Investing in research and development can give British business lift-off,” says the Government’s innovation champion, David Willetts

INTERVIEW

www.equiniti.com > 13

INTERVIEW But how can government influence and encourage such a flighty and creative process as innovation, especially in such riskaverse times?

“Britain is an innovative country and we can be very proud of that. There is no other medium-sized economy which has anything like our range of world-class research.”

Willetts describes innovation as “a combination of free thinkers doing things differently and the full resources of a sophisticated science research and development (R&D) base”. He sees his department’s role as ensuring that the UK’s science and R&D base is operating at full potential, which has not always been the case. Britain does not do as much R&D as some other competing countries and is strongest in business areas which do not involve capital-intensive R&D, such as creative industries and financial services.

Willetts wants to reverse what he sees as a historic failure to fund R&D (as distinct from pure science), which has allowed many projects to fail somewhere between scientific discovery and commercial application – the so-called ‘Valley of Death’.

The Government launched a scheme last year to help link up new ideas emerging from universities with businesses. The £100 million fund for R&D facilities on university campuses required private companies, partners or charities to put in twice as much.

“It was so oversubscribed with good ideas that the Chancellor increased it to £300 million from the Government to attract more than £600 million from private companies, and we’ve ended up with a total one-year R&D capital investment of a billion pounds in university campuses,” Willetts says.

The other big idea unveiled by Willetts in a speech to the think tank, Policy Exchange earlier this year is to fund innovation in big, generalpurpose technologies, which can benefit business as a whole. Willetts unveiled his ‘eight great technologies’ that he believes will propel the UK to future growth and announced £600 million of funding. His eight priority areas are: big data, space, robotics and autonomous systems, synthetic biology, regenerative medicine, agri-science, advanced material, and energy.

“Each one has implications potentially so significant that they stretch way beyond one particular industrial sector. Information technology has transformed retailing, for example. Satellite services could deliver precision agriculture,” says Willetts.

So, where should British business be looking in the world for innovation inspiration?

“I have to say the West Coast of America is a dynamic cluster,” he says. “But equally, I was in a restaurant there with senior execs from Boeing 14 > EQ Magazine | summer 2013

discussing how they were setting up a new facility in North Carolina, and, so that the new people could learn how to plug into bright ideas coming from universities, they said they would be sent to Sheffield to see how Boeing did it there. There is also a real buzz about Israel. It’s incredibly good at start-ups and ideas coming from its universities.”

But innovation is a risky business and the economic climate has made most businesses more cautious. “One of the biggest problems has been that the venture capital business start-up model has suffered in the past five years,” says Willetts. “Part of the problem is that in the bubble in the beginning of the last decade, people got their fingers burned and then with the crash, finance became much harder to track. This route has been much harder for companies to navigate in the past few years.”

But his message to business is to be bold. “I would like to see companies spending more of the cash piles they are sitting on with R&D and that’s why we are looking at how we can promote co-investment,” he says.

“Investing in R&D is the future. Close to wherever you are situated, there are more smart people in the network of universities, who can do more to help tackle the challenges you face than you realise. We are trying to make universities as accessible as possible, so try something really simple like renting a bit of kit rather than buying a piece of expensive equipment, testing new material in the labs of a local university, or using the expertise in the computer department to help with software problems. The more that we can build this type of connection, the better.”

GRILL FOR 60 SECONDS What has been the high point of your career so far?

This job.

And the low point?

Hoping to find a seat in the 1987 election and not getting one.

You’re married to an artist, are you creative yourself?

She is so creative in painting, in art and in dress design that it is enough for two.

How do you relax?

Swimming, cycling or being my wife’s painting assistant.

Who is the most innovative politician you’ve worked with?

Margaret Thatcher.

What would you do if you weren’t in politics?

I think I’d be a writer.

What would you like to do when your time in Parliament is up?

Have a good long break on Cape Cod and write a book.

If you could pick the brains of a historical figure for one hour, who would it be?

Adam Smith.

What was the last thing you cooked?

I do a Sunday morning fry-up breakfast, so, Sunday brunch.

Where is your favourite place on earth?

It would have to be my constituency (Havant), of course.

For company secretaries his message is to be aware of the challenges and the opportunities that presents. “I still think British business isn’t as aware as it should be of the cyber security threat.

Any company that has precious IP has to assume it is a target. However, equally, Britain is now very innovative in the development of cyber security products, with strong cyber security businesses.

In the company secretary’s audit of risk exposure of the company, they should have cyber security high on their list as a challenge but also an opportunity. There are great businesses they can get advice and services from – a company that is clearly cyber secure is one that other companies are much more comfortable to deal with.”

As someone who works closely with UK scientists and academics, he has been exposed early to plenty of cutting-edge technology. So, where will our next worldchanging advances come from? Willetts says smart metering, with different appliances connecting to each other and linking to the Internet, could change how we live. He also identifies 3D printing and autonomous vehicles as fields where British innovators are making huge progress.

