THE MAGAZINE OF THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS The International Banker

Challenges and opportunities

CLIMATE, COVID, CYBER...

AUTUMN 2020 INTRODUCTIONS INTRODUCTIONS

AUTUMN 2020 Contents

The Master’s Message From the Immediate Past Master ‘Freeman, Liveryman, Master’ 04 Reflections on my year as Master 05

LOOKING OUTWARDS CHARITY AND EDUCATION

The Worshipful Company Banking on 2040 Alderman & Sheriff Professor The Brokerage What do companies need to do to Of International Bankers Michael Mainelli looks into his crystal ball 06 move towards a better future? 26

Banks: this time part of the solution Supporting School-Home-Support through A WCIB panel asks whether things are different the pandemic crisis Tom Newman, Immediate-Past EDITORIAL PANEL from the last crash 08 Chairman of the Charity And Education Committee, with two of many success stories 29 Katrina Arnold The climate challenge: Bankers will Max Asmelash From the Editor save the planet Alderman Sir Roger Gifford, the The art of the pitch Ali Miraj, new Chairman John Bennett MBE (Senior Warden) City’s cheerleader on green and sustainable finance 11 of the Charity And Education Committee, on an innovative Nigel Brigden We’ve had a challenging spring, video-based scheme to bring new Mark Cazaly (Deputy Editor) summer, and autumn. Now is Leapfrogging sustainability: ESG and charities to the company’s attention 31 Moorad Choudhry the winter of our discontent. We the fourth industrial revolution Angela Greenough have the pandemic, we have the The view from two emerging markets leaders 12 Lockdown legacy: responding to the Simon Hills recession, we have the borrowings, personal challenges faced by the young Tim Jones we have a deeply-divided America. Ground-breaking steps towards global Jean Stevenson reports on the role of mentoring in Robert Merrett (Master) And towering above these four climate reporting standards supporting young people whose lives are Ali Miraj challenges – and there are more, like Deloitte’s global head of international standards disrupted by the pandemic 32 Jason Van Praagh (Middle Warden) Brexit – we have climate change. issues a clarion call for coordinated reportings 14 Karina Robinson (Immediate Past Master) This issue of The International Banker Lessons from a top spymaster on securing Alexander Rottenburg is brimming with challenges, and the financial realmSir David Omand, former head John Ryan opportunities. The climate threat is of GCHQ, with four key steps to stemming the cyber LOOKING INWARDS Jean Stevenson the perfect example: an existential threat 16 John Thirlwell (Deputy Editor) threat to our grandchildren’s well- The Membership Committee’s virtual Lewis Worrow (Deputy Editor) being, but a huge opportunity for Central Bank Digital Currencies and summer Tim Skeet, Chairman of Membership Pinar Yetgin banking and finance to come to the end of dollar hegemony ‘CBDCs’: Committee 33 the fore in delivering solutions. they’re coming, and they’re coming soon, One of President-Elect Joe Biden’s ahead of them, at scale. Their says a leading academic 18 Communications, communications... THE WORSHIPFUL COMPANY first promises was a $US2 trillion optimism, though, shines through. Tim Jones, Chairman of the Communications Committee, OF INTERNATIONAL BANKERS clean energy and infrastructure Managing through a stress event: on how lockdown meant anything but 34 12 AUSTIN FRIARS, LONDON EC2N 2HE plan, and a commitment to rejoin It is of course hard to follow in why diversity of thought is important the Paris Agreement and a goal of the footsteps of my good friend Moorad Choudhry on a major cultural challenge New Freemen John Thirlwell welcomes two new CLERK: NICHOLAS WESTGARTH net-zero emissions by 2050. One Christopher Bond, an excellent editor for banks 19 Freemen to the Company 35 DIRECT LINE: 020 7374 0212 of our own, Past Master Sir Roger of this magazine for seven years. He is FAX: 020 7374 0207 Gifford, is leading the charge for missed. But I have great support from a Ken Clarke: a life at the heart of power 20 From breakfasts to podcasts to webcasts EMAIL: [email protected] the City here – see page 11. team of Deputy Editors. John Thirlwell in six weeks – Zoom to the rescue in the in particularly deserves my huge Steam Valve: Is our ultimate incompetence pandemic The company’s thriving events programme Be encouraged therefore when you thanks for encouragement, practical inevitable? Members express their views - curated over summer and autumn 2020 36 read about our world in the eyes support, and the proper command by Alex Rottenburg 22 of the next generation, the bright of English grammar which I lack. From the Clerk The Company demonstrates Ambassadors from The Brokerage – Back to the office resilience during the pandemic crisis 39 one of the Company’s chief charities George Littlejohn Opinions differ on this divisive issue 24 – on page 26. These young people have Editor – The International Banker Forthcoming events 40 both challenges and opportunities [email protected] Finding purpose in finance CBP004599 Simon Hills of UK Finance on the quest for purpose as we build back better 25

2 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 3 INTRODUCTIONS INTRODUCTIONS From the Master From the Immediate Past Master “FREEMAN, LIVERYMAN, MASTER” REFLECTIONS ON MY YEAR AS MASTER

