Equniti Magazine 03 ­ Winter 2010

magazine > winter 2010 > Issue 03

INSIGHT + INFORMATION + LEADERSHIp

entrepreneurs

‘‘Britain’s got talent’’ Why ‘Dragon’ Peter Jones has set up an Enterprise Academy

inside>

STUART ellen Striving for service excellence page 4

succession planning An expert's guide to future-proofing page 20

Foreword words from the front

flashback

the future starts here A new year, a new decade – 2009 was a difficult year for UK business and 2010 promises its fair share of ups and downs too. But whatever happens, Equiniti will be here to provide the essential support you need.

John Parker Managing Director, Client Services, Equiniti

I am delighted that Wayne Story has been promoted to CEO of Equiniti. I have been working closely with Wayne over the past year on a wide range of initiatives to enhance our service offering and he provides an update of his aims in his new role on page 26.

To keep being successful in business, it's vital to evolve and innovate. Our focus over the past year has been very firmly on customer service – on ensuring that everything we do is geared towards your needs and getting it right first time. That is why we have developed our state-of-the-art Sirius administration system and invested more than £1m in our Contact Centre.

It also explains why we have extended our portfolio with the acquisition of ICS Consulting and David Venus. Together with our existing services they offer a package of compelling commercial benefits to your business – in good times and bad.

I wish you a very successful year and please do get in touch if you have any ideas or feedback.

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

1 > Equiniti Magazine | winter 2010

August The FSA doubles its borrowing to help cover the cost of the financial crisis.

September G20: world leaders sign up to a new economic charter at the Pittsburgh summit in an attempt to strengthen international economic co-ordination.

contents inside this issue

G;A;TCH? 9 RDIO@M -+,+ 9 DNNP@ +.

DINDBCO & DIAJMH<ODJI & G@<?@MNCDK

ENTREPRENEURS

‘‘Britain’s got talent’’

Equiniti magazine number 03 Cover photograph

by Tom Stockhill

Why ‘Dragon’ Peter Jones has set up an Enterprise Academy

INSIDE>

NOP<MO @GG@I ?`^UbUZS R[^ _Q^bUOQ

QdOQXXQZOQ K<B@ /

NP>>@NNDJI KG<IIDIB -Z Qd\Q^` _ SaUPQ `[

Ra`a^Q \^[[RUZS K<B@ --

regulars 4 First Person

Stuart Ellen on first-class service

6 In the know

Peter Swabey tackles the combined code debate

7 Postcard from Westminster The impressive opening of the Atlantis hotel in November, before Dubai World ran into debt problems

John Thurso presents the case for MPs with business experience

25 Question Time

Tim George's secret past as Reggie Mental

October MPs are ordered to repay expenses upon their return to parliament after the summer break, following Sir Thomas Legg’s review.

November Fears rise among investors over the financial stability of the emirate, following government-owned investment company Dubai World’s request for a six-month delay in repaying its debts.

December As a result of the Walker Review, it’s announced that banks will have to declare all employees who are earning more than £1m per annum.

26 Snapshots Wayne Story, CEO, shares his plans for 2010

Features 8 Euroclear & T2S

John Heaton explains the latest developments

10 Peter Jones

The straight-talking 'dragon' on enterprise

13 A helping hand

January The UK is plunged into the worst period of winter weather for more than 20 years.

Insurance specialists RSA put the cost to the UK economy at £690m per day.

How the FSA can ease staff money worries

14 Sharesave & SIP The Centrica campaign

16 CoSec profile Michael Robinson

18 David Venus

How can they help?

20 Who's next?

Succession planning

23 The big numbers Lloyds Banking Group

24 Sharegift

Everyone's a winner

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.

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

Editorial Director: Fraser Allen Creative Director: Eric Campbell www.whitelightmedia.co.uk Members of the APA & PPA

www.equiniti.com > 2

1st

person: Stuart ellen

What positions have you held during your career?

I joined Lloyds TSB straight from school and I’ve held a variety of roles. I started in retail banking and worked at the Stock Exchange branch through the 'Big Bang' in 1986 and the 'crash' in 1987 – my first experience of the securities markets!

Then I focused on the Lloyds corporate banking area, dealing with major FTSE companies in relationship management and sales roles. I’ve been part of the Client Services team within Equiniti for several years now and the primary roles I’ve held include heading up the business development team and the marketing function.

With 30 years of experience under his belt, Director of Client Services Stuart Ellen is well-placed to ensure that colleagues across the business put the client first Portrait: graham jepson

the desire among everyone involved in making that happen to keep focused on this shared goal of delivering service excellence.

Analytics. We are convinced this will deliver commercial benefits to our clients.

What will be your key priorities in 2010?

We have taken a number of wide-ranging steps to improve our service. One example is the significant investment to improve the service provided by our Contact Centre, and to improve the skill base of our Contact Centre staff. In addition to appointing customer service experts, including Sam Halford, our new Contact Centre Director, we have committed to building the knowledge, experience and customer focus of our existing employees.

By increasing the ratio of permanent to agency staff, now every four out of five staff members are permanent. This helps to improve consistency. We have also reduced staff attrition from 20% to 6% and created more multi-skilled teams, who are better able to respond to fluctuating call volumes. Equally we have introduced a number of measures to make our customers' experience of using our Contact Centre services simpler, more time efficient and more effective, by adopting a one touch multichannel approach.

Our move to Sirius, our new technology platform, is now fully embedded and will allow us to deliver the highest standards of customer service now and in the future. The project has been one of the largest IT developments in both the UK and Europe and brings many benefits, including faster processing, enhanced MI and real time workflow reporting.

And all this whilst carrying out the largest ever Rights Issue in the UK (see p23).

We recognise the requirement to continually evolve with the changing needs of our clients, and, to support us in this, we carry out regular benchmarking to ensure that we are aligned with the needs of our clients, and that they are at the heart of our service offering.

My main priority for 2010 is to ensure consistent delivery of the outstanding service levels that our clients quite rightly expect from us. One project which has truly supported this goal is the review of our key processes, which gave us the opportunity to enhance our customer service capabilities across all of our operations. We looked at all

What attracted you to your new position?

My role has evolved over the past year and I have worked very closely with John Parker, helping to manage our share registration and employee share plan businesses. Then with the director role, came the opportunity to work more closely with our clients and that was a big pull for me. The opportunity to be a driving force behind our goal to reinforce our client focus, not just within the Client Services team but across Equiniti, particularly among our Operations and IT colleagues, is one that I relish. Aligning the entire business with the requirements of our clients, their shareholders and employees is my number one objective.

What are your main responsibilities?

My role is wide-ranging but its principal focus is on our clients. We are tremendously fortunate to have such a loyal client base and to have a client list of which most B2B organisations could only dream. We genuinely have transformed the way that colleagues across the business support and work with the relationship teams and vice versa. I’ve been hugely impressed with 3 > Equiniti Magazine | winter 2010

For me leadership is about getting the right team in place and giving them the direction and support they need customer touch points to ensure our correspondence and interaction met with the high standards expected of us.

The outcome identified some significant actions that we have built into a project to improve service, with specific focus on complex multiple action transactions.

A key feature of the project has been on training and developing our people, to equip them with enhanced skills and the technical knowledge they need to deliver a world class service.

We have also broadened our offering with added value services, which allow us to deepen existing relationships through David Venus, Equiniti ICS and Investor

What steps have been taken to improve the customer’s experience?

five facts about stuart

1

Yosemite National Park in California is my favourite place in the world. It’s an awesome sight of natural beauty.

2

I’m a Spurs season ticket holder and can be found at White Hart Lane most Saturday afternoons.

3 4

Bohemian Rhapsody by Queen is one of my favourite songs.

I didn’t know what I wanted to do when I left school. Thankfully my inkling that I’d like working in financial services turned out to be correct!

5

My Labrador puppy eats everything. The remote control was its latest victim.

What is Equiniti’s greatest asset?

Its people. In a service-based business, people, process and technology are all key. It’s striking the perfect balance between those three criteria that will enable us to consistently deliver the highest level of service, but its our people that bring it to life.

What is your greatest strength?

It is probably the breadth of my corporate and business-to-business experience.

Describe your leadership style.