“One possibility is that technology develops in a way completely different than envisaged,” he says. “I’m still waiting to commute to work on a personal jet booster pack as operated by James Bond in Thunderball. There could well be technologies which we haven’t considered.

“I am optimistic. With our strong public support for R&D and new measures for converting discovery into commercial opportunities we can achieve a lot. We can help new businesses grow. We can be the world’s R&D lab. We can indeed be the best place in the world to do science.”

::CURRICULUM VITAE David Willetts was appointed Minister for Universities and Science in the Department for Business, Innovation and Skills in May 2010. His responsibilities include science and research, higher education, the UK Space Agency and innovation. He is the Conservative MP for Havant in Hampshire.

Education: King Edward’s School, Birmingham and Christ Church, Oxford, where he studied philosophy, politics and economics.

including Shadow Secretary of State for Trade and Industry, Shadow Secretary for Education and Skills, and Shadow Secretary for Innovation, Universities and Skills. He has also worked at HM Treasury and in the Number 10 Policy Unit.

In politics: Elected as the Conservative MP for Havant in 1992. He served as Paymaster General and then in the Shadow Outside politics: Visiting Cabinet in a range of roles, fellow at Nuffield College,

Oxford. Governor of the Ditchley Foundation and a member of the Council of the Institute for Fiscal Studies.

He has written widely on economic and social policy.

In 2011 he published a book, The Pinch: How the baby boomers took their children’s future – and why they should give it back.

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IMAGINE THAT

THE HEAD-MOUNTED BIRD FEEDER

Patented: December 1999 Some people really like to get up close and personal with nature. If you would like to encourage birds of the forest to roost about your person, this is the product for you. This bird feeder hat allows you to hang nut-laden poles on either side of your head to entice your feathered friends. Be careful though – sudden head movements may bring the whole thing crashing down about your ears.

SEESAW FOR ONE Patented: March 2005 For the only child, the odd one out, or that kid who simply doesn’t have any friends, the seesaw is no longer offlimits. This seesaw for one combines all the exciting highs and lows of traditional seesawing, but using a spring-loaded hydraulic air piston instead of a friend.

BACK TO THE DRAWING BOARD INNOVATION ALONE IS NO GUARANTEE OF SUCCESS, AND HERE’S THE UNPRACTICAL PROOF Every budding Thomas Edison knows that innovation can sometimes be a bit hit and miss, and not every concept makes a smooth transition from the drawing board to the finished product. Some inventions are nothing more than a triumph of man’s imagination over reality, whatever the costs to practicality, marketability or usefulness.

Here are five innovative but bizarre concepts that made it to patent but have yet to make a big splash in the marketplace – for obvious reasons.

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PAT ON THE BACK MACHINE Patented: September 1986 Good job inventing things! You’ve had a really innovative day! But unfortunately no one is around to congratulate you. Never fear, here is a pat on the back machine using a simulated human hand on a pivoting arm to help you feel validated. Genius.

USHUAIA.PL

LIGHT BULB CHANGER

THE WORLD’S MOST PROLIFIC INVENTOR

Patented: December 2004 How many inventors does it take to change a light bulb? One, apparently.

One inventor, one hugely complicated design and one patent. This device will detect a burned-out light, remove it and replace it with a new bulb without human intervention.

Dr. NakaMats is the world’s most prolific inventor, with 3,200 patents (and counting) to his name.

GREENHOUSE HELMET

Patented: August 1986 This headgear gives you your own personal biosphere, surrounded by tiny plants on little shelves. The enclosed dome will make sure the oxygen from the plants goes straight into your lungs. The only way to contact the outside world is through the attached microphone and speakers. Privacy at last!

Since inventing the Automatic Center of Gravity Stabilizer at the age of five, nothing has slowed down his creativity.

Among his most famous contributions to the world are the floppy disk, magnetised condoms and a self-defence wig. There are ‘Dr. NakaMats Days’ in several cities around the USA, and Dr. NakaMats has also been appointed a US Sheriff. This President of the International Invention Society is a true inspiration to any aspiring innovator.

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DOING THE RIGHT THING FOR SHAREHOLDERS

PORTRAIT BY ANTHONY UPTON

An innovative shareholder strategy at M&S has received admiring glances from other listed companies. Assistant Company Secretary Anthony Clarke reveals why

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SHAREHOLDER STRATEGY

P

op into the waterside M&S Café at London’s Paddington Basin, and the set-up is fairly conventional. You choose a cake and a coffee; they give you what you’ve ordered.

Yet several storeys up in the adjacent M&S HQ, Assistant Company Secretary Anthony Clarke is troubled by a different kind of dining experience.