I had a dream. A dream to be a great can remain connected, up-to-date on My son gave me a pink unicorn when forces. Engraved in my memory is a energy at its centre. Exploring how this International Banker. current topics of interest, committed I became Master of the Worshipful freezing cold winter weekend spent can be done is one of our missions, to the charitable aims that we set for Company of International Bankers with the 306 Hospital Support regiment as we did in an online conversation When I was much younger I was always the IBCT, and wanting to be Freemen and said he hoped I would sprinkle my somewhere up north. My partner between two luminaries of the fascinated by commerce, finance, of the WCIB. magic over the City. Neither he, nor Charles and I wondered at the sharp environmental sector, Sir Roger Gifford banking… But then I had an accident, anyone, realised that from March 2020 intake of breath when the organising and Laura Sandys in October. almost breaking my neck, with severe Liveryman is because we will be it would be difficult to sprinkle anything officer heard that we would happily residual problems. celebrating our 20th Anniversary in over a world struck by Covid-19 and sleep in the barracks accommodation And as a Company which is a 2021 as a Livery Company. Plus every its appalling health and economic rather than staying in a nearby hotel. microcosm of the City, I know individual So I decided then that life was too Liveryman is part of a much larger consequences. Shared showers. Plastic covers on the members will be helping deal with debt short, and I went back-packing around family of livery companies and the camp beds. Elaborate instructions on restructurings, with loans to small and the world, which turned out to be wider City of London family. Hence I Yet the pandemic has underlined the what to do with sheets that took three medium sized enterprises, and with one of the best things I have ever will be organising various inter-livery importance of community, of fairness readings and a degree in quantum figuring out how finance can best play undertaken in my life! My horizons networking events so that all our and of key workers, all issues which are physics. its supporting role in the downturn and totally opened up to the international Liverymen and Freemen can network central to the WCIB. the recovery. world in which we all live. From Hong amongst a truly unique family in the City Kong to New York, with the wonders of London. The first of these was a joint This was apparent in the way the For everything we’ve done on Diversity of the Great Barrier Reef, the Grand event with The Engineers in November Company pulled together to support & Inclusion, charity, cross-mentoring, Canyon, and so many more places in when we discussed the future and online events, produce our first Yet it was the most uplifting the Talk & Toast breakfasts, our between. financing for Space Technology. I look promotional video, and bolster our experience of my whole year. communication…there are so many forward to some WCIB and IBCT events charities. The Brokerage, the City social helpful members and I owe so much On returning to the UK I wrote down next year when we can celebrate our We also need to be very realistic given mobility charity which receives the main The regiment is made up of to so many. I fear the only solution is what I wanted to be – an International 20th anniversary – including, hopefully, the current pandemic situation. A world bulk of our funds, pivoted its offering full time doctors and nurses to thank you all for helping make my Banker. I still have that piece of paper. by meeting again in person! wide health crisis has also become a to teaching employability skills online year hugely special and to leave my pink That was my dream. So I got myself a severe economic crisis for so many. A to its students who are mainly from from hospitals and surgeries unicorn with our splendid Master and job and trained as a banker. Since then Master because it really is a great large number of people are having a disadvantaged BAME backgrounds. all over the country who Wardens. I have led acquisition and structured honour to be elected as your difficult time, whether through lack spend a number of their free finance transactions through the 20th Master. I want to thank all 19 of income, social isolation, child care For those who pitied me for having Karina Robinson, dotcom boom, provided credit via loans Past Masters for all their dedication duties, or elderly parent support. WCIB to spend the second half of my weekends training in order to Immediate Past Master and derivatives during the financial towards making this Company the in-person contact will be limited for term on zoom, I can only agree, but crisis, assessed the potential impact most successful of all the modern many months to come. on the positive side it drew us all be posted to places like Sierra on banks of cyber crime and global livery companies. I also want to closer together and emphasised our Leone or Afghanistan. pandemics, as well as visited over 30 give everyone else the skills and But I am also very optimistic. The innovative competence. countries to cover banking clients. A encouragement to take the path and banking industry can provide valuable wonderful career as an International aim to be the Master. To assist this, my support to clients. The WCIB can Open Door, Open City, my theme for Banker. first event in October was an evening provide wonderful friendship through the year, was about reflecting and It was impossible not to feel like an when I was joined by the chairmen online events. Plus the IBCT is providing attracting the wide variety of talent imposter giving those unsung heroes a Plus I have also discovered over the of our Standing Committees to allow a wide variety of grants and support to from all over the world that is key to fireside talk on leadership. The Covid-19 past two decades the City of London members to hear about how they can great causes. So let’s keep our Company a flourishing Company and City. We pandemic is shining a bright light on and The Worshipful Company of participate in those committees and get alive and well, with continued fellowship saw it in our sell-out Annual Banquet their contribution to our society. International Bankers! their ideas adopted by the Company. and charitable giving. at the Mansion House, the biggest and We will also have other similar events to most diverse of any Livery company; A cartoon I saw recently comes to So what does my story mean for all of support everyone of you towards being As Nelson Mandela once said: “Everyone we saw it in the couples, including an mind, where a Director is saying to his you? My motto for the year is “Freeman, a future Master. can rise above their circumstances and LBGT+ pair of CEOs interviewed in our Board, “Instead of risking anything new, Liveryman, Master”.Freeman indicates achieve success if they are dedicated to Talk & Toast breakfasts; we see it in the let’s play it safe…by continuing our slow the need to continue to encourage a and passionate about what they do.” initiatives taken forward by the current decline into obsolescence.” flourishing international membership of Master, our Black History event and WCIB. I will continue all the hard work So the motto “Freeman, To conclude, I hope you enjoy reading the upcoming mental health film, This As we celebrate our 20th anniversary, of the Past Masters and many others this edition of our magazine and I really is Me. I am very pleased to say that the towards growing the membership Liveryman, Master” defines look forward to fulfilling my dream to International Bankers are not among amongst international bankers and my own path as well as the be a great leader of this Company as an Being the Master of the WCIB is an that number. Rather, we stand at the financial service professionals. Hence I International Banker. immense honour, not least because it forefront of modern livery companies will be supporting various webinars in year ahead. gives you an intimate view of our many in how finance will help create a order that new and existing members Robert Merrett Company ties, including with the armed sustainable capitalist model with clean Photograph © Andy Sillett

4 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 5 LOOKING OUTWARDS LOOKING OUTWARDS

the test of almost a decade. ‘In Safe Hands? The Future Of Banking on 2040 Financial Services’* postulated four scenarios: We need to show that bankers are interested ALDERMAN & SHERIFF PROFESSOR MICHAEL MAINELLI’S SPEECH AT THE OCTOBER 2020 Many Hands suggests a societal structure defined by ethnic in building a better society as a first step WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS INSTALLATION EVENING and religious groups. Globalisation has failed and democracy is thought to be unwieldy. City states have replaced failed states towards restoring credibility in financial and constant mobility between these states is seen as normal. services. We need to keep our eyes on credit. Personally, I would suggest a project to create COMMUNITY-BASED Long Hand imagines a world where financial crises have melted down many western countries, budgets have been a manifesto for ‘Credit Creation In The overloaded and general consumption has been severely Modern Economy: A Discussion Of Leverage, MANY HANDS LONG HAND restricted. Economy, And Society’. Visible Hand is a world which still has recognisable political and economic systems but has adapted considerably to population and resource pressures within conventional SCENARIOS FOR 2040 systems. GEOGRAPHY MATTERS VIRTUAL CONNECTIONS A 1992 Vision Into Action research project found that if good Second Hand proposes that, while we fragment, we still value leaders didn’t have a crisis, they manufactured one. We don’t democracy, free markets remain a prevailing concept, and the need to manufacture crises, financial services delivers a surfeit nation state still dominates. A ‘muddle through’ scenario. of them.

