Category: Corporate Governance

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The main steps to follow for opening a business abroad

Before starting a business in a foreign jurisdiction, it is important to follow a number of steps that will ensure a good understanding of the local company formation principles and laws as well as the cultural or business particularities. Opening a company in Dubai will be different from starting a business in Germany and investors should be informed of the general incorporation conditions in the jurisdiction where they decide to base their business.

Know the local company formation rules

Company incorporation is jurisdiction-specific, meaning that each country will have its particular set of rules for the incorporation and the registration of the business, as well as for obtaining permits and licenses for running the company.

Investors who open a business or a foundation in the Netherlands will need to comply with the Company Law in the Netherlands and register the company with the Chamber of Commerce or KVK.

Some countries offer more attractive business conditions, compared to others, especially for startups, in terms of company taxation and the overall ease of doing business. Researching the particularities of a jurisdiction is the key for finding a suitable business location.

Request professional aid

In some situations, reaching out to a local law firm or professional company formation specialist can be a good solution. Investors in the United Kingdom can also request professional defense solicitor services if they have been the victims of criminal business acts while performing an economic activity in that country.

Research the market

Understanding the local needs and preferences, as well as performing a targeted market research, can be a key ingredient for businesses that are successful in foreign markets. Due diligence is important when starting a business abroad. For example, when opening a luxury car rental business in Dubai, investors can start by analyzing the competition, the market particularities and the preferences of the clients in order to determine how their services can meet the needs of the clients.

Researching the conditions for doing business and the general steps for company formation, understanding the business and cultural differences as well as getting to know the market and the clients are all good steps when deciding to open a business abroad.

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What does ULEZ have in store for us?

The world is constantly changing – and the world of driving is no different! The concept of the electric car is gradually growing as the UK government plans to eliminate diesel and petrol-powered cars by 2040.

However, before that is the introduction of the Ultra Low Emission Zone (ULEZ) in central London. Here, alongside Lookers who offer Ford Motability Cars, we look at what ULEZ is and what it means to motorists.

Just what is ULEZ and when can we expect it to come into play?

To travel in the ULEZ, your vehicle will need to meet a new, tighter exhaust emission standard. Failure to do so will see you needing to pay a daily charge if you want to travel inside the area of the ULEZ.

The introduction of an Ultra Low Emission Zone is intended to help improve the air quality in central London. Currently, air pollution is one of the biggest challenges London is facing. As road transport is the biggest source of the health-damaging emissions in London, the government is tightening its rules regarding traffic.

ULEZ is set to come into play from 8th April this year, with the area to be expanded from 25th October 2021. This expansion will see the zone include the inner London area. 

How will ULEZ affect your vehicle?

If your car doesn’t meet the criteria, you’ll face a £12.50 charge each day. This charge runs every day of the year too.  Generally, if you own a petrol car that was registered after 2005, it will meet the ULEZ standards. If you own a diesel car, it’s normally those registered after September 2015 that will be exempt from the charge.

If you own a van, minibus or specialist vehicle, you’ll face slightly different regulations than those in a car. Minimum emission standards are:

  • Petrol: Euro 4
  • Diesel: Euro 6

Petrol models sold from January 2006 should meet these standards, as too should diesel vans which were sold from September 2016. Like cars, the daily fee for those which don’t meet the standards is £12.50.

Motorbikes and mopeds also carry the same cost for failing to have a model that meets the standards. Generally, motorbikes, or similar vehicles, will reach the required Euro 3 standards if they were registered with the DVLA after July 2007.

The cost rises considerably for lorries, coaches and large vehicles that aren’t up to the required standard. Any that don’t meet the Euro VI standards (usually those registered before 2014) must pay a daily charge of £100.

It’s important to note that these costs are in addition to any applicable Congestion Charge.

Are there any exemptions?

If you live within the boundaries of the ULEZ, you’ll receive a ‘sunset period’. This entitles you to a full discount of the charges, so you have more time to have a vehicle that meets the required standards. This discount will run until 24th October 2021. After this time, residents must pay the full charge.

Also benefitting from a sunset period are drivers with a disabled or disabled passenger vehicles tax class. Their exemption runs until 26th October 2025, unless their vehicle changes its tax class. Blue Badge holders, however, must pay the charge from its introduction date.

If you own a historic vehicle and it has historic vehicle tax, you’ll be exempt. This is the case unless the vehicle is used commercially. Agricultural and military vehicles are also exempt, as are certain types of mobile cranes.

While the ULEZ may be an issue for drivers of older cars, it’s important to remember that it has been designed to help us in our everyday life and is just another step on the government’s drive for a cleaner UK. It’s clear that the government is aware of the issue that pollution is causing and is trying to eradicate further damage to our planet.

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Sectigo Delivers Record Quarter of Growth Underpinned by More Than 35% YoY Enterprise Sales Increase in Q1 2019

Addition of Top Brands, Along with New Email Encryption and Digital Signing Product, Drive Sales for World’s Largest Commercial SSL Provider

Sectigo (formerly Comodo CA), the world’s largest commercial Certificate Authority and a leader in web security solutions, today announced a larger than 35% year-over-year (YoY) increase in enterprise sales during the first quarter of 2019, fueled by the adoption of the company’s Certificate Manager, Private CA, S/MIME, and IoT Manager enterprise solutions. Sectigo also kicked off 2019 with an expanded partner program, the release of its Zero-Touch Deployment S/MIME product, a new strategic IoT alliance, and receipt of numerous awards.

Sectigo’s record quarter follows a breakthrough year and a complete corporate rebrand in November of 2018. The company has experienced rapid growth since expanding beyond TLS/SSL certificates to offer solutions that protect enterprises of all sizes from increasingly sophisticated web-based threats across websites, IoT devices, internal infrastructure, and cloud services.

“After delivering a strong 2018 where Sectigo’s growth was more than twice as fast as the overall market, we have accelerated our efforts by doubling down on addressing the enterprise’s most pressing needs through product innovation,” said Bill Holtz, CEO, Sectigo.

“Enterprises are embracing automated certificate management to facilitate discovery, installation, and renewal for their vast inventories of private and public certificates across diverse use cases and operating systems. These capabilities are essential to securing our complex enterprise environments and their increasing use of virtualization, containerization, mobile devices, IoT, and DevOps. Certificate automation enables strong identity in these complex environments and protects against costly outages caused by unexpected certificate expirations,” Holtz added.

Sectigo highlights in Q1 2019 include:

Enterprise growth – Dozens of marquee brands, spanning retail to technology sectors, enlisted Sectigo as their trusted partner for certificate management. Sectigo Certificate Manager provides enterprises with complete visibility and lifecycle control over any public and private certificate in its environment all from a single portal.