My approach is very much an inclusive

one. I try to foster collaboration and consensus among my team, as one of the biggest lessons that I’ve learnt during 30 years in business is to appreciate the collective power of the team. For me, leadership is about getting the right team in place and giving them the direction and support they need and, most importantly, creating an environment in which they can thrive and flourish.

If you could make one wish to improve the way you work what would it be?

To have more time! Our business is moving at a rapid pace and we’re

constantly responding to the changing needs brought about by the ever-changing financial and economic climate.

Do you have any pet hates?

People who don’t give everything 100%.

If you could pick any three guests to attend a dinner party at your home, who would they be?

Stephen Fry because he’s immensely entertaining and knowledgeable, Ian Botham as he is one of my sporting heroes and, perhaps a predictable choice, Winston Churchill. www.equiniti.com > 5

In the know:

>Getting the Combined Code right Peter Swabey, Company Secretary at Equiniti, highlights the key changes to the Combined Code proposed by the FRC

Following the release of the Walker Review’s final recommendations at the end of November, the Financial Reporting Council (FRC) issued its final report on the review of the Combined Code, alongside a consultation paper on proposed changes to the Code on 1 December.

“Initially there wasn’t going to be a review until 2010 but, given the financial turmoil over the last year or so in the banking sector, the FRC brought it forward,” says Peter Swabey, Company Secretary at Equiniti. “Unlike the Walker Review, which relates primarily to governance of banking organisations and financial institutions, the Combined Code applies to all listed companies, so it has a wider remit and from 6 April 2010 it will apply to all companies with a Premium listing.”

The report found that a single code on corporate governance for all companies should be maintained and that sectorspecific provisions should not be made.

“Everyone agrees that there should be a single code of corporate governance, but the Code itself will be renamed, probably to ‘UK Corporate Governance Code’,” says Peter. After much debate, the decision was made that the ‘comply or explain’ approach will remain unchanged.

However, one significant change will see the FRC take on responsibility for a new Stewardship Code for investors. “This is probably one of the biggest changes, as there is going to be a specific section relating to institutional investors and 5 > Equiniti Magazine | winter 2010

how they should govern themselves.

This is a key step because although the report does not necessarily make any material changes to what they should be doing, it vastly raises the profile of the implications of their failure to comply,” adds Peter.

Proposed changes to the Code itself are largely minimal, with the exception of changes to the re-election of directors and board evaluation. “Currently the election of directors takes place every third year on a rotation basis, but the FRC proposes that either the chairman or entire board should be elected annually,” says Peter.

“Another requirement, which is sure to get everyone talking, is for a formal board evaluation to be completed by an external consultant at least every three years, and its outcome included in the annual report. This may well prove to be quite emotive for a number of companies.”

As Peter explains, the majority of other proposed changes to the Code are little more than a case of “tinkering” with what’s already there. For instance, it

has been proposed that the role of the chairman and non-executive director should be clarified. “There are no particular material changes here, but proposals do call for increased emphasis on the importance of identifying a senior independent director,” adds Peter. “There will also be a new supporting principle whereby all directors should have access to the operations and staff of the company to improve their knowledge.”

So what’s next? Consultation on the proposed changes will end on 5 March 2010 and the revised Code will come into force from 29 June 2010. “There will be more consultation to come on this and I encourage all company secretaries to participate and to engage in discussions around revisions to the Code,” says Peter.

NEED TO KNOW MORE? To view the FRC’s report in full, visit www.frc.org.uk/ publications/pub2176.html

The Lib Dems’ business spokesman completes our round-up of views from the three main Westminster parties. Victoria Masterson reports

Postcard from Westminster john Thurso is sanguine about his role as Lord Mandleson’s counterpart in the Liberal Democrat shadow cabinet. While the Business Secretary is clearly a major figure in the current government, Thurso believes his lack of hands-on business experience puts him at a disadvantage.

“His heart’s in the right place,” suggests the MP for Caithness, Sutherland and Easter Ross.

“But the fact that he’s never been in any sort of business means he doesn’t always have the right judgement.”

In contrast, John Archibald Sinclair, 3rd Viscount Thurso, as he is formally known, spent his career running some of the world’s most famous hotels, including the Lancaster in Paris (81-85) and Cliveden House, Britain’s first stately home hotel, founded by Thurso in 1985 from a makeshift portakabin in the grounds.

“I speak the same language as business people and, because of what I’ve done, nobody doubts that my views are formed from experience,” he says. “I’ve had to trot round the city to raise money twice in the past and I’ve gone through due diligence for an IPO. One of the first things I suggested in my proposal to revive regional stock markets was simplifying the Long Form Reports for regional listings, to make them less onerous and costly.”

Thurso believes a network of regional stock exchanges across the UK could help address the equity gap for medium-sized businesses, while 100 or so ‘local enterprise funds’, each formed by ten to 12 individual investors with a combined pot of perhaps £100,000, would provide vital growth and start-up capital for small businesses.

He says: “One of the lessons that we should have learned from the current financial crisis is to get over this reliance on debt at all levels.

That means more equity.” The idea is that the government acts as a “strategic enabler”, rather than trying to fix the economy by throwing money at it or, even worse, directly owning businesses.

Thurso also has firm policies to ensure fair, open and transparent regulation. These include looking more closely at the impact new legislation has on business, particularly in terms of compliance. Regulatory impact assessments would be more thorough and would be carried

JOHN THURSO BORN: 1953, Thurso EDUCATION: Eton and Westminster Technical College; Honorary Doctorate from Oxford Brookes University FAMILY: Married to Marion, three children PARENTS: Farmer and housewife FAVOURITE BOOK: The Lord of the Rings by JRR Tolkien – "a timeless battle of good versus evil".

john thurso

out by independent auditors, rather than by the government. New regulation would have a ‘sunset clause’, or limited lifespan, so parliament has the opportunity to review or amend each new piece of statute appropriately. Another suggestion to limit the red tape burden on business is “one in, one out”. “If you want to bring in a regulation, you have to get rid of another one,” he explains. “That will change the culture of regulation so that [government] really has to work hard to justify it before bringing it in.”

Thurso describes Britain’s current health as “poorly”, and calls for a serious debate on whether financial services should account for a quarter of the nation’s economy. In other sectors, Sterling’s depreciation is helping to boost exports and confidence. He concludes: “Many of our businesses are more resilient than perhaps people give them credit for, and there’s a real opportunity to build on that.” www.equiniti.com > 6

feature euroclear/t2s

Question marks over Europe As a new decade begins, where are we heading with Euroclear and Target 2 Securities? John Heaton of Equiniti explores the positives, whilst highlighting concerns over clarity, cost, and delays What concerns do you have about current plans for the introduction of the Euroclear Single Platform?

Implementation had been scheduled for the end of 2010 and was moved to Q3 2011 in an announcement last November, but it now looks likely to be the first quarter of 2012 at the earliest.

That sounds like a long delay, but the timescale is still quite tight and there remains a lot to consider. The two phases are distinct and both have outstanding issues of concern. One is custody (covering corporate actions, dividends and meetings) and the other is settlement or transaction management. On the custody front, there is continuing uncertainty.

For instance, we do not have a definitive timeline and we don’t yet know exactly what the requirements for meetings are going to be, although we do know that the messaging arrangements will change. We also don’t know whether these changes will take place at the same time as the other custody deliverables, or whether they will be later. Euroclear hasn’t been able to confirm either way, possibly because its immediate priority is getting the corporate actions side finalised. If they think there is any risk of these changes delaying the corporate action changes, they may well move them to phase two or to an intermediate phase.

7 > Equiniti Magazine | winter 2010

How frustrating is this uncertainty?

It is a concern, for three reasons.

Firstly, we would ideally like to know the new arrangements for meetings at the same time as we are doing the work for the other custody elements.

It’s clearly preferable to do any work on a programme in one go, because otherwise there are additional software and developer costs – that is a big cause for frustration. The second reason is just the general uncertainty – neither Equiniti nor our clients can plan as effectively as we would want to. Thirdly, this ongoing uncertainty does undermine Euroclear’s credibility. We would like to help our customers by communicating a very clear and unequivocal message about what Euroclear is planning, but we’re simply not in a position to do that. We have pressed home these concerns to Euroclear and will continue do so throughout 2010.

What are the possible changes to messaging that you referred to?