SECOND HAND VISIBLE HAND Another approach is a classic four STEP look, social, technical, Society has many ways of solving resource allocation issues. economic, and political. How are banks addressing societies’ Markets are one choice. We have a moral obligation to big issues, climate change and equality? How are banks moving prove to society that the open market model is better than WASHINGTON CONSENSUS to the next demanding level of technology? On economics and the alternatives, such as command-and-control, taxation, politics, do we understand the deep political implications of state-control, or a monopoly. We should police our markets what looks like a technical and economic move, central bank ourselves for our own benefit; no LIBORs, PPIs, FX scandals, People are desperate for predictions. Doing a PhD in chaotic like to propose a large (think Stonehenge) mechanical clock, digital currencies (CBDCs)? RBS GRGs, etc. We knew about them but left them for the systems planning I concluded at one point that people need powered by seasonal temperature changes. It ticks once a regulator to discover, and then sat on them to boot. strategic planning just to feel better about the future. So year, bongs once a century, and the cuckoo comes out every CBDCs could cut to the core of banking soon (as Daniel ignoring many caveats about prediction, who is to say what millennium.” Broby suggests on page 18). When the Bank of England A telling question with an uncomfortable answer, how the future holds, but remember I told you so. comes and shows me a CBDC that they want me to use, and heavily have governments leant upon the banking industry Which has led to the multi-million dollar Long Now project prove it’s secure, why would I want to deposit it anywhere in the covid-19 crisis for economic recovery? The insurance Looking back 20 years, we spend time explaining to our building such a clock on Jeff Bezos’s Texas ranch. So let’s other than the Bank of England? CBDCs will raise intense, industry? children what it was like to make phone calls to arrange pretend we can peek just two decades hence. even unpleasant discussions about the nature of money and meetings, bring maps to find places, let alone what paper leverage. Fractional reserve banking is at risk as never before. To reconnect with our social purpose I believe our narrow tape, punch cards, or even ‘dialling’ a number meant. Think The world of 2040 is not about pantomime nor paranoia, So what should we keep our eyes on? focus should be on credit, but I would close by suggesting back to 2000 or so and camera phones, USB flash drives, nor is it the world of 2020 extrapolated; it is a world we that credit should be embedded in a wider discussion, a moral Toyota Prius, Blu-Ray, Facebook. 2005 or so, YouTube, can imagine, with care. For most prognostication over two Mark Twain’s contrarian, anti-portfolio saying (from dimension we should push more strongly - our obligation Google Maps; the iPhone is 2007. Then deeper tech such as decades William Gibson is right, ‘The future is already here – Pudd’nhead Wilson) goes: “Behold, the fool saith, ‘Put not to promote open markets. Once we have chosen a market- DNA analysis, stem cells, CRISPR, functional MRI, quantum it’s just not evenly distributed.’ In other words we can imagine all thine eggs in the one basket’ – which is but a manner of based approach, as we have in financial services, we must computers, or transparent aluminium. Six months ago too the future from what we see before us. Particularly if we avoid saying, ‘Scatter your money and your attention’, but the wise prove to society it is working. Jokes about government many people ooh-ed and aah-ed over video-conferencing. getting over-excited. For example, people laughed at Z/Yen man saith, ‘Put all your eggs in the one basket and – watch guarantees or comments about ‘privatising gains, socialising We’ve had video-conferencing since the 1990s. Jitsi, Skype, extrapolating from 2007 to 2010 data that Chinese centres that basket.’” So if you have to focus on just one thing in losses’ hurt enormously. Perfect markets don’t exist. We and Lifesize arrived in 2003, Cisco’s Telepresence and would join the top ranks of financial services. the basket, credit… remember Antonio Banderas in the film, know the failures, lack of competition, information symmetry, GoToWebinar in 2006, BigBlueButton in 2007, Bluejeans in The Laundromat, that ‘Credit is just the future tense of the agency problems, and externalities. We have a moral 2009, Zoom in 2011, and Teams only in 2017. You all have personal experiences of Roy Amara’s law – ‘We language of money.’ obligation to police ourselves and our markets. Not wait for tend to overestimate the effect of a technology in the short regulators to catch some of us out. But we’re bad at looking to the future, as our unpreparedness run and underestimate the effect in the long run.’ At the Discussions about inequality will continue to rise in volume for the obvious black elephant of a pandemic shows. Z/Yen’s beginning of July, PayPal, founded in 1998, surpassed Bank and importance and financial services industry should take And we can do it. Too much futurology is full of apocalyptic Long Finance initiative was inspired by a 1993 lecture by of America, the second biggest bank in the USA, in market responsibility for a proper discussion of the role of credit in disasters, when most of human history over the past five Professor Danny Hillis of MIT who said: cap, worth more than every American bank except JP Morgan a modern economy more seriously. Banking leaders need to centuries is a story of progress. As Macaulay said, “On what Chase. At the beginning of September 2020, the market interrogate black elephants, such as: principle is it that with nothing but improvement behind us, “ When I was a child, people used to talk about what would capitalisation of fintech payments firm Square, founded in we are to expect nothing but deterioration before us?” happen by the year 2000. Now, 30 years later, they still talk 2009, exceeded that of Goldman Sachs, the 151-year-old • Why are we in business? about what will happen by the year 2000. The future has investment bank. • Whom do we serve and why should they come to us? Let’s seize the day, and the discussions with society, not wait been shrinking by one year per year for my entire life. I think • How is our ‘mission’ fit for purpose? and hide. it is time for us to start a long-term project that gets people We could spend much time, too much time, on scenario • Does our strategy align with our purpose? thinking past the mental barrier of the Millennium. I would planning. Our Long Finance work from 2011 has stood • Do our executives and employees live our purpose? Michael Mainelli is an Honorary Freeman of the Company.