Product innovation – In February, Sectigo introduced the industry’s first Zero-Touch S/MIME solution to combat business email compromise (BEC) and other spear phishing attacks and increase compliance with regulations like HIPAA/HITECH, GDPR, and the U.S. Department of Defense’s DFARS. The innovation modernizes email security and encryption by using automation to deploy digital certificates across every desktop, tablet, and mobile device in an enterprise.

Expanded IoT ecosystem – Sectigo and Kyrio, a subsidiary of CableLabs, formed a strategic alliance to provide the expertise needed for IoT projects to be designed, architected, built, and deployed with security in mind from day one. Multi-vendor ecosystems, including the Open Connectivity Foundation (OCF), CBRS WInnForum, and SunSpec Alliance, have already chosen Kyrio and Sectigo to manage their global PKI deployments.

Industry awards – Sectigo won five company awards and received three executive honors in Q1.
Cyber Defense Magazine’s InfoSec Awards – CEO Bill Holtz was named the Most Innovative Chief Executive of the Year, Sectigo Certificate Manager earned the Hot Company Identity Management Award, IoT Manager was selected for Publisher’s Choice IoT Security, and Zero-Touch S/MIME won the Next-Gen Deep Sea Phishing Award.
2019 Info Security PG’s Global Excellence Awards® – Sectigo IoT Manager was awarded bronze in the New Product or Service of the Year category, and CMO Jonathan Skinner won gold for Marketing Professional of the Year.
2019 Cybersecurity Excellence Awards – Sectigo won silver for Most Innovative Cybersecurity Company, and gold for Cybersecurity Marketer of the Year (for CMO, Skinner).

Channel expansion – Sectigo unveiled a revamped Channel Partner Program, enabling partners to grow into new cybersecurity market segments. By teaming up with Sectigo, resellers develop their product portfolios and learn best practices for optimizing the customer experience. After collaborating with Sectigo, ICANN-accredited registrar Uniregistry, saw 53% of users who expressed interest in their UniSSL products complete purchases.

Thought leadership – Sectigo launched Root Causes: A PKI and Security Podcast to frame public conversations and discuss key issues, breaking news, and major trends in digital certificates and PKI. Co-hosted by Sectigo industry veterans Jason Soroko and Tim Callan, Root Causes is now live on iTunes, Spotify, Google Play, SoundCloud, Blubrry, and Stitcher.

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How important is online branding and marketing for your business?

Branding and marketing and the effects on a business

 

Can we bring short-term sales goals and long term value together through brand-building and marketing?

 

Known as Thomson Holidays, the holiday company decided to undertake a total rebrand, becoming TUI, in 2017. CMO Kate McAlister explained that upon rebranding, their brand awareness increased by 36% in under one year. 

 

As indicated in the graph, 2017 saw a boom in stock prices and google searches. Furthermore, this is a perfect example of the positive effect branding can have on a business’ stock price and google search.

Branding and marketing is a consistent combination of several factors that come together to create a company’s image. The cold Coca Cola you’ve been craving, or the newest Apple iPhone upgrade. Brands, brands, brands. We recognise these immediately – we trust them.

“Strong brands performed 20% better than weaker brands.”

 Digital marketing is also an essential part to build whether it be B2C or B2B.

 

Statistics show that 32% of businesses plan one year ahead, with consideration for the ways in which the marketing industry will change through digital technologies.

 

Text Local researched the ways in which customer satisfaction was affected by mobile marketing and general mobile readiness.

 

Bringing together real-life data and hidden data, Text Local have been gathering information about the levels of mobile website speed of various businesses and the positive effects it had on customer happiness.

When it comes to customer satisfaction there are many platforms for online reviews. Online reviews not only give potential customers a snapshot of the quality of your product or service, they are also very beneficial to your search rankings and search page visibility.

Comparing business success metrics, we can conclude that online branding and digital marketing is something to consider for 2019 – improving customer satisfaction, business efficiency, Google rank and a boom in revenue.

 Sources: Google, Text Local

Defining good Corporate Governance
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Defining good Corporate Governance

How would you define corporate governance and why is it important today?

Corporate governance refers to check and balance mechanism to assure the best interest of company (firm) is upheld by all decision makers effectively – especially at the board, senior management and (controlling) shareholders – which would become the foundation of all corporate decisions and actions in fulfilling their corporate mission-vision toward triple bottom line objectives (Profit/Economic Value, People/Social Value, and Planet/Environmental Value).

What in your view does corporate governance bring to the industry?

It would bring tremendous positive effect to the ‘responsible’ industry who really care about their sustainability and continuation of civilization, welfare, and commonwealth.

How does your company implement it?

We assure the corporate governance is implemented across several layers:
• Cultural;
• Process;
• Structure.

Cultural means that Good corporate governance principles become the values that people believed in, starting from the shareholders, board members and executives. There have been conscious efforts made to assure those values become the working fundamental assumptions on every key decision making process. Whereas, positive artefacts have also been encouraged to recognize and award positive and ethical behaviours at all levels.

Process means to consider/recognize/ explicitly the principles of good corporate governance as guiding principles, consistently applied in all company’s business process for example treating fairly our minority shareholders, treating fairly our suppliers/employees, putting transparency at its best to the investors/shareholders via transparent corporate reporting, assuring accountability is crystal clear at every level of business processes, and embedding corporate social responsibility at our strategy and key business process such as using environmental friendly papers, reducing carbon footprint in our production process, and so on.

Structure means overall organization structure follows the principles of having check and balances starting from the Board level through the composition of their executive and non-executive directors, the existence of relevant boards’ committee, the existence of internal oversight/assurance roles, and how do they engage their external auditors and stakeholders at large through whistle blower system (which is run by trustworthy external independent party). Organization structure encourage people take up their accountability clearly and no ambiguity.

How does corporate governance affect tax legislation and cross border planning?

Albeit the tax legislation and regulation which are different from one country to another, the principles of corporate governance are universal. Therefore, it might affect some structural related issues but remain universal at underlying and fundamental aspects to promote transparency, accountability, responsibility and fairness.

What are some of the recent trends and developments in how to implement good corporate governance practices?

In my view, the trends and developments in how to implement good corporate governance practices are pretty much different from one region to other region, for example Africa Sub-Sahara who focuses on getting more international investors to the region, and therefore they emphasize on adopting and practicing more transparency but still not much on accountability, social responsibility and fairness. It might also be a case for Latin America, Middle East and North Africa, and some eastern European countries. In other regions, the challenges might have already shifted to other focuses, for example South East Asia which are now strengthening their regional corporate governance platform where many large corporations have already put their feet to become regional/international players rather than local, and therefore placing good corporate governance practices even higher than before.