One of the main purposes of the single platform from Euroclear’s perspective is to harmonise messaging across Europe using a common format or standard – ISO 20022 XML – which is already a common form of messaging across financial services and beyond. This is good news for two reasons. Firstly it will provide a platform that is more robust

and flexible. That will help when it comes to incorporating further changes in the future and is something the UK securities and settlement industry will be pleased about. Secondly, under the current system, the registrar (or issuer via the registrar) only communicates with CREST and that communication stops there. However, ISO XML messaging can integrate with CREST and be pushed down the line. So, on the meetings side, one would hope that communications from companies, and the responses received, will be better informed and more capital will be voted, particularly in the current corporate governance environment.

What about the transaction management side of Euroclear?

Although we have an indication of what will happen on this front, the details are missing. The main reason for this is that transaction management is intimately tied up with Target 2 Securities (T2S). Ever since T2S became a strong possibility, Euroclear has been forced to soft-pedal in this area. It’s therefore less frustrating from our perspective because we can see a genuine reason for the delay. The details of what Euroclear are planning for the single platform are likely to be forthcoming in 2011 once the detailed technical output for T2S has been prepared. What we do know is that T2S

{

The issue of cost is absolutely fundamental to T2S and the delivery of a single European platform

} that they currently face. I honestly don’t know what will happen on this front at the moment. The crystal ball is very murky.

Any other causes for concern?

is still talking about introduction in 2013, but we don’t yet know whether that is likely to be implementation for Euro and Sterling together, or the Euro areas first and Sterling later. That decision rests with both T2S and the Bank of England.

In many ways, it would make sense to have a phased introduction. That would be quite popular in the UK as the desire

for T2S is not as strong or urgent here as it is in the fragmented pan-European market. However, UK organisations who work across Europe may well have reservations about a phased introduction as they would have to operate two different systems simultaneously. It’s also a problem for the Irish market, particularly given the economic challenges

Yes – four in particular. Firstly, there is the initiative to promote transparency. There are positive moves afoot to ensure that UK issuers receive the same level of visibility as to who their shareholders are in T2S as they currently have through Euroclear.

There is also real enthusiasm to extend this to European issuers where they do not have something similar at present. Then there is the issue of governance, which you can look at in two ways. If European countries have signed up unequivocally to T2S and the UK has not, there is an argument that those who are committed should have greater influence than those who are still sitting on the sidelines.

However, that is not popular in the UK, as Sterling will bring the largest volume by some margin, which should lead to a proportionate influence. There is also the relationship between the Central Securities Depository (CSDs) and the users. As far as T2S is concerned, the CSD is the customer. However, in the marketplace, the CSD is simply the intermediary.

So if you give all the influence and governance to the CSD, you’re ignoring the user, who will ultimately be paying for the system. Which leads us neatly on to my third concern – cost. This is absolutely fundamental to the delivery of T2S, and to the delivery of the European single platform. Above and beyond all the details we’ve discussed, people basically want to know what impact the systems are going to have on their business model and how much they are going to have to pay. So far, there is an almost total lack of clarity in this area. The fourth and final concern is the issue of Corporate Actions processing. We do not yet have clarity on how these will work with T2S and whether the issuer or their agent has to use Direct Connectivity rather than intermediating through their CSD. Euroclear is saying 'not' but there are uncertainties around timings and the frequency of transfers between T2S and the CSD, which could have a major impact on task closures.

www.equiniti.com > 8

interview peter jones Portrait: Joel Anderson/eyevine

From the dragon’s mouth Peter Jones, of BBC Dragons’ Den fame, has formed a National Enterprise Academy to encourage a fresh generation of entrepreneurs. What is his motivation?

Some entrepreneurs view recession as a period of opportunity. Do you agree?

Yes, but let’s put it into perspective. No one, especially not an entrepreneur, wants a global business meltdown, but it is very true that recession often produces great opportunities.

The UK needs entrepreneurs to stimulate the economy and businesses need inspired employees to help their companies recover quickly. The new National Enterprise Academy (NEA), recently established by my charitable foundation, with the support of Government and the private sector, will help both.

Unlocking the potential of Britain’s young entrepreneurial talent is essential to the future success and competitiveness of our economy and there is arguably no better time to face this challenge head on than during a recession.

9 > Equiniti Magazine | winter 2010

What lessons should UK plc learn from the economic problems of the past two years?

While the economic climate has and will continue to change, many of the problems businesses face remain the same. Chief amongst those challenges is quite simply the ability to find and recruit employees with the right skills – the skills to drive business growth and expansion, the skills to spot opportunities, the skills to manage and exploit risk. In short, the skills to be truly entrepreneurial.

The current economic climate throws into sharp focus the very real skill shortages in the UK economy.

The need for entrepreneurial and intrapreneurial talent (the ability to work entrepreneurially within an existing business) is not a new phenomenon, but the need has almost certainly been intensified by the recession. Businesses large and small need people who can spot and seize opportunities, people who can

As an investor, I need to be convinced that the person pitching to me not only possesses a sound understanding of business, but also possesses a genuine entrepreneurial flair

{

His first business went bust, but Peter Jones believes business people shouldn't be scared of failure

} :::::::::::::::::::::::::::::::::

A runaway with ambitions The early years

Brought up in Berkshire, 43-year-old Peter Jones hated his private school so much that he ran away on several occasions before eventually being transferred to a state school.

The teenager

Despite a comfortable home life, the young Peter Jones had a desire to make money and, after passing his Lawn Tennis Association training exams, famously set up a successful tennis academy at the age of 16.

Early twenties

After leaving school, Peter set up a computer business that soon generated enough cash for him to buy a BMW, a Porsche and a home. But his business life hasn’t all been plain sailing. He admits he made mistakes early in his career and, despite the good start, his business faltered. He moved on to working in computer support, and owning a bar and restaurant, before joining Siemens Nixdorf at the age of 28. challenge existing practices and existing ways of doing things. We don’t currently have enough young people with this skill set and that’s why I’ve committed my time, energy and money into establishing the National Enterprise Academy to help train the next generation of business leaders and entrepreneurs.

What have you learned from your involvement in Dragon’s Den? The process of having seen hundreds of business hopefuls not succeed in their attempts to secure investment on Dragons’ Den has only reinforced my

belief in the need for a programme of learning dedicated to teaching young people enterprise and entrepreneurship.

As an investor, I need to be convinced that the person pitching to me not only possesses a sound understanding of business, but also possess a genuine entrepreneurial flair.

All too often, myself and the other Dragons come across high-calibre individuals who demonstrate excellent business knowledge, but lack the entrepreneurial skill set required to transform their business ideas into business success.

Early thirties

Within a year, he was running the company’s UK computer operations.

11 years ago, he left Siemens Nixdorf to set up Phones International Group, and now heads one of the UK’s largest privately owned companies, with a wide range of business interests. He subsequently became something of a celebrity with his regular appearances on BBC TV’s Dragons’ Den. Peter has five children, two from an earlier marriage, and three with his current partner Tara Capp.

www.equiniti.com > 10

interview peter jones

Is Britain becoming more entrepreneurial?

I passionately believe that, deep down, we are an enterprising nation. To coin a phrase, ‘Britain’s got talent', but as a nation, we just don’t do enough to foster that talent.

We have always been an inventive country and great ideas have been the foundation of our prosperity. As the Government’s Enterprise White Paper identified, business and enterprise education is currently not doing enough to develop our young entrepreneurial talent. However, with the advent of the academy, we can begin to nurture and unlock the latent entrepreneurial potential that exists.

Peter with his fellow Dragons James Caan, Duncan Bannatyne, Deborah Meaden and Theo Paphitis

How well progressed is the academy?

I officially launched the academy in autumn 2009 across two leading-edge facilities in Aylesbury and Manchester.

But this is only the beginning of the journey, and I aim to rollout the NEA qualification across all nine regions and see 18,000 learners benefit from the course in the next five years. At the moment, the NEA is looking to recruit aspiring entrepreneurs aged 16-19 for a six-month fast-track course starting in January 2010. Unlocking the potential

of Britain’s young entrepreneurial talent is essential to the future success and competitiveness of our economy and, up until now, I believe we have simply not done enough to release this talent among our young people.