*https://www.zyen.com/publications/public-reports/in-safe-hands-the-future- 6 THE INTERNATIONAL BANKER / AUTUMN 2020 of-financial-services/ THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 7 LOOKING OUTWARDS LOOKING OUTWARDS

early 1980s with new entrants like Revolut doing well. Banks JS The bank I work with are getting requests all the time for have performed well. They have managed to handle the flows forbearance. We look at those very seriously. We’re accepting of cash that was needed to keep the economy going in phase a lot of them, but not for businesses which were going to 1 of the pandemic. They have done their bit. fail anyway. We’re in the SME market, too. People come and speak to their bankers. We have to treat each as an individual Jason Oakley I feel compelled to defend the banking industry, case. But if they’re going to fail, it’s better to sort it now and but I’m not falling into that. I’ve been in the industry 35 years. have that conversation. The banks lost their way, the pursuit of profit with quite bad behaviour. Look at the SME segment that I’m interested, MC You are saying, on a case by case basis, which is fantastic. backbone of the economy. At the financial crisis, the banks But the large banks suffer because they’re not able to deal Banks: this time, denuded skills and experience and relationships and replaced with customers on each case? It’s black box decision-making, it with centralised call centres that didn’t understand the isn’t it? Computer says no. We should treat every customer on part of the solution? relationship to real value. They relied on inertia. their particular circumstances, ideally. Covid-19 has been a heart attack for the economy, but it’s JO The alternative is to be customer-driven. You’ve got some BANKS WERE PLAINLY PART OF THE PROBLEM IN OUR been an opportunity to expose the fault line that existed 10, perfectly good businesses. Suddenly turnover stopped. The LAST MAJOR ECONOMIC CRISIS. THIS TIME ROUND, ARE 12 years ago. underlying model is robust and it’s working. We can help them THINGS DIFFERENT? JOHN THIRLWELL REPORTS ON A to re-establish their business. But we’re not charities. We have VIBRANT WCIB PANEL DISCUSSION IN SEPTEMBER shareholders and have to make a profit, not a government utility. The British Business Bank has been very helpful in some If we’re really going to address economic respects, but the unintended consequence has been the near growth, we’ve got to support the SME sector. destruction of non-bank lenders, who cannot compete with SMEs are 90% of employers and 60% of Bounce Back Loans. From a customer-driven perspective, PANELLISTS: Moorad Choudhry We are working through a current it’s actually put back the industry the best part of a decade, market-wide stress event, the coronavirus pandemic, which employment. because a lot of innovation has been curtailed. has resulted in severe economic contraction. The purpose of this panel is to discuss the financial sector, the differences DC I used to work for Michael Spencer, who was CEO of between this crisis or economic recession and the last one. ICAP. He would switch off until you started speaking about Banks entered this stress event with fairly healthy balance We have to get back to traditional relationship banking clients and customers. Profit is the output of a good product. sheets, thanks to the Basel 3 reforms of 2008-09. The key principles, who understand the clients and go to see them. Unfortunately, in the last 10 years something got a lot worse difference today is that banks aren’t part of the problem, but In the big banks, their interest is keeping their own job and with client contact, with many client-facing people refusing to potentially part of the solution. Jean. What are your opening never-ending cost-cutting exercises. Customers are nowhere pick up incoming calls unless they knew who the caller was. remarks? to be seen. We’ve got to get back to the customer being at Now we cannot get many white collar workers to do what the centre of everything. blue collar workers have been since March, which is to work. Jean Stevenson What is different from 2008 is that banks If you want to build a client relationship business, you need to have got good capital positions and reasonably good press, JS One of the difficulties is that a lot of new start-up banks see people to come and see them. but bad press continues - customer complaints, RBS, PPI etc around the SME market, are making sales/ getting market continue to rumble on. The opportunity we have now is to share to get a good valuation - a sale to somebody else. MC You have highlighted a paradox, Danny. The customer Danny Corrigan, CEO, Jean Stevenson, INED, Bank have a clear vision and mission with business and customers, There’s a lot of pressure to sell things to customers who is everything, but it’s making it real. I don’t think the future London Reporting House Leumi (UK) plc because this isn’t over by a long chalk When all the firing stops shouldn’t be buying them. There will be a tension. That’s is working from home. I’ve lost count from well-regarded we’ll have a lot of difficult situations to deal with. where the bigger banks have an advantage over the smaller institutions, Harvard Business Review, McKinsey, which exhort banks, who are looking for a sell-out. the need to transform to virtually full digital interaction. It MODERATOR: The question we’re asking our students in the WCIB essay seems to have become accepted. But if we’re going to re- competition is “if you were setting up a new bank, what would JO Can I come back? At the heart is about ethics and culture, engage the customer, it surely must retain some element of be your mission and vision for the future?”. I think there will because if you are really customer-driven, you are responding face to face or at least phone to phone. We need the kind of be something around treating customers fairly. But looking at to the client’s needs. You look to add value. The banks forgot environment to engage the customer? Jean? both the asset and the liability side, i.e. not just how much you that profit is a by-product of excellent service, and they’ve can lend, treating depositors fairly and also shareholders. inverted it the other way and said its products that get us JS Isn’t that what Metro Bank does? They’re trying to get value. If you take a clean sheet of paper, which I’ve been lucky back onto the high street, but they are seen as outliers, Danny Corrigan Someone in the market commented recently enough to do, I’ve got an obligation for my shareholders, but partly because no one else is following their business model. that ten years ago the banks and the financial markets broke I can only meet the obligation if I exceed the expectations of And I do wonder if we’ve got the expertise that we had, say, trust with society. As Jean just said, pension mis-selling, PPI, my customers. The true essence of banking is about serving 20 years ago. If you go into your local bank, you’ll be referred LIBOR fixing, the list is endless. Investment bankers had taken the client. to another branch that has an expert. And they know less over retail and commercial banks and it’s a good thing the than I do. awful management is gone. Now, coming from a low base MC What exactly should we be doing right now? Every bank, with the wrong people and wrong culture, banks are doing it whether it’s new or old, puts the customer first. It’s just a JO We’ve been working with the latest technology to design a right. They are in better shape, because they had lost so much platitude. What actions that banks should be doing as part of digital platform that is for SMEs. But what I haven’t forgotten Jason Oakley, CEO, Professor Moorad money, they had less to play with, for example in credit default the solution? The economy needs banks to make their P&L is the essence of banking is about interaction, people. Recognise Financial Services Choudhry, Kent University swaps, which caused colossal amount of losses. Culturally if it’s going to grow. P&L isn’t a dirty word. What should be Technology speeds things up, giving client choice to self- Limited Business School banks are more similar to those of the pre-Big Bang era of the looking through this crisis? manage, but the heart of it is a people interaction. The other