“Imagine a restaurant that brings you your food before you’ve had a chance to order from the menu,” he says. “Imagine a restaurant that doesn’t even give you a menu – it just guesses what you want. Unless it was an amazing restaurant, it wouldn’t last very long. Yet that’s the way that many companies manage their shareholders.

Everybody is sent the same paper documents, without necessarily knowing whether individuals might prefer to receive more detailed and more frequent information, much quicker, online.

Sending everything by paper is rather like throwing mud at the wall and seeing what sticks.”

M&S is a brand built on trust and yet for more than 125 years, it has taken some very innovative approaches to food and fashion retailing – such as the evergreen Dine In For £10 offer.

Similarly, a steely thread of innovation runs through the outlook of Anthony and his colleagues in the M&S Group secretariat. In recent years, they’ve been turning heads in CoSec circles by working with Equiniti to drive best practice in shareholder management.

It all began with the realisation that the business needed a ‘shareholder strategy’ – i.e., being proactive in managing the share register rather than merely responding ad hoc to regulatory requirements and shareholder enquiries.

From this philosophy, Anthony and his colleagues have given M&S shareholders an increased quality and choice of communication, encouraging around 24,000 investors to embrace the online service rather than rely on an occasional letter. M&S has also been particularly active in working with Equiniti to reunite ‘lost shareholders’ with their assets – of which more later.

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SHAREHOLDER STRATEGY

It’s this drive for positive change that has encouraged Anthony to stay with M&S. Starting his career in investor relations at Makinson Cowell, he arrived at M&S on a three-month temporary contract. That was eight years ago.

Working closely with fellow Assistant Company Secretary Andrew Green and Secretariat Assistant Paul Rolling, they are the team supporting Group Secretary Amanda Mellor. “The job is what you make it,” he says. “You can settle for the status quo or you can find more efficient ways of doing things and with a small team we need efficiency. Many companies are reluctant to be the first to change an aspect of shareholder communication – they want someone else to go first.

Ultimately, we’re dealing with people and much of it is common sense. It’s in everyone’s interest to simplify the system. The shareholders have a vested interest in your business doing well so why waste time and money on poor communication?”

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A key element of the M&S shareholder strategy is the appreciation that many of its shareholders are existing or potential customers. “When we received a letter of complaint from a shareholder, it almost always said they might not shop with us any more,” says Anthony. “That’s something you have to respond to.”

M&S has since strived to talk to all its shareholders as customers, providing opportunities such as discounts, which both strengthen the shareholder relationship and generate extra sales.

But for Anthony and his colleagues, dematerialisation remains a big driver – particularly in terms of replacing cheques

with bank transfers and replacing paper comms with e-comms.

“We have thought very carefully about how people react when an envelope arrives,” he says. “How do they open it? What do they see first? What might they miss? And we’ve worked hard on the wording, encouraging people to give us their bank mandate details to save having to post out cheques. It’s been working, there has been a huge increase in returns.”

Anthony is determined to help more shareholders recognise the benefit of moving from paper communication to online correspondence. “If our

“It’s in everyone’s interest to simplify the system.

The shareholders have a vested interest in your business doing well so why waste time and money on poor communication?”

shareholders stick with paper comms, they only receive our annual statement,” says Anthony. “But with e-comms, we send all the trading statements and the results throughout the year. Anyone giving us an email address has the opportunity to keep better informed.

About 12% of our 200,000 shareholders have signed up to receive all information online. It’s a pretty good figure compared with the market.”

In reality, a much higher proportion of M&S shareholders are probably open to moving online, but have never got round to it, due to the registration process.

“I think many of the letters we send out go on the ‘do it later’ pile,” says Anthony.

“The challenge is to word the letter in such a way that it goes on the ‘do it now’ pile.”

The style of writing is clearly important – yet often overlooked by listed companies. “Not all shareholders are versed in the terminology of investments so we are very clear about writing everything in plain English,” says Anthony. “This has been carried through to our employee share plan documentation; we’ve stripped out all the jargon, it’s just much more understandable now.”

Anthony picks out another example – a leaflet on boiler room scams from the ICSA and FCA supplied for circulation to shareholders. “It didn’t stand out enough, and people weren’t reading it,” he says.

Working with Equiniti, M&S wrote its own leaflet to create something that was relevant, easy to read and wouldn’t go straight into the bin.

Listening to Anthony, ‘waste’ is a recurrent theme. He hates it, and was concerned by the issue of lost shareholders losing the right to their unclaimed dividends after 12 years.

“This amounts to a lot of money. We made the decision to clean up the register and be the first FTSE company to actively forfeit shares (where a shareholder has not cashed 12 consecutive years’ worth of dividend payments, their shares and unclaimed monies can be forfeited back to the company). Funds raised from the sale of these shares would then go to good causes but, before that point, we should do everything possible to find these people and reunite them with their dividends and shares. We’ve tried hard over the years to do this but it is challenging – after all, we’ve been listed since the 1920s.”