Very few school leavers think of starting their own businesses or are encouraged to do so. The NEA is

designed to nurture and unlock the latent entrepreneurial potential that exists in this country. For me, it’s about doing away with the “Can I?” mindset and replacing it with an “I can” attitude.

• For more information about the National Enterprise Academy, go to www.thenea.org.uk

:: Turnaround successes

The path to entrepreneurial achievement rarely runs smoothly Donald Trump

Known universally for the Trump Tower skyscraper, as CEO of Trump Organization, and host and executive producer of The American Apprentice, Trump’s career has been far from plain sailing. He expanded his portfolio with the purchase of several Atlantic City casinos, including the Taj Mahal Casino in 1990, but this expansion led to increasing debt. Trump took the

11 > Equiniti Magazine | winter 2010

Taj Mahal Casino into bankruptcy and much of the media coverage of him in the early 1990s focused on his financial problems.

Mike Lazaridis

Hailing from Istanbul’s Greek quarter and a victim of the Aegean tensions that led to his family’s relocation to Canada, the mastermind behind BlackBerry was acutely aware of the smartphone’s potential for global proliferation from day one.

But his career did not get off to a good start. A college dropout and electronics obsessive, Lazaridis was more at home in the workshop than the boardroom and it was with reluctance that he first stepped into the limelight with the launch of BlackBerry in 1999.

Dame Marjorie Scardino Famed as the first female CEO of a FTSE 100 company, Scardino defied the

decline in traditional print media and the worst economic downturn since the Second World War. Profits of Pearson Plc, the media and education group of which she is CEO, saw its profits rise 11% year-on-year in 2008 to £762m despite the tough economic climate.

Her first publishing venture – the Georgia Gazette – attracted a Pulitzer Prize but was, nonetheless, a commercial flop.

Feature financial education

Education, education, education.

Clear and impartial financial education seminars can have unexpected benefits for your employees – and your overall business.

Liz Longden reports There is nothing quite like a recession to highlight the importance of financial education. As people across the country have felt the impact of the economic downturn on their personal finances, the crisis has thrown into dramatic relief the importance of understanding both the value and risks of saving and investment.

According to the Financial Services Authority (FSA), however, many people across the UK struggle to understand and keep track of their finances, and therefore choose suitable financial products.

To help remedy the problem, the FSA has developed a financial education programme, ‘Making The Most Of Your Money’, which it is delivering in workplaces across the UK.

How do employers benefit?

John Collison, of the FSA’s Financial Capability Division, says the programme offers multiple benefits for employers – not least improving engagement with employee benefit schemes.

“A common issue I have experienced with share plans is that no matter how many pieces of paper you put in front of someone, they often don’t understand what they are being offered,” he says.

The FSA's financial education programme helps employees engage with benefit schemes

“However, if you understand a little bit of background about the financial market, about how shares and stock markets work, that’s a positive building block to promote understanding of employee share plans.”

Another big draw for employers is the improvement that advice on financial issues can bear on employee wellbeing.

Research carried out by the FSA and other bodies suggests the equivalent of around three million working days are lost annually as a result of employee financial worries. The point is particularly salient after a period of high expenditure over the Christmas.

“All our research points to the fact that employees who feel in control of financial matters are far better, happier and more productive,” says John. “Our programme also fits in very well with the wider Corporate Social Responsibility angle.

Many companies want to do good and be seen to be doing good,” A financially savvy workforce, he adds, is also better placed to understand and accept the budgeting and financial constraints that affect their organisation.

What does it entail?

The programme takes the form of a onehour seminar – a 45-minute presentation

and a 15-minute question and answer session – delivered by either a member of the FSA’s Financial Capability Division, or one of its team of volunteers.

The presentation touches on a number of issues, including budgeting, borrowing, protection and insurance, wills, saving and investing, and retirement planning.

One of its key features is a free-form section, which allows employers to choose issues relevant to their organisation.

The seminar is supported by a free guide, including a jargon-buster glossary and a list of useful contacts.

47,500 employees have attended one of the seminars since their introduction in 2009, and John expects the trend to continue. “We can deliver this presentation anywhere in the UK. Everybody is eligible and it’s completely free of charge,” he says. “Above all, the FSA is completely impartial. We regulate the financial market, we don’t sell. And that’s what appeals to companies – free, impartial, invaluable advice.”

need to know more?

Contact John Collison on john.collison@fsa.gov.uk

www.equiniti.com > 12

feature sharesave & SIP

Chasing the man Julia Foo was tasked with increasing the participation of British Gas employees in Sharesave and SIP. A concerted campaign led to impressive results. Liz Longden reports Sharesave and Share Incentive Plans (SIPs) are two of those concepts that genuinely benefit everyone.

For the employee, they offer simple, risk-free savings and investments. For the employer, they incentivise and motivate the workforce. And for the Government, they are a welcome means of encouraging people to save for the future.

All well and good – but how do you explain these benefits to your employees and get their buy-in? And how do you do that when many of your workforce are scattered across the country driving around in vans?

This was just the challenge facing Julia Foo, Assistant Company Secretary at Centrica plc, the integrated energy company that, under the British Gas brand, is the one of the UK’s market leaders in domestic energy supply.

‘The hook factor’

“Our Sharesave documents had been in use for a number of years, and we felt they really needed a revamp to make them more accessible, more eye-catching and easier to understand,” says Julia.

“We wanted a fresh pair of eyes to develop that ‘hook factor’ and hopefully increase the awareness and uptake.”

In particular, her aim was to target British Gas employees, who make up over 60% of the Centrica workforce, and whose working patterns made them a particularly challenging target for a publicity campaign.

“It was a challenge, because many of our British Gas employees are very mobile,” Julia explained. “We have a lot of engineers who work between sites, and other employees who are constantly on the move, fixing boilers, looking after our customers, checking gas supplies, and so on, and they aren’t able to log on to the intranet like most office-based employees.

“We also had to be realistic about how much of their time these employees were likely to spend reading company information. Because the focus of their job is something quite physical, and reading tends to be more of an office activity, the answer, we felt, was 'not much'. So forcing them to go through a thick set of documents telling them about Sharesave didn’t seem the best idea.”

Reaching a diverse workforce Graham Avinou (Equiniti Service Delivery Manager), Julia Foo and ProShare award

13 > Equiniti Magazine | winter 2010

Instead, Julia and her colleagues opted for a more accessible, user-friendly, design-led approach, enlisting the help of the British Gas Marketing and Communications team, and the Equiniti team. Together,

they developed a two-sided A5 brochure with ‘Powering your savings’ on one side and ‘Powering your investments’ on the other. Clever imagery encompassing light bulbs, steam kettles and piggy banks communicated the key messages, whilst tying in the link to Centrica as an energy provider. Another defining feature of the relaunch was to include information on both Sharesave and the company’s SIP in the same brochure.

“Previously, all we had done for the SIP was to send out documentation to all the employees who qualified. We didn’t do anything extensive to promote it, other than telling them they were eligible. So here we thought we had a good opportunity to remedy that,” Julia explained.

“Because people were generally more

{

in the van

aware of the Sharesave, we thought if they’ve joined Sharesave and they haven’t joined the SIP they can now have a look at it and see the SIP as an additional tool for them to invest in.”

The team also developed an innovative multi-media delivery method for the campaign, utilising internet, mobile phone and field radio resources to reach all areas of the diverse workforce.

“Some employees had plasma screens advertising the share plans at their offices, some had posters, and others had access via the intranet, with articles running almost the entire launch period, as well as banners and promotional flashes,” Julia said.

“We also launched a rebranded website that was more user-friendly, so that employees could access the internet from

}

Julia Foo (left) believes that a more creative approach to employee communication will be rewarded

home. And for the mobile employees we did rather interesting things, like sending mobile texts – for example telling them to look out for the documents in the post, or reminding them of deadlines – and using British Gas field radio, with broadcasts telling them what the Sharesave and SIP schemes were about.”