Nevertheless, one common thing applied across continent and regional economic cooperations remain, i.e. the need of better board members (composition, evaluation) and the urgency of enterprise risk management good practices at the board level which require higher practices of risk governance – how do they address the uncertainties, enhance the organization’s capability to exploit opportunities whilst dealing effectively with the risks associated in pursuing their strategic/operational/compliance objectives.

What support is available to businesses looking to implement new governance statutes or looking to respond to allegations of wrong doing?

We work with the local Institute of Directors, National Committee on Governance, Consulting firms, Risk Management Associations, and with IFC-World Bank in many developing countries. To a certain extent, we could also ask some helps from academicians of respectable universities.

Company: Dr. Antonius Alijoyo ERMCP, CERG.
Web Address: www.crmsindonesia.org
www.erm-academy.org
Telephone: 62-813-1559-8888

Opus Bank Announces Further Expansion of Its Merchant Bank
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Opus Bank Announces Further Expansion of Its Merchant Bank

Opus Bank has announced that Paul E. Kacik has joined Opus as Managing Director, Head of Healthcare Investment Banking within Opus’ Merchant Banking division. Mr. Kacik, a 24-year investment banking veteran, is responsible for providing M&A advisory services, debt and equity capital solutions, and other strategic advisory services to healthcare providers and practitioners.

Stephen H. Gordon, Founding Chairman, Chief Executive Officer and President of Opus Bank, stated, “Over the years, banks have become exceedingly product focused and have failed to effectively provide broader and more sophisticated client centric solutions, including access to alternative sources of capital, M&A and other strategic advisory solutions. The addition of Paul joining our Merchant Banking division enables Opus to integrate our niche Healthcare Banking focus with complimentary investment banking expertise, better positioning Opus to provide a comprehensive and customized financial and strategic solution for those within the healthcare industry.”

Dale Cheney, Senior Managing Director, Head of the Merchant Banking division, stated, “We are pleased that Paul has joined Opus to lead our Healthcare Investment Banking efforts. He is a highly-talented and experienced investment banking professional whose background complements our merchant banking model of providing a comprehensive and integrated principal investing and advisory solution to middle-market companies.”

Mr. Kacik joins Opus’ Merchant Banking division from Duff & Phelps Securities, LLC in Los Angeles, where he served as Managing Director – Healthcare Investment Banking and was responsible for the origination and execution of middle-market Healthcare M&A transactions. From 2009 and following its acquisition by DA Davidson & Co. in 2011, Mr. Kacik served as Managing Director – Head of Healthcare Investment Banking with McGladrey Capital Markets, LLC where he led the national healthcare investment banking practice and was responsible for the oversight of all origination and execution efforts in the healthcare sector. From 2004 and following its acquisition by Wells Fargo Securities in 2006, Mr. Kacik served as Senior Vice President – Head of Healthcare Investment Banking with Barrington Associates, where he was responsible for originating and executing corporate finance transactions, including buy and sell-side M&A, equity and debt fundraising, and private equity recapitalizations. Earlier in his career, Mr. Kacik served in banking and finance roles with Smith Barney, Solomon International, LP, and Technomark. LTD. Mr. Kacik holds a B.S. from the University of Southern California and an M.B.A. from the Sir John Cass Business School – City University, London, England.

Bank of America Expands National Community Advisory Council
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Bank of America Expands National Community Advisory Council

The National Community Advisory Council (NCAC), a diverse group of nonprofit and private-sector leaders convened by Bank of America, recognizes its 10th anniversary with the addition of five new members representing environment and sustainability expertise. Meeting this week in Washington, D.C., the group of senior consumer, community and academic leaders gathers twice a year to advise the bank on critical issues impacting society.

Formed in 2005, NCAC initially provided guidance on the bank’s community development lending and investment activities. While continuing its focus on community development and consumer policy issues, the council’s concentration has evolved into a broader focus on environmental, social and governance (ESG) issues and performance.

As part of the broad portfolio of climate change goals and transformative finance initiatives the bank has engaged with several leading environmental organizations. This led to an increased focus and expansion of environmental NCAC membership, which now includes:
• Armond Cohen, executive director, Clean Air Task Force
• Rick Fedrizzi, founding chairman and CEO, U.S. Green Building Council
• Bob Perciasepe, president, Center for Climate and Energy Solutions (C2ES)
• Andrew Steer, president and CEO, World Resources Institute
• Mark Tercek, president and CEO, The Nature Conservancy

Another recent addition to the NCAC roster is Jane Nelson, a globally recognized leader in the CSR arena who currently serves as director of the Harvard Kennedy School’s Corporate Social Responsibility Initiative.

“Our members challenge us and collaborate with us to strengthen the impact of our collective work in the communities we serve, and we welcome new voices around the table to further that goal,” said Andrew Plepler, Corporate Social Responsibility executive, Bank of America, and NCAC chair. “We are proud that what started out as a conversation about community development has evolved into a decade of engagement on some of the biggest issues facing society.”

This week’s meeting will provide an opportunity for NCAC members and bank executives to sit down together and engage in meaningful dialogue on a broad range of topics, including neighborhood stabilization efforts around affordable housing, the state of civil rights, and environmental sustainability issues. These meetings are meant to address important topics and open the lines of communication between NCAC members and the bank on the state of the economy and how these collaborative efforts can lead to meaningful solutions.

“Bank of America has long set a high bar for social responsibility programs that enhance the communities they serve,” said Rick Fedrizzi, founding chairman and CEO, U.S. Green Building Council. “I’m honored to be part of its National Community Advisory Council, and look forward to serving with such an exceptional group.”

The six new members join a seasoned group comprised of nationally recognized consumer advocates, academic leaders, civil rights leaders, and community development and environmental experts

Scepter Partners Backs Former CEO of Santos with $5.1 Billion
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Scepter Partners Backs Former CEO of Santos with $5.1 Billion

 Scepter Partners, a standing syndicate of ultra-high net worth individuals and sovereign investors, confirms that on 20 October 2015 it made a non‐binding indicative proposal (“Indicative Proposal”) to acquire 100% of Santos Limited (“Santos”), a significant independent oil and gas company in Australia.

The offer was at A$6.88 (US$4.97) per share in cash by way of a scheme of arrangement subject to a range of market‐standard conditions which equates to a market value of equity of A$7.1 billion (US$ 5.1 billion).