8 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 9 LOOKING OUTWARDS LOOKING OUTWARDS

thing is that the more complex the transaction, the more they JS I think you summarised well, but Jason was talking about need human contact. SMEs. A lot of those SMEs are still from another age. That’s The climate challenge: our age, your age. What about the 18s, the 20s? They’re in a Buy a new car. I just buy over the internet, or do I speak to the different position and l feel comfortable using apps but they dealer, have a look at the car, maybe give it a test drive? So the need guidance too. Maybe they’re more savvy, who knows? ‘Bankers will save the planet’ internet for commoditised services, home or travel insurance. Give me the best price. More complex buying behaviour, MC To take Mr. Oakley’s point, the more complex the ALDERMAN SIR ROGER GIFFORD IS A FERVENT ADVOCATE OF THE VITAL – AND PROFITABLE – ROLE disintermediation, doesn’t happen. An example one I know product, whether one is 18 or 88, that’s when the human THAT THE FINANCIAL COMMUNITY CAN PLAY IN ADDRESSING THE CLIMATE CHALLENGE well, personal lines insurance. Over 90% is disintermediated. interaction becomes the more complex. You can buy home Commercial insurance, 97% is still through the traditional insurance over the internet, not talk to human being. But if distribution channels. you want to buy a car or a mortgage or something expensive, Sir Roger Gifford is the City’s chief cheer-leader for green and not only the UK’s commitment to net-zero emissions by 2050 you might want to talk to someone. I am not convinced that a sustainable finance. As befits a man born in Fife, round the but also international climate commitments. relationship can be maintained entirely digitally. In the last ten coast from Adam Smith, father of the concept of ‘enlightened years, banks said they knew their customers the way Amazon self-interest,’ Sir Roger is adamant that tackling the climate Sir Roger also godfathered the creation of the Green One of the problems with the banks is if and Google did. It’s an algorithm. I don’t have a relationship challenge, while vital for the good of the planet and more Finance Education Charter, which brings together all the with Amazon. I don’t know anybody there. I’ve never dealt importantly the billions to come who will live on it, is also a major global financial professional bodies based in the UK I’m at a high level and managing a portfolio, with them face to face, phone to phone. prime source of sustainable profit for financial institutions. – with more than a million members between them - in a I’m being bonused to extracting value. If remarkable achievement of collaboration and cooperation. JO They seem to know my likes because they send me As Chairman of the Green Finance Institute, he has used his In the following pages, we view this brave new world from I can’t see an effective way of growing my recommendations. But it’s an algorithm. At some point I’ll clout as former Lord Mayor (and Master of the Company) the emerging markets perspective, which looks to London business, I can still be rewarded for reducing need to talk to someone for a more complex transaction. For to push matters green and sustainable to the top of City both for leadership and for professional services, as we work me relationships matter. Most of these guys are in the job for agendas. In mid-November, the City of London Corporation, together to tackle these profound challenges (and grasp the the cost base of my business to get a return. 12 or 18 months, and then they move and you start the whole in collaboration with his Institute, and supported by the World opportunities); and at important financial reporting issues But it undermines the long-term franchise cycle again. You need periods of continuity, focus on the Economic Forum, hosted a major summit focusing on the which are coming to a head as the year turns. of their business. customer and just execute relentlessly for their benefit. role of green finance in the recovery from COVID-19, and an economy-wide transition to net zero. It also explored how George Littlejohn MC I would suggest the restructuring should be about capital can be mobilised at the pace and scale needed to meet customer engagement, as opposed to ‘technology is 100% of the solution’. I sound like a dinosaur, but I’m not convinced DC I couldn’t agree more re the digitisation process. The that technology is all of the solution. As Jean was saying, treat actual sale is operational and it works very well. But decision- each one on a case by case basis, the capacity to respond in making needs the human touch. The banks need to keep the quick time to customers. I’m not entirely convinced this is FINANCING THE GREEN REVOLUTION same amount of people, but need to change the types. The being addressed. quality of people now in banks is much lower than it was 20 With economic activity across the technologies involves greater risk than important asset, planet Earth - without years ago. Then it attracted all the bright brains. Now they go We could have touched on so many topics and there’s so world slowed down significantly for a its incumbent counterparts but in proper care its yields could start to fintech, hedge funds, whatever. many interlinked elements here. It’s a pity we couldn’t have an large proportion of this year, we might energy investment, there is a tipping falling with devastating consequences. audience, but that is the perhaps a sign of things to come. My have expected a parallel slowing in the point where ‘dirty’ energy becomes a Seen through this prism it’s obvious Turning to the cloud, it is now it is possible to manage the thanks to all the panellists. Thanks again Jason, Jean, Danny. rate of climate change. Sadly this has greater risk than the technologies of that green finance is of paramount sales and delivery process at every stage of the transaction. Good to get back. not been borne out by the evidence, tomorrow. We are nearing this tipping importance in ensuring we can continue There are so many reports already sitting there which you or and global temperatures continue point as oil investment becomes harder to enjoy the fruits of our planet, your clients might want. It turns data into true information For more from this panel, see “Back to the office” on page 24. to rise unabated. So as the country to justify and new technologies and provided by both Mother Nature and and it can be as real time as you need. You need proper and the world prepares to ‘build back markets are growing more established. mankind. product managers, relationship managers, salespeople. In the Moorad Choudhry is a Freeman. better’ green investment is absolutely City, they don’t exist in numbers large enough. Jean Stevenson is an Honorary Court Assistant. key to the economic recovery. Laura Emerging markets too are providing an Mark Cazaly John Thirlwell is a Court Assistant. Sandys CBE and Sir Roger Gifford interesting area for green investment MC So in summary, let’s automate and digitise processes, but offered us their thoughts in a webcast and while financing these projects can remember the customer and relationship maintenance. When to members in September on how to be tough, working with development a bank claims it can provide every single product through your ensure green investment is at the heart banks and global institutions can help mobile app, that’s not really accurate. You mentioned certain of the global economy as we emerge to give projects in developing nations products. Take trade finance. It’s a very large part of global from the Coronavirus pandemic. the credibility they need to flourish. commerce. Not every bank provides that product but it does This is doubly important as not only do not lend itself to digitisation. Someone will have to show me While the picture going into this winter emerging markets need clean energy trade finance being done on screen. looks fairly bleak, there is lots to be but it is important for democracy and positive about - huge strides in wind and governance in the face of a looming The panel seems to be reasonably in agreement, but this solar in China sees the world’s second energy crisis. is not what I’m reading in the media. This is not where the largest economy finding ways to play its zeitgeist seems to be heading. What banks should be doing part in reducing global emissions; and One of the clearest ways of looking today is engaging with the customer directly. Would anybody not just at home, China is looking for big at clean tech through a finance lens add or say anything new? investments abroad too. is to see ourselves as global asset We all know that investment in newer managers - managing our most Alderman Sir Roger Gifford