‘A pretty much amazing job’

The result of the relaunch was a staggering increase in uptake. Following steady growth in the take-up of Sharesave across Centrica plc from 21.67% in 2005 to 28.58% in 2008, the take-up in 2009 alone rose to 36.19%. Meanwhile the take-up for British Gas rose from 27% in 2008 to 36% in 2009. Similarly, whilst the total number of new adherents to the SIP scheme was 540 in 2008, the

first month of the launch alone saw that jump to 861 and, for the first ten months of 2009, the figure stood at 1,318. All these results reaffirmed the need to tailor communications to different areas of the business. The campaign also received a very positive response from employees, with 94% saying they found the brochure quite or very useful, and 92% saying there was nothing they did not understand.

And, for further endorsement, it won a commendation for the Most Effective Communication of an Employee Share Plan 10,001+ Employees category at the 2009 ProShare awards “The feedback is really positive,” Julia says. “The gist from the majority of people I’ve spoken to is that we’ve done a good job in communicating the general idea of the share schemes. It’s just a matter of making sure that people pick it up to read. Once they do, they realise it’s not as complicated as they thought.”

Commenting on the reasons for the success, Julia says the organisation’s inclusive approach was essential and praised the professional expertise of Equiniti’s team.

“Equiniti have been dealing with share schemes for years now, they have great expertise, and they service some of the top FTSE companies,” she says. “That means that, from their wide experience with other organisations, they are able to gather what best suits our culture, initiatives and objectives. This Sharesave and SIP launch was completed in a very tight timeframe, and for them to have produced the quality of work with our theme, actually get the message we wanted across and get it done on time, it was pretty much an amazing job.”

need to know more?

To benefit from our experience of creative solutions, contact Dawn Everett on 01903 698576, dawn.everett@equiniti.com. For details on running or launching SIP or Sharesave plans, contact John Daughtrey on 01903 833259 or email john. daughtrey@equiniti.com www.equiniti.com > 14

group company secretaRy feature michael robinson xxxx sagesubhead in here xxxx Portrait: Andy Wilson

Attention to detail is central to Michael Robinson’s role at the business software giant Sage. But come the weekend, music and football take centre stage What does a typical working day involve for you?

It may be a cliché, but it’s hard to pick a ‘normal’ day because it depends on many different things. But the typical day, as far as there is one, is a mix of jobs – especially as I'm both Company Secretary and Group Legal Director. So there are pure secretarial things to do and then a legal side – for example acquisitions, notifications, tracking any changes in the law that affect us, and liaising with legal teams in other parts of the group.

What are your main priorities?

Because there are so many different things all happening at one time, I have to keep on top of many different issues.

You’ve got to keep a lot of plates spinning at the same time, while being aware of any changes that might be happening in the outside world. There’s an awful 16 > Equiniti Magazine | winter 2010

he’s a man of lot of discussion at the moment about corporate governance, so it’s important to keep an eye on what’s brewing there.

What skills do you think are essential to be a company secretary?

You have to be a clear thinker. Because there is always so much happening you have to be able to pick up on issues quite quickly, and distinguish between what’s important and what’s not. You also have to be very organised, have really good time management, and be very responsive to the people around you. We have a non-executive chairman, so he’s not here every day. That means you have

to be able to both bring to his attention any things he needs to know and also be quick at getting back to him when he has issues.

Has the recession greatly impacted the way you work?

Actually, in my work and with what I do it hasn’t really affected my day-to-day work very much at all. I’m still busy!

But you’d start to worry if you weren’t, wouldn’t you?

What are the major challenges facing The Sage Group in 2010?

Like all businesses we have been affected

{

Michael was secretary of his College Film Society at Oxford University

}

Therefore our challenge is to continually deliver that value at the same time as managing our business in a responsible fashion.

Are there any business lessons you’ve learnt so far that stand out as being particularly important?

CV

Current role Company Secretary and Group Legal Director, The Sage Group 1995-2002 Partner, Pinsent Curtis Biddle 1987-1995 Partner, Simpson Curtis 1985-1987 Solicitor, Linklaters & Paines Where did it all start?

Michael Robinson was born and educated in the North East before leaving to study law at Oxford University. He graduated in 1982 with a First Class Degree and, after a year at law school, trained at the large city firm of Linklaters and Paines qualifying in 1985. Michael is married with two children.

sage advice I know lawyers are very pernickety, but I think it’s a good thing. It saves so much time to get things right the first time around

by the downturn. However, we have a robust business model that has allowed us to adapt to the economic environment whilst at the same time continuing to invest in the business software and services most needed by our customers. So whilst business confidence will remain cautious in the short term, our customers – small and medium sized businesses – are still willing to purchase software and services where they deliver value.

From a secretarial and lawyer’s point of view, you do need to have an attention to detail. I know lawyers are very pernickety, but I think it’s a good thing.

It saves so much time to get things right the first time around, rather than get it wrong and then have to catch up later.

How do you relax after a busy week?

This is a fantastic part of the world to be based in – there’s plenty to do, and the countryside’s great. I’m a trustee of the Sage Gateshead, which is the concert hall we sponsor on the banks of the Tyne. It’s a great place and music’s really my big thing out of work, so it’s a really exciting place to be involved with. The other thing is football – if you can call supporting Middlesbrough relaxing!

Are there any changes that could make your working life easier?

I can’t really think of anything. What does make it easier is being surrounded by good people, who you can work with closely in a small team, and who are very dedicated. I’m pretty lucky that I’ve got that kind of support around me. Not only locally, but around the world.

If you had to choose another job what would you be?

Apart from being a musician – I used to sing in a band – maybe the other thing I’d quite like to do would be property development.

I like the idea of finding something, building it up and then putting your mark on it. I think as lawyers we probably don’t get much of an opportunity to do that!

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

www.equiniti.com > 17

feature david venus

Lighten the load As hard as a company secretary might prepare for the future, there is always the threat of 'the unexpectedâ&#x20AC;&#x2122;. Martha Bruce and Susan Wallace explain how flexible outsourcing can cover all eventualities

17 > Equiniti Magazine | winter 2010

{

David Venus, founder of David Venus & Company, won this year's ICSA Outstanding Achievement Award

“The unpredictable nature of the company secretary’s role is what, in many ways, makes it so interesting. But it does create extra work, and this can be difficult to manage in-house,” explains Martha Bruce, a Director at David Venus & Company. “We are finding that many company secretarial teams have been pared down to the bare minimum. This might be adequate on a day-to-day basis, but can create considerable difficulties when the company is faced with extra time-critical work arising from, for example, a rights issue, acquisition, demerger or group re-organisation.”

Also, when recruiting permanent company secretarial staff, or indeed interim cover options, it can sometimes take too long to recruit the right person.

Susan Wallace, also a Director at David Venus, explains that the outsourcing capability provided by David Venus has been very well received by Equiniti’s clients. “We have already helped a number of clients by providing members of our own team at short notice for temporary assignments, either to address particular projects, or to help with routine work when staff numbers are down.

In one particular instance, the client was aware that a number of staff were going to be absent at the same time but unable to recruit someone suitable in time, so we provided one of our senior managers to bridge the gap for them.”

Martha adds: “On another occasion, planned holiday coincided with senior staff sickness and, again, we were able to provide someone at relatively short notice to deal with a variety of tasks and prevent work building up. As our team are well-versed with the main company secretarial software packages and are up-to-date with legislative requirements and best practice, they are immediately able to contribute positively.”

A client’s first experience of David Venus might arise from a shortterm assignment, giving them a good understanding of how effective the team is at getting work done, in a manner that suits the client’s style and method of operation. “Each member of our team has his or her own portfolio of clients from an early stage which, as well as giving a sense of ownership, helps them

}

learn how to adapt and deal with a broad range of clients. We are very flexible in how we work as all our clients have very different needs and we need to be able to accommodate these,” says Martha.

The impression left by the David Venus team is clearly good since, once known to clients, they are often approached for further work. “Many companies come back to us repeatedly when they have short-term or time-pressured resourcing issues but, in addition, there are many other ways we can help. We are fully up-to-date with changes arising from the Companies Act 2006 and are proactively advising clients about what they could be doing to simplify compliance and administration. Indeed, we have helped many clients update their subsidiary companies’ articles so they comply and can benefit from provisions in the Companies Act 2006 and draft and review resolutions in their AGM notices.

We have also helped with the dissolution

We are very flexible in how we work as all our clients have very different needs and we need to be able to accommodate these of dormant subsidiaries,” adds Susan.

An over-riding theme of the interview is ‘flexibility’ and how David Venus will tailor what they do to suit the client.