:: M&S – A POTTED HISTORY Enterprising Belarusian immigrant Michael Marks (top left) opens a ‘bazaar’ in Leeds where every item is priced at a penny.

By the end of WWII, 100 stores have been bombed, with 16 entirely destroyed.

1884

1945

Marks goes into business with Tom Spencer (top right), an astute local businessman.

Following a period of rapid expansion, Marks & Spencer has 145 stores.

By the turn of the century, the pair has established 36 Penny Bazaars and 12 high-street stores.

The company’s product mix begins to distil into the familiar blend of food and clothing that exists today.

1894

1900

Daring designs and clever use of man-made fabrics put Marks & Spencer at the forefront of fashion talk.

1955

1915

1930

A revolution has taken place in food retailing. By now, convenience food is being sold in 100 stores.

1973

Following a memorable ad campaign, sales of the M&S Melting Middle Chocolate Pudding soar by 3,000%.

2006

M&S Bank adds to its financial portfolio by launching its first current account.

M&S relocates its Company Archive to Leeds and opens it to the public.

2012

M&S enlisted the expertise of a specialist asset reunification company – which has subsequently become part of the Equiniti Group – with outstanding results. In recent years, Equiniti has tracked down many M&S shareholders who had moved without changing their address details or unwittingly inherited shares from deceased relatives. “Just this week I spoke to the son of a deceased shareholder who had shares and unclaimed dividends amounting to £20,000. I spoke to Equiniti and they found the father on four other share registers.”

In cases where shares haven’t been claimed, the first batch of money was used to fund the M&S Company Archive that brings the company’s history to life for the general public. “Lost shareholders are still playing an important part in

supporting our history by funding the Archive,” says Anthony.

And if someone gets in touch after their shares are sold? M&S is under no obligation to remunerate them but, in reality, that’s what it does. “In every respect of this, we’ve been trying to find these people and give them their money,” says Anthony. “And we’ve not received a single complaint.”

Anthony, his colleagues at M&S and Equiniti (which works closely with M&S on every aspect of managing the share register) are keen to share their ideas with other businesses. “The more that other companies do these things, the more you build up a momentum for change,” says Anthony. “The time will come when many of the changes we have helped to introduce are standard practice.” www.equiniti.com > 21

SIX STEPS TO SUCCESSFUL INVESTOR ANALYTICS Knowing and monitoring shareholders through accurate share register analysis is paramount for any company looking to ensure a successful investor relations programme and AGM campaign.

But identifying shareholders can be a minefield. A company’s share register is largely made up of a list of nominees who hold shares on behalf of multiple beneficial owners and overseas custodial banks and brokers. Rob Hemming, Head of Relationship & Business Development – Investor Analytics, shares his expertise.

USE A CONTACT MANAGEMENT SYSTEM

KNOW YOUR LEGISLATION The custodian chain is often long and complex: multi-managed funds make it difficult to identify the key investment decision makers, and stock lending creates a confusing picture, especially if the borrowed stock is used for a hedge or to create a derivative. The legislative disclosure provisions contained within Section 793 of the Company’s Act 2006 holds a company’s right to identify its beneficial shareholders and the financial institutions making the investment decisions on behalf of these holders. The legislation provides you with a very transparent view of a register without the reliance on publicly disclosed data. It will help you accurately identify shareholders and understand the style of investor and geographic make-up of the register.

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UP-TO-DATE REGISTER REPORTS ARE KEY Companies need to contact those who own their shares at various times throughout the financial calendar, but they can’t do this if they don’t know who or where those shareholders are. Regularly updated register reports allow you to have good communication not only with the board of directors but across the shareholder base. It may provide opportunities for early dialogue with new investors, whether they are strategic or hostile, and discussions with any current shareholders who are building a stake in the company.

An effective contact management system is crucial to those managing communication with institutional contacts and for generating meeting notes and history.

An essential suite of services should include: • Buy and sell side contact information • Contact history • Investor profiles • Briefing books and itineraries • Blast emails.

Combined with the share registrar analysis reports, information from the system can then let you chart shareholding against share price and meetings, to show decisions made by investors in relation to share price performance and engagement with the company.

IDENTIFY WHO HOLDS THE VOTING RIGHTS Share issuers can become separated from share owners, who have the economic interest or hold the voting rights. Being able to identify not only who owns the stock but also who holds the voting rights is vital when it comes to your AGM. Key questions that should be considered are: • Is the decision with the investment strategy maker or corporate governance department/officers?

• Who can influence voting?

• Are there activists on the register, or are there any investor coalitions building?

A good campaign should increase support for management and increase voting turnout at the general meeting.