10 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 11 LOOKING OUTWARDS LOOKING OUTWARDS

In summary, a growing number of studies demonstrate Kairat Kelimbetov is Chairman of the Agency of Strategic Leapfrogging sustainability: ESG that high ESG-rated companies are associated with positive Planning and Reform of the Republic of Kazakhstan and characteristics that all stakeholders look for in any company Governor of the Astana International Financial Centre (AIFC). or while making investment decisions. Together with the Previously, he was the Governor of the National Bank of and the fourth industrial revolution pronounced interest from investors who are seeking to Kazakhstan, and Deputy Prime Minister of Kazakhstan. make a positive impact through their investments, ESG, SRI H.E. KAIRAT KELIMBETOV AND PROFESSOR ALEXANDER VAN DE PUTTE and impact investing all have the likelihood of being the new Alexander Van de Putte is Chairman of Corporate Governance ON WHY DOING GOOD IS MAKING WAVES norm in making investment decisions and in voting practices. & Stewardship and Chief Strategy Officer at the AIFC, Additionally, with an increasing adoption rate of ESG, Professor of Strategy and Strategic Foresight at IE Business SRI and impact investing among investors and leading School in Madrid and Managing Director of the Sustainable The recent trends and developments in ESG (environmental, World Index over a 10-year period demonstrated that high global asset managers, sustainability will soon become the Foresight Institute. social and governance), SRI (socially-responsible investment) ESG-rated companies had a lower frequency of severe central topic among institutional investors, policymakers, and impact investing demonstrate that sustainability is incidents such as drawdowns more than 95% or bankruptcy. regulators, government agencies, and corporations alike. ‘Leapfrogging sustainability – an emerging markets increasingly becoming mainstream. While investors are • Lower volatility: Because of better risk controls associated Importantly, investors can now do the right thing – socially perspective’ by HE Kelimbetov, Professor van de Putte, being virtuous by increasingly seeking ESG, SRI and impact with high ESG-rated companies, they have fewer severe responsible and sustainable investing – without settling for Professor Steve Evans of Cambridge University, and Shynar investments, they are also making money by doing what they incidents of fraud, corruption, embezzlement and sub-optimal returns. Nematova of EBRD will be published in December 2020. believe to be the right thing. litigation cases.