“We are very conscious that clients' needs vary tremendously and, whilst we are able to provide a full range of company secretarial assistance, we work with clients to determine where our services can really benefit them.”

At one end of the spectrum is the FTSE 100 company with a large inhouse resource, which might just need occasional help with ad hoc projects.

At the other end is the smaller listed company, with less resources and a finance director who possibly takes on the company secretary’s role reluctantly.

“Smaller listed companies often engage us to deal with all their routine company

:: Why outsource company secretarial work to David Venus? n Their

economies of scale are passed on to you as cost-efficiencies. n Time spent on routine compliance and administration work is reduced, giving you more time to devote to more complex and critical areas. n They will proactively manage, monitor and report on compliance. n They can assist during periods of high work volumes or staff absence. n The whole team’s experience and knowledge is just a phone call away. secretarial and compliance work. This might include maintaining statutory registers, such as dealing with Companies House filings and recording minutes of meetings, as well as being on hand to provide technical advice with more complex matters and the requirements of company law. Nothing is set in stone though, and larger companies are increasingly outsourcing routine compliance work, leaving the in-house team to concentrate on higher level matters,” Martha says.

Equiniti prides itself on delivering service excellence to clients and this is mirrored by David Venus. “We’ve spent the last few months meeting Equiniti’s relationship managers and their clients,” says Susan. "I have been very impressed by their professionalism and their sound understanding of their clients’ needs. We feel truly integrated within the group and, if they feel comfortable recommending our services, that is a great endorsement.”

IF YOU WOULD LIKE MORE INFORMATION

To find out how David Venus & Company can help you, please contact Martha or Susan on 01372 465330 or email martha.bruce@davidvenus. com or susan.wallace@ davidvenus.com

www.equiniti.com > 18

feature SUCCESSION planning

The value of a good succession plan only becomes apparent when there’s a problem at the top.

Andrew Munro offers some specialist advice “If an incompetent chieftain is removed, seldom do we appoint their highest ranking subordinate to their place”.

So commented Attila the Hun in the fourth century, reminding us that succession management is far from a modern phenomenon.

If a concern with ensuring leadership continuity is nothing new, however, there seems little consensus on the best way to set about it. Operations, Finance and Marketing functions might have established conventions to guide their business plans, but succession planning retains a more mysterious air.

The issue has been again highlighted in recent months, with high-profile companies experiencing embarrassingly public difficulties in filling their top roles.

So why does succession management pose problems for organisations, what does it entail, and how can it be implemented effectively?

Uncomfortable issues

According to Andrew Munro, Director of AM Azure Consultancy and author of Practical Succession Management, succession is a thorny and uncomfortable issue for many organisations.

“Personality and politics often underpin the reluctance of boards and top management teams to think about succession. It raises difficult issues about strategy, structures, people and performance that executives might prefer not to discuss,” he says.

“Maybe the key questions at the beginnings of succession are: who 19 > Equiniti Magazine | winter 2010

Do you have a succession plan? actually wants a more formalised and systematic discussion about succession? Who doesn’t? And Why?”

Classic charts or talent clusters?

The issue is further complicated by a lack of clarity about what ‘succession planning’ actually entails, with many businesses eschewing more traditional, detailed succession charts and opting instead for ‘talent management’ – schemes that map out ‘role clusters’ and ‘talent pools’.

“A number of organisations that have undertaken the classic kind of succession charting to map out structures and

successors have found the exercise timeconsuming, and, when it’s completed, quickly dated and no longer reflecting resourcing realities.” Andrew explains.

He adds: “I think it’s fair to say that succession plans are sometimes done as a kind of impression management, a piece of paper to wave in front of the remuneration committee, and no one is fully engaged in the exercise or managing the implications.”

“So there has been a move in some firms towards a much looser approach.

Rather than mapping specific roles against specific structures, the game-plan is to cluster roles and review pools of

{

}

Succession planning goes back to the military chain of command. If you lose a commanding officer in battle you've already nominated a replacement

about who’s ready to step up a level, or is it about who’s ready to step up into a specific role?

“For some organisations, unsure about their future, it doesn’t make sense to do classic succession charting. But for other businesses, clear about how and where they intend to compete, it is a powerful discipline that does flag up where the blockages and barriers might be.”

The pros of planning

So, if succession plans raise difficult issues and demand a certain amount of resources, what are the benefits?

Promote continuity

“If organisations want to extend their options around talent pools, they need to think a little bit more proactively about internal succession” Andrew Munro, Director of AM Azure consultants and author of Practical Succession Management

talent as potential successors.”

However, while the benefits of the ‘cluster approach’ are obvious, Andrew says, what is gained in flexibility can be lost in functionality. Succession management is essentially an exercise in matching demand and supply; pinpointing key roles, particularly those emerging as critical to future corporate success, and mapping out specific coverage or exposure, is a valuable discipline in risk management.

Andrew explains: “Both classic charting and the cluster approach are about looking at individuals and their readiness to progress. But the question is: is it just

While Andrew points out that internal succession is not the only option for executive appointments, and that bringing in key figures from other companies can also be successful, he says there are a number of advantages to having a well-thought-out, functional succession plan in place.

To back his view, he cites McDonald’s – which, through unexpected deaths, went through three CEOs within just 12 months – as an example of an organisation that was able to deal with unexpected circumstances with minimal disruption.

And while several of their rivals floundered (caught up in their own succession crises) in the 1990s, it was Tesco who appointed as CEO, insider Terry Leahy, a firm that Andrew describes as having “developed a leadership ethos and business model which means that, even if they keep reinventing themselves, there’s a lot of continuity about what they do and how they do it”.

Widen your options

These examples contrast with the difficulties recently experienced by major companies such as ITV and Bank of America, amongst others, which arguably highlight the risks of being too dependent on ‘external talent’.

In other words, a healthy succession process can serve as a kind of insurance policy, at the very least widening an organisation’s options.

“I think there is a suggestion, that at very senior levels there isn’t a huge pool www.equiniti.com > 20

feature SUCCESSION planning

of talent,” Andrew argues. “In senior appointments, the same handful of names keeps cropping up over and over again.

If organisations want to extend their options around talent pools, they need to think a little bit more proactively about internal succession.”

Adapt quickly to the unexpected Another major benefit of internal succession is that key figures can be appointed quickly, minimising the disruption that can shake confidence in an organisation.

Andrew says: “Speed of change is another big driver. We can’t just brief the head hunters and expect that in three months we’ll have a suitable candidate. We need to be faster in terms of identifying and developing and preparing people for senior roles, because going outside every time either leaves us with quite a limited pool, or is going to take a long time.”

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

7 points for successful succession How should companies approach the difficult issue of drawing up succession plans? Based on analysis of a 10-year follow-up survey of the impact of succession practice on rates of organisational success and survival, Andrew suggests:

1. Define what succession is

Succession means different things to different people, so debate, discuss, map out its scope and scale, and make sure you’re all singing from the same hymn sheet.

2. Keep it focused

Keep the exercise manageable. Don’t attempt a succession plan for every role at every level. Instead, prioritise, and pick out the most critical roles. Your leadership development strategy, too, should be selective. Rather than spread your bets (and budget) across the full population, decide where to place your bets.

People seem to find it easier to build trust where there’s a degree of continuity

A succession plan shouldn’t be just a piece of paper. A strategy where top management have responsibility for coaching and mentoring some of the emerging successors is more likely to be effective.

Be cost-efficient

4. Shun the comfort zone

Cultivate employee trust

5. Promote conversation

Searching for external candidates can also be an expensive and time-consuming exercise, Andrew notes, recalling work AM Azure did with a major IT firm five years ago, which placed the cost of searching for and recruiting a senior European sales executive externally at around £750,000.

Andrew says: “Trust levels have been falling. No doubt there are many factors, but frequent changes at senior levels don’t help build and maintain a culture based on clear and consistent values.

Of course corporate trust can become complacency and cronyism, and here external recruits can bring a new and challenging perspective. However internal succession can and does bring a certain continuity of culture.”

21 > Equiniti Magazine | winter 2010

3. Get involved at the top

Organisations that use job moves to prepare people for more challenging roles are more likely to survive and succeed.

Finding new assignments and new projects for employees gives them exposure to experiences outside their normal role and prevents them becoming too comfortable and complacent.