The Indicative Proposal, if implemented, would deliver the following to Santos’ shareholders:

26% premium to Santos’ closing price on 19 October, being the last trading day before the proposal was submitted.
38% premium to Santos’ 1-month volume weighted average (VWAP) price up to 19 October.
40% premium to the VWAP since 21 August 2015 which was the date on which Santos announced its strategic review.
John Ellice-Flint led Santos management to create over A$8 billion (US$5.8 billion) of value while the company was under his stewardship from December 2000 to June 2008. Mr. Ellice-Flint is widely regarded as one of the foremost oil and gas executives in Australasia.

Mr. Ellice‐Flint would serve as Executive Chairman of the privatized Santos should any Indicative Proposal ultimately succeed. Mr. Ellice‐Flint commented, “Our vision is to build Santos into an Asian oil and gas leader, based in South Australia, harnessing the skills and experience of the Santos workforce.”

With offices in New York and representative offices in London and Beijing, Scepter was founded by financier Rayo Withanage to acquire large assets with a focus in natural resources, infrastructure, real estate and media and telecommunications. Scepter’s global merchant banking activities are led by natural resources investment banking veteran Anthony J. Steains and his former Blackstone Asia Advisory Partners team.

Mr. Steains commented, “Scepter considers that this Indicative Proposal, if implemented, would provide Santos shareholders with an attractive premium and the certainty of cash in the face of significant future uncertainty. Scepter’s plan would be to build and grow a significant oil and gas business that advanced the presence of Australian companies in Asia.”

As a principal investor, Scepter is supported by the discretionary assets of a core syndicate of investors who have combined resources to invest in large transactions globally. Scepter is represented in this transaction by Highbury Partnership and Gilbert & Tobin. For more information, please visit www.scepterpartners.com.

Budget Blues
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Budget Blues

The investment organisation has announced that the newly announced budget will make life difficult for customers and businesses alike and its success depends heavily on whether businesses will be able to rise to the challenge, according to their summer forecast.

Against a background of tax rises and a sharp squeeze on welfare spending, reconciling the Chancellor’s fiscal goals with maintaining healthy growth in the economy will require businesses to step up their investment and export plans, according to the firm. They also suggested that if this did not occur then the adjustment will have to come through slower growth and imports.

The club’s forecast predicts that companies will respond positively to the Chancellor’s challenge. Business investment is
expected to accelerate to 7.4% in 2016, from 5.1% this year, and 7.1% in 2017. An improvement in the UK’s overseas investment income and exports of services will also provide some of the room needed for the Chancellor’s budget surplus and help to rebalance the economy away from the consumer spending-led growth prevalent this year. However, investment and exports are unlikely to extend far enough to prevent growth slowing over the next few years. As a result the EY ITEM Club expects GDP growth to reach 2.7% for 2015 and 2016 before it slows to 2.4% in 2017 and 2018.

The Chancellor’s plans for the UK economy are serious gamble which could go either way, according to Peter Spencer, Chief Economic Advisor to the EY ITEM Club.

‘The Chancellor has thrown down the gauntlet to businesses in a risky strategy that will require them to rise to the challenge and respond positively to his Budget announcements. Companies will have to invest in plant and skills to boost productivity and allow them to pay higher wages. However, we expect this strategy to be only partially successful and we are likely to see growth and imports slow down as well.’

Mark Gregory, EY’s Chief Economist, added in his comments that the living wage could potentially cause major problems for businesses.

‘Businesses will have to dust down their export and investment plans and increase spending and borrowing levels. As labour is becoming more expensive, following the Chancellor’s announcement for the introduction of a living wage, investment levels should increase. This could be the time for businesses to consider investing in technology as a way to reduce labour costs.’

Parties Fail to Address Needs of Renewables Industry in Election Campaign
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Parties Fail to Address Needs of Renewables Industry in Election Campaign

Renewable energy companies overwhelmingly believe that the needs of the industry have not been properly addressed during the ongoing election campaign, a survey carried out by the Renewable Energy Association (REA) has revealed.

Of the 136 REA members who responded to the survey, 95% said that they did not ‘feel that the political parties are addressing the needs of the renewable energy during this election campaign’.

The Green Party was viewed as the party that would be ‘best for the renewable energy industry’ (29%) with the Liberal Democrats seen as the next best.

Members were less optimistic about the two parties most likely to form a government after the election. Nearly a fifth (18%) of respondents believed that the industry would be in the best hands under Labour, whereas the Conservatives received the support of 15%.

Members also stated the government policies which would be a priority for their business. Over half (56%) stated that the Feed-in Tariff was the most important policy, with the Renewable Heat Incentive close behind on 52%. Moreover, the 2030 decarbonisation target was high on the list of priorities for a significant number (44%) of respondents.

Commenting on the findings of the survey, Chief Executive of the Renewable Energy Association (REA), Dr Nina Skorupska, said:

“These figures show first-hand the concern of renewable energy companies up and down the country at how the political parties are failing to adequately address the needs of our industry.

“The next government will need to show much more leadership early on and face-up to the challenge of ensuring that the UK meets its ambitious renewables targets, which will allow our industry to play a key role if the regulatory environment enables us to expand, innovate and thrive.

“We very much look forward to working with the next government to address the concerns of the renewable energy, ensuring the UK makes the transition to the low-carbon economy that will bring with it cheaper bills, more jobs and greater energy security.”

Government Creates New Business to Save Up to £105 Million in IT Costs
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Government Creates New Business to Save Up to £105 Million in IT Costs

In the past, individual departments paid different amounts to either build their own centres or outsource the service as part of their own locked-in IT contracts. This deal will, for the first time, provide a cross-government approach to buying data hosting services and will save up to £105 million for the taxpayer by utilising the government’s combined buying power. It will also allow government to tap into the latest advances in industry and improve energy efficiency – using data centres that are equipped with the latest technological advancements such as real time dynamic cooling and unique monitoring systems, all within secure compounds.

The new service will be available to the whole of government and the wider public sector. The 3 initial customers are the Department for Work and Pensions, the Home Office and the Highways Agency (operations), and each will be able to use the service on a ‘pay for what you use’ basis which will avoid the risk of being locked into long-term, inflexible contracts.

Minister for the Cabinet Office Francis Maude said:

“As part of this government’s long term economic plan, we’re determined to utilise our unique buying power and become a more intelligent customer. It doesn’t make sense for departments to host their servers in different ways and at different costs, and in the past Whitehall wasn’t even sure how many of these centres there were.”

“With this new joint venture, we will save millions and be able to access the necessary commercial and technical skills in the market to create a thriving new business that will deliver better services and allow government to share in its future success.”