According to a growing number of studies, ESG, SRI and In addition to Amundi, other global asset managers, including impact investing are providing better returns compared to Blackrock, BNP Paribas, Vanguard, and Fidelity Investments, THE FOURTH INDUSTRIAL REVOLUTION HAS ARRIVED traditional investments. ‘Traditional investments’ indicates have launched ESG funds. According to data provided by investments that do not consider pro-sustainable factors Morningstar, mutual funds based on ESG criteria surpassed The First Industrial Revolution which Germany, France, Italy, Japan and the China consumed about 50% of the including, but not limited to, environmental, social, the $1 trillion mark in 2018 with assets under management started in Britain in the 18th and 19th USA followed. This is often referred world’s commodities, compared to governance, ethical, and norms, alongside financial factors. rising by 60% since 2012 from $655 billion to $1.05 trillion. centuries was driven by the invention to as the era of mass production and 10% during the last 15 years of 20th of the steam engine and the vertical integration. century. Europe’s largest asset manager by assets under management, development of the iron and textile Amundi, yet again received the top rating (A+) in 2019 industries. Europe gradually overtook The Third Industrial Revolution, also In 2007, Alexander Van de Putte and for its responsible investment approach, has championed January 2019 witnessed another milestone for China and India as the engines of referred to as the information age, Ged Davis at the World Economic responsible investing by including it at the core of its identity. global growth. was driven by the mass diffusion of Forum oversaw the development of Between 2010 and 2017, Amundi conducted a study that sustainable investment when S&P Dow Jones technologies, such as the personal the medium-term scenarios on the considered investment universes covered by MSCI indices Indices launched the S&P 500 ESG Index. The Second Industrial Revolution, computer and the Internet. This is emergence of the digital eco-system, (MSCI North America, MSCI EMU, MSCI Europe ex EMU, which started around 1870, in turn led to the globalisation of or the convergence of the physical MSCI Japan and MSCI World) and applied three different witnessed the emergence of steel, oil companies and the rise of emerging and digital worlds, and the pre-cursor strategies – active management, passive management and and electricity, the development of markets, especially China, which of the fourth industrial revolution factor investing – and based its analysis on ESG criteria. In the first half of 2019 alone, S&P Dow Jones Indices modern forms of transportation of became the world’s manufacturing (4IR) described by Klaus Schwab launched six ESG indices with global coverage.1 Similar to goods (e.g., shipping and rail), and hub, and the emergence of the (2016) in his book The Fourth The analysis found that while ESG investments produced the S&P 500 Index, in the S&P 500 ESG Index companies the transition from coal to oil. Rapid commodities super cycle. During Industrial Revolution. negative excess return compared to non-ESG investments are ranked by their ESG scores and excluded if they do not industrial development in Britain, the first 15 years of this century, during the period from 2010 to 2013, 2014 was a turning meet the criteria as defined in the index. Companies can be In it, the founder of the World point where ESG investments outperformed non-ESG excluded from the S&P 500 ESG index for reasons including: Economic Forum argued that we 4th Industrial investments. The results of the analysis showed that, Revolution stand on the brink of a technological (Emerging) between 2014 and 2017, being a ‘responsible investor’ • failure to meet the required ESG scores; 3rd Industrial revolution that will fundamentally Digital age driven by and managing portfolios based on the ESG criteria would • disqualifying United Nations Global Compact scores; or Revolution alter the way we live, work, and relate robotics, AI, nanotech, (since 1969) have resulted in annualised excess return of 3.3% in North • business activities listed in the exclusion list such as 2nd Industrial biotech, IoT, additive to one other. He defines the 4IR Information age driven Revolution manufacturing, blockchain America and a remarkable 6.6% in Europe. While Amundi tobacco production/sales or controversial weapons by the personal as: “… a range of new technologies (Since 1870) and autonomous vehicles promotes ESG-induced portfolios, it cautions that while (e.g., cluster weapons, landmines, nuclear weapons), 1st Industrial computer and the that are fusing the physical, digital Emergence of steel, oil Revolution (18/19th Internet applying these factors to avoid reducing the investment or an ownership stake of 25% or more in another and electricity. and biological worlds, impacting all centuries) universe beyond the point that could negatively impact company involved in these activities. Rail and modern disciplines, economies and industries, Steam engine. shipping. diversification and performance. Iron and textile industries. Era of mass production. and even challenging ideas about In April 2019, several notable companies were removed from what it means to be human.” In another study, a research team at MSCI looked at the the S&P 500 ESG Index, including Facebook, Wells Fargo, Europe gradually Rapid industrial Rise of emerging Shift in economic gravity overtakes China and development in Britain, markets, especially continues attributes of ESG investments that led to positive financial Oracle, and IBM – Facebook being the largest with a weight India as the engines of Germany, France, Italy, China Focus on sustainability effects and found that companies with robust ESG practices of 2.5% in the index a day before it was excluded (Steadman, global growth Japan and the US Commodities Super and dematerialisation Cycle Source: World Economic Forum demonstrated the following characteristics: 2019). As a result of the recent privacy protection concerns, West-west trade Globalisation Digital Trade & Sustainable Foresight Institute such as a lack of transparency on collecting and sharing • Higher profitability: When compared with low ESG-rated private user information, Facebook did not meet the companies, higher ESG-rated companies had a competitive requirement to remain in the S&P 500 ESG Index. Despite edge and generated better returns that usually resulted in Facebook scoring high on the environment score, its higher profitability and dividend payments. aggregate was brought down by the social and governance 1 The six indices are S&P 500 ESG Index, S&P Global 1200 ESG Index, S&P Europe 350 ESG Index, S&P Japan 500 ESG Index, S&P/ASX 200 ESG Index, and S&P • Lower risk: An observation of companies within the MSCI factors which are weighted higher for tech companies. Developed Ex-North America & Korea LargeMidCap ESG Index.

12 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 13 LOOKING OUTWARDS LOOKING OUTWARDS

value can be of the same quality as a coherent and comprehensive an effective model of private sector, information on profit, backed by the corporate reporting system. They independent and high-quality standard- right rigour of governance and controls make a joint commitment to work setting, overseen by public authorities. to enhance the quality and verifiability together and collaborate with the Connectivity to financial reporting, of reported information. IFRSF and other key stakeholders to under the oversight of the IFRSF, is drive towards this goal. critical to achieve the much-needed alignment between business model • A further accelerator is the work of and sustainability disclosures, and In recent months, we the IOSCO Task Force on Sustainable assertions that underpin information in have seen significant Finance. The chair of the task the financial statements. force, Erik Thedéen, has publicly and unprecedented said that he expects these parallel Climate change is an urgent issue developments that can lead initiatives to come together, to lead that affects us all. We have a unique to the foundation of a structure that opportunity to create a global to a comprehensive corporate can deliver a more coherent and standards solution for sustainability reporting system that is comprehensive corporate reporting information. The support of companies Ground-breaking steps towards system. He has set out a vision for a and investors on this journey is essential needed by capital markets system that meets the information for us to move ahead in the same and society more widely. needs of capital markets, operates direction with sufficient speed. global climate reporting standards with a governance model that serves the public interest and can potentially Veronica Poole is a partner at Deloitte, DELOITTE’S GLOBAL HEAD OF INTERNATIONAL STANDARDS ISSUES be integrated with existing regulatory global IFRS leader and the head of A CLARION CALL FOR COORDINATED REPORTING I HIGHLIGHT THE THREE MOST frameworks across IOSCO member corporate reporting. SIGNIFICANT MOVES BELOW: jurisdictions. The IFRSF Consultation is open until 31 These are very exciting developments. December 2020: tinyurl.com/y222nlly. • In September, the Trustees of the The IFRSF is extremely well positioned IFRS Foundation (IFRSF) made a to take on the global sustainability Join the debate on WCIB’s “Changes in climate policies, new narrative in annual reports and in how its purpose translates into positive ground-breaking move. They issued standard-setting role, having LinkedIn page. technologies and growing physical risks the assumptions and forecasts used outcomes in relation to the Sustainable a public consultation that sets out demonstrated a successful track record will prompt reassessments of the values in the financial statements. Financial Development Goals (SDGs). possible ways the organisation with financial reporting by operating of virtually every financial asset,” says institutions are increasingly required might build on its experience in Mark Carney, now UN Special Envoy to measure and disclose carbon Information on these topics is therefore international standard-setting, its for Climate Action and Finance. In exposure in their portfolios – including also of increasing importance. However, well-established due processes and Veronica Poole 2020, he reminded us of the risks and assets and lending. the problem is that there is now a large its governance structure to develop opportunities of climate change for proliferation of voluntary standards, global sustainability standards. This companies and financial institutions. As a result, there has been a codes, tools and methodologies, would include the introduction of a “Achieving net zero will require a whole groundswell of calls from capital developed with genuine intention to new Sustainability Standards Board economy transition – every company, market participants, regulators provide solutions as to how business (SSB), alongside the existing financial every bank, every insurer and investor and other stakeholders in support works in the context of people and reporting board, IASB. will have to adjust their business of transparent measurement and planet. But the number of competing models. This could turn an existential disclosure of information about offerings is hindering comparability • In order to meet the urgent needs risk into the greatest commercial sustainability performance. between reporting organisations and of climate change and the SDGs, opportunity of our time.” leading to complexity in reporting and we do not have time to start the Investors and other stakeholders greenwashing in the system. technical content from scratch. It is Now, as we see exponential increases want to understand how the risks good therefore to see that the IFRSF in sustainable investing, sustainability and opportunities faced by business The only way of resolving this is to Trustees have stated the importance disclosure has become increasingly translate into long-term value creation consolidate, building on the best of of building on the existing work of critical, both for investors, as they and profitability and how, in turn, what we already have, and coalesce the leading international sustainability seek to make robust economic these relate to shorter-term financial around one set of global sustainability standards and frameworks – CDP decisions, and regulators, as they look performance. standards as we did with financial (Carbon Disclosure Project), CDSB at the overall stability and efficiency of reporting. Moving to standards allows (the Carbon Disclosure Standards financial markets. The duty of directors includes consensus to be achieved among Board), GRI (the Global Reporting considering stakeholders and the market participants (for example, Initiative), IIRC (the International Investors are clear in their expectations environment while promoting the companies, investors, policy makers, Integrated Reporting Council) that climate-related information, long-term success of the company. regulators and civil society). It will also and SASB (the Sustainability including on governance, strategy, Furthermore, success of a business ensure that information on people, Accounting Standards Board). These risks and performance, should be is inextricably linked to its impacts on planet and prosperity that is relevant to organisations have issued a Statement included by companies both in the people, planet and the economy, and understanding how enterprises create of Intent that sets out a vision for