Conversation is key. Succession is often a secretive activity that happens once a year, but successful succession planning boils down to a series of informed conversations - between individuals, line managers, and senior executives. The board also need to have mature conversations about the structure of the business and its key roles.

6. Highlight specialist expertise

Rightly, many organisations have invested in developing general management and leadership skills. However don’t neglect technical know-how, professional expertise, and specialist skills. Ensure your succession plan identifies those individuals with in-depth capability.

7. Establish a robust framework

Robust corporate governance is essential in the appointments process. There should be a framework in place, with checks and balances, that establishes processes to review key roles, the coverage of those roles, and the quality of the people coming through the business. As part of corporate governance processes, succession should be seen as part of our risk assessment.

feature LLoyds banking group

lloyds banking group and equiniti teams work wonders Equiniti has recently facilitated one of the largest ever capital raising in Europe, incorporating a £9bn debt exchange and a £13.5bn Rights Issue for Lloyds Banking Group.

"The logistical challenge to Equiniti, an integral part of the project team, to process one of the largest capital rasings ever to the UK's largest private shareholder base was unprecedented, with a complex group of stakeholders and tight timescales," said Robert Moorhouse, Head of Operations, Group Secretariat at Lloyds Banking Group.

"Equiniti was able to process significant volumes of shareholder instructions over a 10-business-day period, immediately followed by the next challenge of issuing entitlement notices to all 2.8m shareholders – also within a 10-businessday period! Equiniti played a key role in ensuring we achieved our objectives and, in the process, can and should be proud of their own achievements."

The sheer scale of the project was astonishing:

• Unprecedented volumes of rights issue instruction forms processed in just a 10-day-business window.

• The provision of personalised data for more than 2.8m voting forms for ordinary shareholders (including 55,000 legacy LTSB employee share plans).

• Management of shareholder registration process at General Meeting for approximately 500 shareholders, acting as scrutineer for the shareholder vote.

• The handling of more than 100,000 calls through our dedicated shareholder help line – peaking at over 19,000 calls in one single day.

• The printing and dispatch of more than 2.8m items including share certificates, statements and cheques.

• Circa 40,000 secure messages sent via RIS platform and 24,000+ take-up.

Lloyds banking group Rights Issue raises the bar on big numbers The provision of personalised data for more than

2.8m

The printing and dispatch of over

2.8m items including share

voting forms for ordinary shareholders (including 55,000 legacy LTSB employee share plans)

Management of shareholder registration process at General Meeting for 500 shareholders acting as scrutineer for the shareholder vote

certificates, statements and cheques

Handling of more than

95%+

calls peaking at over

Take-up achieved Across the RIS platform, circa

100,000 19,000

calls in one single day

40,000

secure messages sent and over

• The recruitment of an additional 500 temporary people at our Holmoak premises alone; with logistical preparation catering for extra car parking, refreshment, and toilet facilities.

“Few businesses have the capability to successfully manage a project of this scale, and Equiniti’s track record in managing large amounts of data and processing complex administration tasks was a key factor in securing the contract from Lloyds Banking Group,” says Equiniti CEO Wayne Storey. “With the rights issue now concluded, we can reflect on an outstanding result – we have delivered a first class service and achieved our contractual obligations in full, against a backdrop of maintaining

Recruitment of an additional

500

temporary people at our Holmoak premises alone; with logistical preparation catering for extra car parking, refreshment, and toilet facilities

24,000

take-up responses

the Business As Usual service levels that have seen significant improvements in recent months.

“With our focus on service and quality driving our business agenda, it has been essential that we have not lost any momentum on the recent improvements we have made to our client and customer service. So to maintain our Business as Usual service levels whilst delivering this huge project is a fantastic achievement that only serves to enhance our reputation. The successful conclusion of the project is a fantastic start to the year and reinforces our capabilities for managing tasks of this size and scale at a high level of quality.” www.equiniti.com > 23 22

feature SHAREGIFT

{

Claire Mackintosh created ShareGift first and foremost as a solution to a business problem

}

The win-win appeal of ShareGift has become apparent to more and more companies and shareholders. Claire Mackintosh tells her story Generating £14m for 1,600 charities is quite an achievement. When this philanthropy is a by-product of solving a longstanding business puzzle, the feat becomes all the more intriguing.

The answer dates back to the 1980s’ privatisations, which greatly extended share ownership in the UK. But they also created problems for companies and share registrars, which was noted

by Claire Mackintosh, then an investment manager at Henderson.

“With so many first-time shareholders taking scrip dividends, I thought, ‘what happens to the odd lots when underlying holdings are sold?’” she says.

Blessed with an inquisitive mind, she embarked on “a very steep learning curve” about the work of registrars and corporate secretariats, and devised a mechanism for unlocking the millions in unwanted shares. Her solution, ShareGift, was launched in 1996.

Claire knew that transferring, collating and releasing value from thousands of share certificates would be a logistical nightmare which couldn’t be commercially cost-effective. The answer lay in making ShareGift the accepted, charitable way of disposing of small, unwanted shareholdings, which would be sold when possible. “The outcome is charitable, but ShareGift’s premise was never to ask people to 'please give generously'”, explains Claire. “Its primary goal is to solve a problem – the inconvenience to companies and individuals of small shareholdings, however they have arisen.”

A neat solution

“Odd lots cause no harm, but companies must still send out relevant documentation to those holding them, including tiny dividend cheques. This can irritate the shareholder, and amounts to wasted money and time. Companies and shareholders alike appreciate a neat charitable option that removes the nuisance for the individual and cuts costs for the company too”.

23 > Equiniti Magazine | winter 2010

Ticking all the right boxes ShareGift channels the proceeds of donated shares to a range of UKregistered charities, suggested by individual shareholders, companies and their registrars.

The Equiniti/ShareGift collaboration has generated £5m in donations, thanks largely to Equiniti’s Shareholder Programmes for corporate clients, which enable shareholders to increase or sell their shareholding, or donate it charitably through ShareGift.

Programmes can sometimes be done free of charge, with little company input required, forming part of a wider retail shareholder strategy, and reducing register maintenance fees and shareholder communication costs.

ShareGift has also been efficiently deployed by two Equiniti clients in corporate actions documents.

Equiniti’s employees and corporate clients have nominated a number of beneficiaries. These include St. Barnabas House and Chestnut Tree House, hospices with strong links to our Head Office in West Sussex, and which have received nearly £150,000.

:: Equiniti Shareholder Programmes Equiniti offers its clients the Shareholder Programme service, allowing companies to manage their shareholder bases more proactively. The Equiniti/ShareGift partnership has generated £5million so far.

Programmes

1 Can often be done free of charge with minimal company input.

2 Can reduce register maintenance fees/ shareholder communication costs.

3 Can form part of wider retail shareholder strategies.

4 Fit well with companies’ CSR objectives.

Equiniti clients Severn Trent and Tesco scooped prizes at the ifsProshare Awards, and won the right to choose charities to receive £20,000 of donations from ShareGift.

Congratulations!

question time: tim george After several rights issues, a demerger and major acquisitions, Tim George, Deputy Company Secretary at Carillion, has learnt to sleep soundly at night

are the typical Q What day-to-day challenges of

Alfred McAlpine plc) and being part of the English China Clays takeover defence team, I feel that I have seen most things in corporate life so not much troubles my sleep. However, I do find inequality and greed troublesome. A friend is the Chief Operations Officer of the UN’s World Food Programme reporting to a US Senator: I know that sleepless nights are part of his job description.

your role at Carillion? enjoy being a company A Isecretary for many reasons, but certainly because of the variety of matters that land on my desk.

This is particularly the case in a large, complicated but fascinating group of companies such as Carillion. So whilst the Carillion Secretariat team of four takes care of the mainstream company secretarial work for 600 plus companies, we get involved in all acquisitions, disposals, financial closures and other projects.

Recently, we have also been involved in setting up a branch office in North Africa, dealing with compliance issues for the Australian Securities and Investments Commission, whilst also handling the recent enactments under the Companies Act 2006. It is always interesting.

the best business Q What’s lesson you’ve learnt so far in your career? things simple.

A Keep Complicating matters unnecessarily mitigates against real understanding.