You can achieve this through an institutional proxy call campaign and by matching votes against the latest shareholder analysis to understand how investors have lodged their votes prior to the AGM. This will include monitoring delivered votes against intentions gleaned, reporting such findings in a concise timely manner and having the ability to change a vote should the situation arise.

USE INVESTOR RELATIONS (IR) TO TARGET THE RIGHT PEOPLE Current trends indicate that companies are now employing leading IR professionals, who are supported by their own in-house IR team, to organise investor road shows to meet potential and existing investors around the globe.

Knowing your shareholders raises questions that should include: • Which current investors could buy more?

• Who is not investing yet but could be?

• Who holds shares in the peer group?

Carrying out weightings analysis compared against the sector and market will answer these questions, thus allowing active investor relations officers to meet the right people and decision makers.

GETTING THE RIGHT SUPPORT As more and more investors hold their shares through nominees, custodians, sub-custodians and investment vehicles, peeling away the layers to identify a company’s shareholders is all in a day’s work for Equiniti’s Investor Analytics team. No two days are the same across the financial markets, so when circumstances change we have all the tools and expertise to advise and react to any market activity. We have direct access to a company’s register and see settled trades and any increase in daily volumes traded first-hand.

This – coupled with our wealth of corporate broking and investor relations experience – ensures that we deliver timely and accurate reporting across the Shareholder Analysis and Investor Relations space.

For more information on Investor Analytics, please contact your Relationship Manager or Rob Hemming on 0207 469 1884.

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FEATURE

MY EQUINITI: FIONA DE ANTONIS

It’s all about the customer for Fiona De Antonis, who believes continuous improvement is the way forward to deliver the best for our business and our clients.

I moved into my current role in March of this year, but prior to that I was a Project Manager with the Operational Development team, where I focused on successfully delivering a range of initiatives, including Share View Enquiries and the Share Valuation Service, amongst other projects.

I’m now Head of Operational Excellence and not only is it a new role for me, but it’s a new position in the business.

The Operations vision is to deliver the expectations of our customers by providing an exceptional quality service that actively promotes continuous improvement and innovation and provides a solid foundation on which the Equiniti business can grow. I support Equiniti to achieve this by working closely with the Operational Management Team to enhance our services, whether we are dealing with a shareholder, an employee or a client.

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A really important focus in my new role is continuous improvement. All of the positions I’ve held in the past have had a continuous improvement and quality element to them – these areas are really important for providing the best for our customers. Continuous improvement involves us identifying the root causes of any problems we might have and putting processes in place to ensure they don’t happen again. A big part of my new role is embedding the continuous improvement culture throughout the business. For continuous improvement to be the most effective, everybody needs to be actively involved by putting forward their ideas on how to make things better.

Innovative thinking is also really important in improving things. Innovative thinking is encouraging the process of arriving at solutions by combining insight, ideas and methods in new ways. Many people believe that innovation is only about a new product or a new piece of software, but it is also about looking at what

we’re already doing and finding new ways to enhance our service. If we can continue to show our customers that we are a strong, innovative company and we excel at delivering the best for our customers, then undoubtedly it will continue to help Equiniti going forward.

Three quick questions What’s the best piece of advice you’ve ever been given?

What are your passions outside of work?

Always believe in yourself.

If you can master that, you’ll be amazed at what you can achieve and how successful you can become.

My family is my biggest passion. I have three very sporty children, so a lot of my time is spent supporting them in their endeavours.

As a family, we love to ski and hit the slopes as often as we can.

I also love reading.

If you didn’t work in operational excellence, what would you be doing?

Something literacy related.

I’d love to see people develop the same love for reading that I have.

PORTRAIT BY ANTHONY UPTON

I moved to the UK from Canada in 1990 and I feel very much at home here.

I joined Equiniti in 1997 as a Quality Team Analyst and was instrumental in re-launching the Service Feedback procedure. My career at Equiniti has been varied – I’ve had the opportunity to undertake a number of different roles, including Operational Project Manager and Business Design Consultant.

“Always believe in yourself.

If you can master that, you’ll be amazed at what you can achieve and how successful you can become.”

FEATURE

www.equiniti.com > 25

COMPANY SECRETARY PROFILE

“It’s both exciting and a privilege to be part of a company whose products touch our everyday lives in one way or another.”

Company Secretary and Group General Counsel David Gibson talks to EQ about his role at leading global consumer packaging company Rexam and the importance of innovation.

take on the job I had been looking for in a company that I had grown to love. The corporate legal background has been a significant help since becoming company secretary, not only in tackling the legal aspects of the role but also in the related corporate governance workload that has increased substantially in the last 10 to 15 years and continues to evolve. Corporate governance, regulation and law are areas that are closely aligned.

Tell us a bit about your role with Rexam.

You’ve been at Rexam for a long time. What is the biggest change you have seen at the company?