Steve Hall, CEO at Crown Hosting Data Centres said:

“The joint venture company will simplify the data centre services selection process in government and further drive the unbundling of large legacy contracts.”

“It provides publicly-funded, mandated and regulated organisations with a pre-approved contract that leverages the buying power of the whole of government for the fastest, simplest access to secure data centre services.”

Simplification
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Simplification, Not Regulation Is the Solution for Tax Avoidance, says IEA

“Successive governments have developed loopholes specifically designed to reduce tax bills, so it’s hardly surprising to see companies use the very schemes politicians have created. Politicians need to stop moaning and reform the system they set up.

“The UK corporation tax system is monstrously complex, with profits taxed not in the hands of shareholders, but according to very complex rules in particular jurisdictions. It’s inevitable this system is gamed by multinational corporations; for as long as it’s legal it’s unsurprising that companies don’t pay more tax than is due.

“Tax avoidance occurs because our system is overly complex and because rates are too high. If the government wants to reduce tax avoidance it should reduce and simplify taxes.”

Politicians Shouldn't Focus on Regulation to Make UK Labour Market Work Better
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Politicians Shouldn’t Focus on Regulation to Make UK Labour Market Work Better, Says CIPD

With less than 100 days to go until the General Election, the CIPD, the professional body for HR and people development, is warning that regulatory changes shouldn’t form the cornerstone of labour market election promises. According to new research, the UK’s flexible labour market is generally working well in comparison with our international peers, suggesting there isn’t a strong case for the next Government to either de-regulate further or to strengthen employment rights.

The report, Employment Regulation and the Labour Market, indicates that the UK is highly unlikely to get much benefit from more employment regulation or from significant deregulation of the labour market, as it already performs well in comparison to many of its OECD counterparts on a number of measures. The link between the stringency of regulation and labour market outcomes such as productivity or job quality is in many areas either weak or complex and thus difficult to predict. Instead, the CIPD is urging policymakers to focus efforts on improving productivity through a much stronger focus on improving workplace practices while increasing awareness of existing rights and enforcing them more effectively.

The report,commissioned by the CIPD, and compiled by The Work Foundation, considered the impact of employment regulation on broad labour market measures. The Nordic countries (Denmark, Sweden, Finland and Norway) and the Netherlands score consistently well and the UK sits comfortably mid-table or above on most indicators. However, there are some economies in Southern and Eastern Europe, such as Spain, Italy and Greece, where the data does suggest that labour market outcomes could be improved by greater liberalisation.

The report indicates that despite the UK rating below average among OECD countries on measures of employment protection, the quality of employment in the UK compares more favourably with other countries than is often thought to be the case:

-In comparison to other OECD countries, the UK has a high share of permanent employment – 79% of UK workers in 2013 were on a permanent contract, compared to 77% in Germany and 65% in Italy

-Compared with the European average, the UK has a larger proportion of ‘good’ jobs and a smaller proportion of ‘low quality’ jobs. Overall 65% of jobs in the UK are rated as good jobs*, compared to just 54% in Italy, 50% in France and 49% in Germany

-The average weekly hours worked by employees in the UK in 2013 was 36, which was in line with the OECD average. However the UK does have a comparatively high proportion of long hours jobs (those involving 50 hours or more a week) with 12% falling into this category

-In all, 84% of UK workers say they are satisfied with their working hours (EU 28 average 80%) and 77% report they are satisfied with their work-life balance (EU 28 average 74%). UK workers don’t seem much more fearful of losing their jobs than workers in countries with stricter employment protections (12-14% across UK, Germany, France and Italy) and over 40% said they were either optimistic or very optimistic they could find another job at a similar wage.

Ben Willmott, head of public policy at the CIPD said: “The public debate can often seem polarised between calls for greater regulation and employee protections from trade unions and, at the other end of the scale, employer organisations that want to reduce regulatory burdens on business. Our report shows that more or less regulation is not the issue. Overall, UK workers are more satisfied with their jobs, working hours and ability to progress than their counterparts in France, Germany and Italy. The solution to some of the challenges we face in the UK such as poor productivity and the high proportion of low paid jobs in the economy doesn’t lie in quick legislative fixes. We don’t need yet another employment bill or another zig-zag between more and less regulation. Instead, what we need is a fundamental review of the UK’s skills policy to understand how we can generate more high-skilled jobs and better progression routes for those in low-skilled and low-paid jobs. We also need a much greater focus on improving workplace practices in the areas of leadership, management and HR capability to increase demand among employers to invest in workforce development.”

While the UK performs well overall, it performs comparatively poorly in three important areas – productivity, low pay and the integration of young people into the labour market.

-The UK performs poorly on productivity compared to many of its international peers, however, there seems little association between labour market regulation and productivity. Between 1985 and 2013, relative productivity compared with the US fell in relatively lightly regulated UK, New Zealand and Canada. Among the more highly regulated economies, relative productivity fell in Italy and increased slightly in France and Germany

-While the UK doesn’t have the highest share of low-paid jobs in the OECD, it does sit uncomfortably in the top quarter. The UK, US and Canada all have 20-25% of employment in low-paid work compared with 18% in Germany and 10% in Italy

-The UK sits in the lower half among OECD countries in terms of its youth unemployment rate and in the bottom quartile among EU 28 countries on the youth unemployment ratio.

Willmott concludes: “It’s clear that the UK struggles on productivity, low-pay and unemployment among young people, but the wider picture is much more positive. The stage seems set for a good performance but something is missing in the delivery. We have good investment in ICT, above-average shares of knowledge-intensive industries and better quality employment than many European economies, including some with much higher productivity levels. Rather than meddling with regulation, a renewed focus on enforcing and improving awareness of existing rights among employers and workers is needed to help curb any abuses of employment rights where they do occur, as well as a much more explicit policy focus on the workplace to improve practice and productivity.”

The CIPD has suggested the creation of a Workplace Commission to help support a more strategic approach across government to developing policy on the workplace with the objective of improving productivity and enhancing job quality where poor practice exists.

UK Regulators Network (UKRN) Publishes Report on Affordability
Corporate GovernanceRegulation

UK Regulators Network (UKRN) Publishes Report on Affordability

The report focuses on the energy, communications and water sectors. On average, energy and communications household spend is at 5%1 and 4%2of total household spend, respectively. In water, 1.4%3 of household income is going towards paying for this service.

The report considers:

-How affordability issues are approached in different regulated sectors.

-What data gathered from regulators and other sources show about the nature of affordability issues in these sectors.

-The drivers of affordability issues and the role of regulators in addressing these issues.