– in business or Q Who beyond – inspires you? thought about John Lennon, A INelson Mandela and others but my thoughts kept coming back to my mother: hardworking, loyal and the most resilient optimist.

did you work before Q Where joining Carillion? spent eleven years at English A IChina I have seen most Clays plc until it was

taken over by the French company, Imetal in 1999. I was part of a small defence team based in London and it was an incredibly intense but fascinating time.

portrait: simon hadley

is involved in the Q Carillion construction sector, one of the areas hit hardest by the recession. How has the business fared over the past year? is in fact the UK’s A Carillion leading support services company and, despite a challenging market, has fared well delivering a strong first-half performance in 2009 with revenues up 13% at £2.7bn and profit before tax up 92% at £51.9m. The expectation is that we will deliver materially enhanced earnings in 2009. Only

things in corporate life so not much troubles my sleep.

However, I do find inequality and greed troublesome around 7% of Carillion’s profit came from UK construction in the first half of 2009, which was similar to the contribution from UK construction in 2008. Of this 7%, around 5% came from Government customers and sectors that we believe will be more resilient to potential future cuts in Government capital expenditure, such as education and health.

did you want to do Q What when you left school? writer or market A Musician, gardener (my father’s profession) were all contenders.

used to work with Sir Q You Neville Simms, the new Chairman of Equiniti. What qualities do you think he has brought to Equiniti?

A Extensive experience, leadership and a network as good as any in British industry.

us something about Q Tell you that may surprise us... play guitar in a band called A IStand Naked for Peace.

However, in the late 1970’s I played in a punk band called ‘The Plague’ under the alias Reggie Mental.

keeps you awake Q What at night? several rights issues, a A After demerger, major acquisitions (the last two being Mowlem plc and www.equiniti.com > 25

snapshots Equiniti and M&S team up in secondment Kathryn Earles moves client side in what proves to be a win-win situation for Marks & Spencer

My aims as the new CEO Wayne Story, the new CEO of Equiniti, shares his plans for 2010 in a personal message “I hope you have all seen the announcement regarding my appointment as CEO, and I wanted to give you an update on our plans for 2010. I have been Managing Director – Operations at Equiniti for the past 12 months and, during this time, have focused primarily on enhancing service levels.

We are making excellent progress and our focus continues on delivering the outstanding service you have come to expect from us. In the past year, we have invested in our Contact Centre, fully implemented our Sirius system as Business as Usual, and re-engineered our operational processes to drive forward service excellence.

I am delighted to have been appointed as CEO for the next phase of the journey, which I believe will see us continue to enhance our service, delight our “I am delighted to clients, their shareholders and have been appointed employees, and harness our key as CEO for the next assets to drive growth through phase of the Equiniti product extensions and acquisition.

My time at Equiniti has given journey which I me a unique understanding of believe will see us the detail and spectrum of our continue on our services as we work to deliver outstanding results and value to enhancements of service and quality” our clients. As with any service business, our people are our greatest asset, but when asked what sets us apart from our competitors and makes us a market leader, I truly believe it is the breadth and wealth of talent and experience we have within our organisation and I am keen to continue to develop this.

I am confident about the success we will deliver both for ourselves and on your behalf in the coming year. I have met many of you in my previous role and in the coming months fully intend to see more of you to answer any questions you may have.

However, if you do have anything you would like to discuss, feel free to email me at wayne.story@equiniti.com.”

25 > Equiniti Magazine | winter 2010

To further develop and strengthen the relationship between Equiniti and one of its largest clients, Equiniti Relationship Manager Kathryn Earles was seconded to the Marks & Spencer Secretariat team for 12 days over a six-week period, to support the company in the run-up to its high-profile July 2009 AGM. During the secondment, Kathryn undertook a number of tasks, including the logging of over 8,000 shareholder feedback cards; researching companies recently requisitioned by shareholders for AGM resolutions; preparing draft minutes for the 2009 AGM and resolutions for Companies House; and assisting shareholders and employees with queries through the 'bat phone' (the M&S Secretariat shareholder helpline).

This gave Kathryn a fantastic development opportunity, to gain a better understanding of our clients’ work and feed back to the Equiniti Relationship Management team.

We will now be better equipped to support M&S in the preparation and execution of future AGMs.

Commenting on the secondment, Kathryn said: “As a Relationship Manager, I act as the central point of contact for my portfolio of clients, connecting the different operational areas of the business, satisfying our obligations to the client, shareholders and employees. Through knowing and understanding my client’s needs and objectives, I work with them to find appropriate solutions and build a long-lasting partnership.

“Being able to use my experience and understanding of shareholder issues, gained from working with Equiniti, to offer such direct support to a client like M&S was very rewarding.”

Kathryn added: “The secondment also gave me a unique insight into the secretariat of a major FTSE 100 client and direct access to key client stakeholders and was a really positive and enjoyable experience.”

Lesley Brownett, M&S Deputy Secretary, commented: "It was a great benefit to have someone working with us, directly liaising with shareholders in the run-up to our AGM. Taking that learning back into Equiniti is a real win-win for our partnership as we continue to improve our service to shareholders."

Did you know?

Equiniti manages the UK’s largest share register of more than 2.8m shareholders

for your diary equiniti by numbers

Equiniti ICS shares some statistics to give an insight into the work of its Payroll Services Department

115

The number of staff in Payroll Services division

200

Number of payrolls processed per month

1.5m

Payslips issued per annum

£150m The sum paid in salaries for our clients every month

25,000 Staff paid in the NHS per month

2009

Won the Deloitte Best Managed Companies award!

For more information on Payroll Services, please contact Alan Foley at Alan.Foley@equiniti-ics.com or Rachel Daly at Rachel.Daly@equiniti-ics.com

More businesses turn to Equiniti for service provision The best test of any business is the loyalty of its customers and Equiniti is proud of the long relationships it has developed with many of its clients – the average length of that relationship is 18 years.

The last 12 months have also seen new clients appointing Equiniti , covering the range from FTSE 350 to AIM markets, some newly listed and some privately owned.

Amongst the bigger organisations making this move was Anglo Pacific Group PLC, which completed the transfer of its register to Equiniti in November.

“We would like to extend a warm welcome to those companies that have chosen Equiniti as their registrar and employee share plan provider in the last year,” said Iain Lawrence, Head of

Business Development. “We are delighted that we could demonstrate our commitment to service quality combined with competitive and transparent value and will ensure this is delivered. The start of the journey with every new client is always exciting and we can’t wait to show you why our clients decide to stay with us for so long.”

The four pillars of CSR In November 2009, Equiniti published its first Corporate Social Responsibility (CSR) policy – laying out its framework and successes to date, and detailing how CSR fits into its operations.

Equiniti’s policy is built around four pillars: environment, people, stakeholders, and communities.

These pillars ensure that Equiniti operates in an ethical and socially

responsible manner as it pursues its business aims and objectives.

The CSR strategy encompasses an evolving programme of activity.

In early 2010 Equiniti will publish an enhanced charity and community policy, which reflects the company's status as a leader in its marketplace.

A national charity partner will be nominated and work will commence with local communities and charities across all Equiniti locations as it strives to marry its charitable approach with an increased focus on employee engagement.

For more information on our CSR policy visit www.equiniti.com

Forthcoming dates Financial Reporting Council: Consultation on the revised UK Corporate Governance Code (Combined Code) 5 March

Info: www.frc.org.uk/ corporate/combinedcode.cfm European Commission: Consultation on the International Financial Reporting Standard for Small and Mediumsized Entities 12 March

Location: Switzerland Info: www.ec.europa. eu/internal_market/ consultations/2009/ifrs_for_ sme_en.htm ICSA Corporate Governance Conference 17 March

Location: Congress Centre, 28 Great Russell St, London.

Info: www.icsatraining.co.uk/ disp.php?ID=111 Equiniti Registration User Group, London 23 March

Location: The Northumberland, 8 Northumberland Avenue, London WC2N 5BJ Info: contact@equiniti.com GEO 11th Annual Conference & Awards 14–16 April

Location: Chicago, USA Info: www.globalequity.org/ geo/node/1388 ESOP Conference 8–9 July

Location: Cannes, France Info: www.mhcc.co.uk/esop/ esop/default.asp?nav=events

www.equiniti.com > 26