I’ve been Company Secretary at Rexam since 1996, having originally joined the company in 1989 (when it was Bowater) as lawyer to the European operations. My current role is typical of most CoSec roles for a FTSE 100 company, although it has evolved over the years and in addition to CoSec and the group legal function, I also have responsibility for group communications and corporate affairs. I sit on Rexam’s executive leadership team, which is the management team sitting directly beneath the board. It’s been hugely rewarding to have the opportunity to work with the shareholders, the board and management teams throughout the company’s global operations.

What attracted you to the post?

I originally came to Rexam as a twoyear qualified corporate lawyer because I realised at an early stage that I was keen to practise law in-house, having found that life in a city-based private practice kept the younger lawyers too distant from the client and the clients’ business and operations. After five years with Rexam, I started looking for opportunities to progress to a more senior in-house role and realised that becoming company secretary was a necessary part of achieving this. It was at this point I got a lucky break when the CoSec and general counsel role at Rexam became vacant. The timing was extremely fortuitous and I was able to 26 > EQ Magazine | summer 2013

Rexam was originally a global paper company called Bowater. Over a period of 24 years, there has inevitably been considerable change. We have revised our portfolio of businesses a number of times during those years. The continual stream of corporate activity has been a constant source of challenging and rewarding work for the CoSec and legal departments.

I have an amazing team of people supporting me and excellent external advisers, without whom the tasks would have been significantly less enjoyable!

Rexam has become considerably more focused, which is a huge transformation from the conglomerate that existed by the mid-nineties.

How has Rexam fared during the global economic downturn?

1999 to 2007 was a period of large acquisitions and disposals for Rexam as we pursued our consumer packaging strategy. The global economic downturn in 2008–9 was a challenge for us in the same way that it was for many others and the board and senior management had to take some serious and at times unpalatable decisions to keep the company on an even keel. Since 2010, there has been a period of clear and sustained recovery as we delivered on our promises. You only have to look at our share price over the last year to see how strongly it has turned around.

What are the key strengths of the business?

Rexam is essentially a manufacturing company. 90% of our sales come from beverage cans. That doesn’t mean to say that the other 10%, which is healthcare packaging, is not important – it’s just separate. Our job is to make high-quality packaging as efficiently, profitably and sustainably as possible.

Our strength lies in our relentless pursuit of operational excellence in what is a high-speed, high-precision manufacturing process. Our global presence is also a benefit for us and our customers. We have 67 plants across the world and we see further potential for growth in emerging markets. Another strength is the strong customer relationships we have built up over the years. We make drinks cans for some of the most famous names in the world. And finally there is, of course, the skill, commitment and enthusiasm of our people.

What are your current priorities?

Our strategy is very clear: by focusing on beverage cans, we will drive the business forward and maintain the financial strength that we’ve built over the last three years. We are very much focused on cost control, cash generation and return on capital.

Management and the board have clearly communicated these priorities externally – and this has done much to bolster our credibility in the marketplace.

What is the most important lesson you have learnt within the role of company secretary?

Probably that it is hugely valuable to build strong relationships with those around you – both internally and externally. It is those relationships that play a key part in delivering results for the business as a whole.

DAVID GIBSON REXAM CV

1985-1989 Corporate lawyer, DLA (formerly Alsop Wilkinson) 1989-1996 European Legal Counsel, Rexam PLC (formerly Bowater PLC) 1996-present Company Secretary and Group General Counsel, Rexam PLC

What value have you gained from your relationship with Equiniti?

PORTRAIT BY ANTHONY UPTON

We’ve worked with Equiniti as long as I’ve been at Rexam. It has been a strong relationship and one that has developed particularly well over the last few years.

As Rexam has shifted its priorities, Equiniti has grown and moved with us.

A good example of this is the B Share Return of Cash Scheme that we did in early 2013. It may have been more complicated than our shareholders would ideally have liked but the delivery on Equiniti’s part was seamless.

The theme of this issue of the magazine is innovation. How important is it for a company secretary to think innovatively?

Whatever part of the business you’re involved in, there is an opportunity to

innovate. I think innovation needs to be interpreted quite widely. It is not only relevant to those working in product and process development; it may simply be coming up with a more efficient way to work. Rexam is dedicating time and resources to innovation and it is an absolute key area for us. Our innovation extends across the whole company from the manufacturing processes to the sustainability of our products.

If you were able to choose a completely different career, what would it be?

It would have to be either a landscape gardener or an anthropologist. I’m a keen gardener in my spare time and anthropology is a subject I’ve always found fascinating. I should have studied it at university but I didn’t have the confidence to choose a less vocational

degree. I’ve been encouraging my children to study it, but they don’t seem to be taking me seriously. One of them has even threatened to study law!

But on a serious note, it is encouraging that they appreciate how well my career choice has worked for me.