Work will now begin on the second phase report which will consider how to address vulnerability across regulators. It will also look at what could impact bills in the future, particularly as a result of infrastructure investment. UKRN members will work closer than ever to tackle some of the issues identified in the report and align their work to support vulnerable consumers.

White House Launches Tax Inversion Crackdown
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White House Launches Tax Inversion Crackdown

The White House wants to limit US tax inversionPhoto sourced from Shutterstock

The action, being taken largely in response to US-based firms looking to redomicile to countries with lower corporate tax rates, is targetting those seeking mergers and acquisitions with overseas firms.

However, the tax avoidance tax practice has been a long-held target of President Barack Obama and his administration. He has subsequently charged a new department within the US Treasury to make tax inversion less appealing to corporates.

Removal of hopscotch loans

The plans being put in place will make it more difficult for profits made in other countries to be accessed by US firms inverting their tax base.

The removal of ‘hopscotch loans’, lending facilities set up between foreign business units and the US business, will be the main route of approach for this.

Another step to limit tax inversion will see the new treasury department introduce further restrictions for US owners of inverted firms. Once the plans are brought into place, newly inverted firm owners will only be able to own up to 79% of the company.

Not adding up financially

As a result, the department says, there will be some inversion deals that simply do not add up financially.

Applauding the actions being taken by the treasury and the treasury secretary Jack Lew, President Obama said in a statement.

“We’ve recently seen a few large corporations announce plans to exploit this loophole, undercutting businesses that act responsibly and leaving the middle class to pay the bill, and I’m glad that [the treasury secretary] is exploring additional actions to help reverse this trend,”

A recent high profile inversion deal saw US fast food chain Burger King acquire Canadian coffee and doughnut firm, Tim Hortons. The firm is now able to benefit from Canada’s corporate tax rate of 26.5%, nearly a full 10% under the US rate of 35%.

Tesco Launches Inquiry and Suspends Execs Over Profit Exaggeration
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Tesco Launches Inquiry and Suspends Execs Over Profit Exaggeration

Tesco’s overstatement was more than a little – Picture sourced from Shutterstock

The firm, which is understood to have suspended its UK managing director Chris Bush as one of the four, overstated its profit guidance by £250 million, a quarter of its announced profits to date.

Chris Bush will be replaced throughout the duration of the investigation by Robin Terrell, the multi-channel director for Tesco.

Disappointment would be an understatement

Launching the investigation being led by Deloitte, the CEO of the firm, Dave Lewis said that to say he was disappointed would be an understatement. Mr Lewis, who only took over at the top of the firm at the start of September said:

“It doesn’t take away from what I’m able to build at Tesco”.

Mr Lewis also went on to say that the suspensions were not as part of any disciplinary action being taken by the firm or should be perceived as an admission of guilt in regards to the individuals involved.

Uncertain for investors

With shares in Tesco falling by over 8% in morning trading on the London Stock Exchange, market analyst Robert Gregory told the BBC Breakfast programme:

“Investors are really uncertain about Tesco at the moment and its future direction.”

Clive Black, an analyst at Shore Capital said:

“Such an announcement is not the stuff of a well operated FTSE-100 organisation.”

At the end of August, the retailer said its expected trading profit for the first half of 2014 was around £1.1bn. In its latest statement to the stock market however, Tesco said this overstatement was largely as a result of an:

“accelerated recognition of commercial income and delayed accrual of costs”.

It also apportioned some of the blame to accounting issues with its suppliers.

Alerted to the error by ‘an informed employee’, Tesco said that the Financial Conduct Authority, the financial regulator for the UK, had been informed.

US Targets Tax Inversion Firms
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US Targets Tax Inversion Firms

The plan will see the Internal Revenue Service (IRS) introduce steps to prevent the practice known as tax inversion, with President Barack Obama denouncing it as ‘unpatriotic’.

The Associated Press quoted Obama recently, saying:

“They’re basically renouncing their citizenship and declaring that they’re based somewhere else, just to avoid paying their fair share,”

The IRS hope the move, being introduced largely because of the disparity between the UK and US Corporate Tax rates, will deter firms from moving abroad.

In the UK, the rate is soon to be set at 20 per cent, down from 21 per cent, to attract new investment. In the US the corporate rate is presently 35 per cent.

The news comes as Walgreen’s completed its full acquisition of Alliance Boots, with the US pharma investigating the viability of redomiciling its tax operations in the UK.

It also comes just three months after Pfizer’s AstraZeneca take over collapse and with Canadian pharmaceutical Abbvie preparing to purchase Shire, the Jersey-registered, Irish-headquartered biopharmaceutical company.

The motivation for both deals is widely thought to be over tax issues by many in the financial industry, partly at least.

A draft bill has already been drawn up for the plans. It sets out a framework which would impinge on foreign tax centres by increasing the 20 per cent threshold of shared-ownership with overseas-based firms.

Over a two-year period, any such deals would have to be structured to 50 per cent.

Strong Case for Investing in Staff Health
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Strong Case for Investing in Staff Health

There are clear business benefits to supporting employee health and wellbeing, says a new CBI and Medicash report. The UK’s leading business group has outlined how improving employee health can contribute to better business performance through lower absence, higher productivity and better employee engagement.

The direct costs of employee absence to the economy are estimated at over £14 billion per year – and the CBI’s latest absence survey found that the average total cost to business for each absent employee is £975. These figures would be higher still if productivity lost due to presenteeism—staff attending work despite being unwell—was included as well.

Neil Carberry, CBI Director for Employment and Skills, said: “Having healthy staff is an essential part of running a healthy business. Investing in the wellbeing of employees is not only the right thing to do, it has real business benefits.

“It’s time for businesses and government to work hand-in-hand to move from a reactive to proactive approach on health and wellbeing in the workplace. Encouraging investment that gets people back to work sooner, with less of a burden on the NHS, is in everybody’s interest.”

Sue Weir, CEO of Medicash, said: “Developing and implementing a targeted healthcare strategy can help business avoid costly absenteeism and ensure their workforce is a happy, healthy and committed one. That’s why more and more businesses looking to increase output and maximise business performance are putting into place robust health and wellbeing strategies.

“Offering a health and wellbeing package is an affordable and beneficial means of doing this and of attracting, motivating, rewarding and retaining staff.”

Towers Watson Launches Global Benefit Solution
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Towers Watson Launches Global Benefit Solution

Global professional services company Towers Watson has announced the launch of a simplified global benefit solution designed for the multinational marketplace. The offering, Global Access, allows multinational employers to deliver local-country, pre-packaged benefit programs that include life, accident, health and disability, with three fixed, benchmarked benefit levels.

Developed in conjunction with leading global insurance carriers and designed around Towers Watson’s Benefits Data Source survey data, Global Access is aimed at employee populations where customization is not required in benefit design, and is available in more than 30 countries around the world (except for North America).

“Multinational companies often struggle with delivering quality employee benefit programs due to insufficient local-country HR functions and little or no availability of local benchmarking data on employee benefit packages,” said Cecil Hemingway, leader of Towers Watson’s Global Health and Group Benefits practice.

Hemingway continued, “Global Access addresses these challenges head on. We’ve developed a first-of-its-kind, alternative benefit solution that provides employers with the simplicity of a fully benchmarked ‘off the shelf’ product that can be implemented within days, while also reducing costs and workload.”

For employee populations where no customization of benefit design is required, the offering replaces the need for employers to either negotiate or place policies directly with insurance carriers, or having to retain a local broker to do so. In addition, Global Access has very low minimum head count requirements for coverage, enhanced underwriting features that include higher guaranteed issue or free cover limits, and removal of pre-existing condition requirements for members who have been previously insured.

“Global Access improves transparency and control of local plans and vendors for multinational corporations at corporate and regional levels, and is fully compliant at a local-country level,” said Francis Coleman, director, International Consulting Group, Towers Watson. “It’s also easy to operate and offers centrally managed renewals.”

Pay Awards Remain Muted and Below Inflation Over 2014
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Pay Awards Remain Muted and Below Inflation Over 2014

Annual pay rises are delivering a median 2.5% increase according to analysis, by UK online HR resource XpertHR, of 215 pay settlements effective in the three months to the end of March 2014. This figure matches the 2.5% retail prices index (RPI) inflation figure for March 2014. Over 2013 as a whole pay settlements were worth a median 2%, while RPI stood at 2.7%.

RPI is the inflation measure most commonly used by employees and employers to gauge the value of any pay increase. Consumer prices index (RPI) inflation (the Government’s targeted measure) is used less often by employers – and rarely by employees as it excludes housing costs.

Over 2014 as a whole, pay settlements are forecast by XpertHR to be worth 2.5% for private-sector employees, while many public sector employees will receive an average 1% rise. Inflation over the year is expected by economists to average 2.8%. On the RPI measure, pay awards have been worth less than inflation since December 2009, and 2014 is set to lead to a record fifth year of wages falling in real terms.

Key findings for pay awards in the three months to the end of March 2014 include that the median pay award stands at 2.5%, the middle half of deals fall between 2.0% and 2.8% and less than one pay award in every 10 (8.2%) is a pay freeze.

XpertHR Pay and Benefits editor Sheila Attwood said: “We are yet to see a return to real terms wages growth. Pay settlement levels remain subdued – at just 1% on average in the public sector, and 2.5% in the private sector – and an early indication of pay awards concluding in April shows that this level of awards is likely to persist. Over 2014 as a whole pay settlements are likely to fall below RPI inflation.”

Microsoft and Disney among US “Best Corporate Citizens”
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Microsoft and Disney among US “Best Corporate Citizens”

Corporate Responsibility Magazine has announced its 15th annual 100 Best Corporate Citizens List, recognizing the standout performance of public companies across the United States.

The list, which was first published in 1999 by Business Ethics Magazine, documents 298 data points of disclosure and performance measures, harvested from publicly available information, such as websites and sustainability reports, in seven categories: environment, climate change, employee relations, human rights, governance, finance, and philanthropy.

There are 23 companies on the 2014 list that were not on the 2013 list, with 17 companies having been on the list every year since 2008.

Pharmaceutical company Bristol-Myers Squibb topped the list, despite receiving a “yellow card” caution from the magazine due to ongoing mass-tort litigation relating to allegations that toxic chemicals contaminated a company site in New Brunswick, New Jersey and caused personal injuries to residents of the neighbourhoods surrounding the facility.

Johnson & Johnson and Gap Inc. took second and third places respectively, with Microsoft Corporation, Intel Corp. and Walt Disney Co. also featuring in the top 10.

“We’re pleased to honour the 100 Best Corporate Citizens for meeting the highest commitment to the programming and transparency necessary to lead the business community in the area of responsible corporate practices,” said Bill Hatton, Editor-in-Chief of CR Magazine.

“CR Magazine’s 100 Best Corporate Citizens is the only ranking that doesn’t rely on self-reporting,” said Elliot Clark, CEO of CR Magazine. “Each year, we measure the most transparent companies who report on their responsible practices. We congratulate those honoured on this year’s 100 Best Corporate Citizens List for their commitment to corporate responsibility.”

FCA Takes Control of Consumer Credit
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FCA Takes Control of Consumer Credit

“When the FCA assumes responsibility for the consumer credit market on April 1st it will immediately find itself in conflict with the operating standards of many firms within the industry.

“The relatively relaxed regulatory environment under the OFT has led to a situation where companies haven’t been incentivised to develop the internal processes they will need in the tightly controlled financial services industry.

“For many of the affected firms, the problem is simply one of business practices. The short term, small-scale nature of these businesses has been reflected in the company culture meaning more long-term principles – for example, ensuring credit is affordable for the borrower through Know Your Customer (KYC) and Treating Customers Fairly (TCF) – have been pushed to one side.

“The positive here is that these principles can be restored relatively quickly by building an effective network of processes, which record the necessary data and make it available in the form of Management Information (MI). This MI can then easily be reviewed for the purposes of regulatory compliance, but equally as importantly it can be monitored by management for troubleshooting and strategic business improvements. Effective control of these processes can then be used to reinforce cultural change, one of the pillars of the FCA’s TCF.

“Regulation doesn’t have to be a burden. When managed properly the changes forced by the new regulation can be leveraged for competitive gain, a fact that will be highlighted by the industry shake-up that the FCA will no doubt trigger.”

Ethics Crisis as Managers Stop Caring
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Ethics Crisis as Managers Stop Caring

Title Here

Too many managers are robotically following rules rather than making decisions with their hearts and minds, according to new research published today by CMI (the Chartered Management Institute)
and MoralDNA.

It warns that workplace cultures dominated by rules, bureaucracy and targets mean that managers are switching off their sense of care for others.

The report, managers and their MoralDNA, follows City scandals over mis-sold debt, PPI and rate fixing, plus crises in the NHS and the police, damaging public trust and employee engagement alike. It finds that 74% of managers are at risk of overlooking the impact of their decisions at work on others – 28% more than among the general population.

The report shows that the general population can be divided almost equally into six different ethical character types – Philosophers, Judges, Angels, Teachers, Enforcers and Guardians – according to how far their approach to ethical matters is driven by their hearts, heads or compliance with rules. Analysis of managers’ morals revealed marked differences, with higher numbers of Enforcers, Judges and Philosophers (74%) and much smaller proportions of Angels, Teachers and Guardians (25%).