What is your favourite way to relax after a hard day’s work?

A wide range of theatre, music and opera, combined with good food and wine, keeps me endlessly entertained.

If you could invite three guests to dinner (living or past), who would they be?

It would have to be two dinners: the first with Boris Johnson, William Blake and Oscar Wilde, and the second with my maternal grandmother and my sons. www.equiniti.com > 27

MASTERCLASS

T

he dictionary defines innovation simply as the introduction of something new or different. If that is the case, by default nearly every organisation on the planet is innovative.

In reality, the dictionary definition is nowhere near as honed and defined as it needs to be to describe modern concepts of innovation in business. Companies should remember that innovation is applying creative thinking and different approaches to develop something new that has never been seen before, or to adapt what already exists.

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What follows should be a question of how that thinking is then applied in order to drive value – typically for the customer.

Innovation has always been a core feature of business, but it has never been talked about quite as much as it is today. Now, not only is it recognised that innovation is required for growth, but innovation is even talked about in the context of survival for businesses. So for businesses to innovate, and in turn create longevity, they must be pragmatic – this is the most important part of innovation.

Companies need to move away from big PowerPoint presentations, analysing innovation in the context of Apple and Google, and rather ask themselves these key questions: what does innovation

mean for our organisation, how do we align it to our values and strategy, and what do we have to do to drive that innovation? Those questions are key to establishing a context from which a company can then create a commercial return. If you talk about innovation in that context, you then start to blend the dictionary definition with these key points: why are we coming up with something different or what problem are we solving, how does it benefit the customer, how does it benefit us as an organisation and what do we get out of it?

If you can answer all of these questions, then you can legitimately class what you have done as something innovative.

The most important thing when looking at innovation is the ability to execute,

Innovation has become a business buzz-word in recent years, but when organisations try to innovate, should their employees be encouraged to let their creative juices flow freely, or should innovating come with its own set of rules? Cris Beswick, a strategic advisor on innovation, shares his expertise.

Strategy + Creativity = Innovation ‘The smartest guy in the room is the guy that surrounds himself with people that are smarter than he is.’ otherwise you’re just inventing, because no idea, however great, drives a business forward if it sits on the shelf.

You can’t learn to be innovative per se, but you can learn to be creative, to look at the world in different ways and consider different perspectives in order to solve problems and challenges.

Regardless of roles or responsibilities, every organisation is a collection of people, and what all of those people have – whether or not they choose to acknowledge it – is the ability to be creative. We were all creative as children, but it tends to dilute as we move through education and into the corporate world. The reality is, creativity is an innate human quality so what organisations can teach their employees and what can be learned is how to increase your ability to be creative and increase your creative skills. What this does is helps us to look at problems in a new or different way, and look at them in a really creative way to help us come up with different possibilities and ideas.

If we can then apply these commercially

and bring them to fruition, then we can label them innovation.

Without question, every organisation should have an innovation strategy.

An innovation strategy allows an organisation to do a number of things.

It allows the organisation to look closely at where it is today, where it wants to be in the future and what it needs to do to achieve those goals. An innovation strategy will outline how this plan will work alongside the business’s other goals to help it achieve success.

We plan for every other function, so not having a thorough innovation strategy is leaving things to chance. The consequences of not having a dedicated strategy mean that innovation activity will be taking place in an organisation that is uncontrolled and isn’t aligned to the core business strategy and values.

This can also be costly, hard to measure and in most cases has a negative effect on employee engagement and the organisation’s culture.

Part of being a good innovator involves asking questions: could our latest product be better? Is everything we are doing as good as it could be?

What’s next? These are all questions typically asked by people that are good innovators. You should also make an effort to build connections. The more people you know and have access to, the more knowledge you will have access to.

You generally find that great innovators have large networks of people they can draw on for support and inspiration.

There’s a great phrase that’s always good to bear in mind when you’re talking about innovation. ‘The smartest guy in the room is the guy that surrounds himself with people that are smarter than he is.’ As soon as you believe you have all the answers and know everything, you tend to stop questioning things. That is when innovation can grind to a halt. Always ask questions and always believe that there is something still to learn.

Cris Beswick is one of the UK’s leading thinkers and strategic advisors. He supports companies across the globe in developing innovation strategies that lead businesses to success. You can find out more about Cris by visiting his website: www.crisbeswick.com. www.equiniti.com > 29

WE TAKE A LOOK AT THE LATEST NEWS FROM ACROSS EQUINITI FEATURE

WHAT’S NEW AT EQUINITI? NEW CHIEF FINANCIAL OFFICER Martyn Hindley is the newest addition to Equiniti’s Executive Management Team. Appointed to the role of Chief Financial Officer (CFO) in December 2012, Martyn was previously CFO of Emap, a private equity-owned international business-tobusiness media group.