As a result, there are significantly more (28%) people in management roles who may lack empathy when making decisions and fail to consider the impact of their choices on the wellbeing and interests of customers, colleagues or shareholders. Conversely, there are less than half as many managers in the Angels and Teachers categories – which have a stronger ethic of care – than among the general population (14% of managers compared to 36% of the
general population).

The situation is exacerbated by an over-representation of Enforcers (22% of managers compared to 15% in the general population). This ethical character type, which tends to remind everyone else about their duty to obey regulations, can be particularly guilty of blindly following rules and can lose sight of the principles behind their actions.

The research also shows managers’ moral mindsets change significantly as soon as they are in a working environment. Compared to their personal lives, they become 4% more likely to blindly follow rules and 5% less likely to consider the wellbeing of others when making decisions.

Ann Francke, Chief Executive of CMI, said: “Too many employers fall into the trap of relying on ever-more complicated layers of rules and regulations to say what their people can and can’t do. The result is that people act like robots at work, using the letter of the law as an excuse not to engage their hearts and heads when making decisions. We need to stop blindly following rules and start caring about the impact our actions.

“To be successful, organisations have to meet the needs of their customers, employees and stakeholders. If the values and behaviours of those managing and leading organisations are out of kilter with those groups, they won’t be run in a way that properly serves customers and stakeholders or gets the best out of employees. In short, they’re destined
to fail.”

Professor Roger Steare, co-author of the report added: “MoralDNA has already persuaded the Financial Conduct Authority that a one dimensional, rules-based approach to corporate conduct has spectacularly failed in banking regulation. They have acknowledged that we all need to engage our heads and our hearts if we want to make better decisions and outcomes for our society. This report is a wake-up call to government and all regulators to understand that turning the UK into a totalitarian police-state will lead to more and not less wrong-doing. Right-wing politicians will agree with this small state philosophy. Left-wing politicians will agree with the emphasis that this places on our ethic
of care.”

The new research demonstrates significant links between ethical behaviour and different aspects of our humanity, including age, religion, politics and gender:

The older we get, the less robotic our decision-making becomes, both at home and at work – compliance drops 27% between people’s late twenties and retirement ageA belief in any religion makes a manager more likely to act ethically both at work and at homeCompliance is higher in managers with right-leaning political viewpoints than left leaningFemale managers score 5% higher in the ethic of care than their male counterparts.

Ann Francke continues: “These findings are another reminder of the benefits of having real diversity in management teams. Everyone has different ethics and the risk of ‘group think’ is reduced if organisations involve people with different experiences and perspectives in making decisions.”

CMI is supporting managers with tips for using their hearts as well as heads when making decisions at work.

CMI’s recommendations include:

1. Ask yourself the RIGHT questions to negotiate ethical quandaries:

  • – What are the relevant rules?
  • – Are we acting with Integrity?
    – Who is this good for?
    – Who could it harm?
    – Would we be happy if the truth was public – how open, honest and accountable are we being?

2. Step back. Create space for yourself to reflect on the ethical implications of decisions.

3. Stand up for what you believe in. Be authentic and be yourself. If you see something you do not agree with, speak up and challenge it.

4. Be professional. Use your professional body’s standards of practice as a reference point if you’re unsure, like CMI’s Code of Practice for Professional Managers – www.managers.org.uk/code

5. Engage and empower employees. Give staff more autonomy and devolve responsibility to them. Where employees can make decisions for themselves they are far more likely to start thinking for themselves about the impact of their actions on others.

CMI is offering managers a toolkit including practical checklists to help them improve ethical standards in their organisations. Plus, managers and non-managers can now test their ethics through the MoralDNA tool – and invite feedback from their Facebook friends about their moral mindsets using MoralDNA’s new 360-degree version. Find out more at www.managers.org.uk/ethical-toolkit.

Regulatory Change Slowing Growth
Corporate GovernanceRegulation

Regulatory Change Slowing Growth

 

New research from one of the world’s leading software and technology services companies has highlighted how regulatory change is second only to market volatility as an executive issue for financial services firms.

According to a survey, carried out by SunGard, with many new regulations taking effect during the course of 2014, in some cases it is even considered the number one strategic risk.

Senior executives are now concerned that regulatory change is distracting attention from core business activities and potentially hindering companies’ ability to grow.

Adapting to new regulations is also causing financial services firms to rethink their approach to compliance and restructure their organizations accordingly. Many, however, still do not feel ready for the changes taking effect
this year.

Key findings of the survey include:

Regulation is high on the executive agenda

• The pressure of dealing with change has expanded beyond compliance departments into the C-suite. One in two respondents warns that dealing with regulatory change has impacted shareholder returns and the ability to invest for the future.

• Almost half of respondents describe themselves as “highly stressed” by the current pressure of regulatory change, with little prospect of imminent improvement.

• The broad nature of regulatory change is driving a more cross-functional response within businesses. Best-in-class institutions are breaking through siloes, allowing for a more efficient response to the issue.

Despite ongoing efforts, readiness levels remain relatively low

• Only one in two companies say they are highly ready for the regulatory changes that they must confront throughout 2014 and 2015.

• Financial services firms plan to continue investing heavily in technology, people and processes over the next two years to cope with regulatory change.

Firms are starting to move beyond checking the box

• While recognizing the benefits of a culture change to compliance, forty percent of respondents are finding it challenging to move beyond a checking the box approach.

• Despite concerns that the degree of regulatory change is overblown, most firms responded in the survey that they accept the need for change and are moving along with their responses to new regulations.

Jeffrey Wallis, managing partner and president of SunGard Consulting Services, said: “The definition of what regulators are becoming concerned about is broadening to include areas such as operational risk, adding extra strain to the financial services industry.

“Our survey demonstrates that executives at the highest levels are struggling to marry ensuring regulatory readiness with maintaining a focus on day-to-day operations. In our work with firms on regulatory compliance, we see the most success when a business takes a combined approach to the twin challenges of growth and compliance.”

Sang Lee, managing partner, Aite Group, added: “Regulatory reform is putting the financial services industry under intense pressure, and the situation will not change in the near future.

“This pressure is being felt all the way up to the C-suite and the board. Regulatory uncertainty has forced some companies to put off key investments in new industries and geographies at a time when they are increasing their investment in compliance across departments.

“Regulations may be putting a strain on the industry, but we are starting to see some companies use them as an opportunity to reorganize themselves along more efficient lines. These businesses will be the future leaders in
the industry.”