Prior to this role, he worked for companies including PwC, Blenheim Group PLC and Northcliffe Media (part of the Daily Mail Group). In his former positions, he has been instrumental in driving change and leading complex

transactions, and now Equiniti will benefit from all his expertise.

“It is a privilege to join such a strong, motivated team who are focused on delivering outstanding client service,” says Martyn. “Equiniti is well placed to grow strongly

A single brand for our pension businesses Our specialist pension businesses have been rebranded. Xafinity Paymaster and Xafinity Claybrook have been renamed Equiniti Paymaster and Equiniti Claybrook – a move to reposition the major operations of the Equiniti Group under a single brand. This also involved the launch of new websites for both businesses.

“Our clients increasingly use a mix of services from across the Group,” explains Equiniti’s Chief Executive Wayne Story. “By bringing these together, we are able to provide greater support for the growing complexities faced by our 2,000 clients.”

Equiniti’s Pension Solutions division constitutes over 40% of the overall Group, with Equiniti Paymaster and Equiniti Claybrook supporting a combined 7.3 million pension scheme members in the UK. For more information visit the new websites: www.equinitipaymaster.com and www.equiniticlaybrook.com.

30 > EQ Magazine | summer 2013

Equiniti is the IPO market leader

“It is a privilege to join such a strong motivated team who are focused on delivering outstanding client service.”

with innovative new products and services to delight our customers. I have joined at a very exciting time and am looking forward to participating in the challenges and opportunities that lie ahead.”

Supporting G-Cloud Cloud computing has transformed the IT landscape.

The Government is ensuring it doesn’t get left behind with the introduction of G-Cloud, an initiative that will change how the public sector procures and operates its IT services, with Equiniti as a key supplier.

G-Cloud allows the procurement and implementation of software solutions in short timescales and without a big capital investment – it is based on a monthly ‘pay as you go’ model.

The Government hopes this will encourage a reactive marketplace and deliver flexible IT systems.

As an approved supplier, Equiniti is supporting the Government’s drive towards cloud technology.

Equiniti has long been regarded as a trusted provider in this area, with more than 25 years’ experience.

“We have the capability to outsource a full IT infrastructure in terms of providing servers, data centres, cloud solutions and all necessary software applications to fulfil a client’s IT needs,” says Nigel Farr, Director with Equiniti Technology Solutions. “We are now starting to implement Private Cloud solutions for customers who want to achieve the benefits of cloud computing without compromising their information security and compliance approaches.”

The IPO market has benefitted from a significant increase in activity in the first quarter of this year. The funds raised — over £1.25 billion so far — have already surpassed 2012’s total.

Equiniti has also been appointed on all five IPOs that it has pitched for so far this year and it is great to welcome new clients, including insurance company esure, cabling products maker HellermannTyton and house builder Crest Nicholson, to Equiniti.“This is a fantastic result and validates the way we work with our listed companies, both in the run-up to listing and post transaction,” says Paul Matthews, Managing Director, Corporate Markets. “The months in advance of the IPO can be fraught – too much to do and too little time. We have the breadth of experience and the team to help companies through this challenging period.”

Inspiring communication There have been lots of exciting developments for Equiniti’s communications. Our ezine has a fresh look with new regular sections. There’s also the Big Question. Arriving in your inbox from June, we provide expert opinion on topical issues.

And our newest title, Source, is a business magazine that focuses on outsourcing.

If you would like a free subscription to Source, please email source@equiniti.com.

For more information on any of the above news stories please contact your Relationship Manager.

FINE FIGURES

EQUINITI’S YEAR IN NUMBERS

92%

2

9

12,6

trainee hours

in the Contact Centre

8

training workshops have been completed within the Contact Centre

5.4 million items have been scanned to digital format

98% were answered against a target of 95%

1,090

dividend tasks were undertaken

22 million

mail packs enveloped and printed

4

decrease in volume of new complaints since 2011

by our Contact Centre in 2012

£33,600,000,000 in value of cheques printed

On average

88%

d ivi of d

of calls

2 million calls were handled

en

ds a

aB ACS

of 71,247 callers rated the Contact Centre ‘Very Good’ or ‘Good’ in a customer survey

vi re now paid

2.6m TRANSACTIONS PROCESSED IN SERVICE

BY THE CUSTOMER PROCESSING TEAM

www.equiniti.com > 31

DID YOU KNOW? Equiniti currently offers Flex to over 70,000 employees

As a market leader in employee benefits, Equiniti already manages over 4 million share scheme, pension and flex accounts.

We aim to deliver tailored solutions for your beneďŹ ts package, bringing everything together in one, fully transactional, beneďŹ ts portal, which helps promote better understanding and employee engagement. www.equiniti.com

For more information on how Equiniti can help with your Total Reward and Flex needs contact: Stuart Bennett 01903 833297 Stuart.Bennett@equiniti.com