14 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 15 LOOKING OUTWARDS LOOKING OUTWARDS The cyber challenge: Four lessons in securing the financial realm Shining a light SIR DAVID OMAND GCB, FORMER GCHQ HEAD, ON LESSONS WE CAN LEARN FROM INTELLIGENCE IN FIGHTING THE CYBER WAR on corruption

Sir David Omand GCB recalls the legend that grew up around answer: ‘people financial institutions wouldn’t normally touch JOANNA KIDD OF RIDGEWAY INFORMATION CONSIDERS the great American blues player Robert Johnson. “It is with a bargepole’ – college dropouts, bearded young men in THE VALUE OF OPEN SOURCE INFORMATION IN TACKLING said that as a young man he had gone to the crossroads at tee-shirts, and the rest. Normal practice today, then, on the THE BLIGHT OF CORRUPTION midnight and sold his soul to the devil in return for playing the outer limits. blues as never before. And one night, of course as his song says, the devil came calling.” The threats have got worse, and at the same “We should remember,” says Sir David, “that we rushed to Concern continues to grow about the provides much deeper and broader Joanna Kidd sell our souls to the inherently insecure internet in return for time the claims of some ‘experts’ in cyber flow of funds from corrupt sources. data than before. The revolution has the easy advantages it offered: saving in staff costs; direct security are often inflated. There are well regarded estimates that led to a dramatic reduction in the cost interaction with customers; targeted marketing; profits from as much as a third of all money in the of obtaining, processing, storing and global trading. Now the devil has come calling for us in the global financial system is tainted by transmitting digital information in all shape of cyber attacks.” corruption. Even if such estimates are forms. It has facilitated the internet, the The more they praise their own expertise, quite often the wide of the mark, all measures possible World Wide Web and the concomitant After GCHQ, he became Permanent Secretary at the less sound that knowledge turn out to be. Today, boardroom should of course be taken to counter vast increase in the volume and variety Home Office, then Britain’s first Security and Intelligence awareness of the cyber threat is vital. Sir David, as well as his corruption as required by the global of information and the speed with Coordinator. He was the first man to voice the cyber concern Whitehall experience, also has serious FTSE100 boardroom system of regulation and sanctions which such information changes. Much at a major City event, the Chartered Institute for Securities clout. He was until recently senior independent director at governing financial institutions. Open of this digital information is open & Investment’s annual conference in 2013, alongside John Babcock International. He is also a Visiting Professor of War source information is widely used source, albeit in many variants: multiple Griffith-Jones, newly-anointed first chairman of the Financial Studies at King’s College, London. In a new book1, he outlines in the due diligence processes for languages; multiple formats, audio, Conduct Authority (FCA), when he warned in graphic detail a model of analytical thinking that could be of immense guarding against corruption and money visual and text; and multiple data sizes. that the cyber devil had indeed come calling. “In the UK,” he use to anyone facing complex issues, cyber or otherwise. laundering and many sophisticated said, “we are highly vulnerable to such attacks. It has taken only “My experience is that it really helps to have a systematic automated information retrieval In some fields of security analysis, open source intelligence may exist a few years for the internet to become irreversibly enmeshed way of unpacking the process of arriving at judgements and systems have been developed in comprehensive, thorough and about corrupt money that remains in our financial life and for the criminals to latch on.” establishing the appropriate level of confidence in them. The support of this. painstaking collection and evaluation underexploited. The problem is how model I have developed – let me call it by an acronym that of open source information has shown to find it. Due diligence processes in Jane Platt CBE, then Chief Executive of NS&I and Master of recalls what analysts do as they look at the world, the SEES that with the explosion of individual financial institutions have to operate the WCIB, as well as being a non-executive director of the model – leads you through the four types of information that publication of data a considerable at speed and scale, even the so-called FCA, asked the most telling question of the day: what sort of can form an intelligence product, derived from different levels However, overall effective amount of sensitive material, which ‘enhanced due diligence’ required people should we be hiring to guard against this threat? The of analysis”: exploitation of open sources previously would have been likely in high risk cases. This militates to have been kept out of the public against the type of lengthy, deep and • Situational awareness of what is happening and what we may still be underused, as a domain by institutional gatekeepers, painstaking research needed to get the face now. tool for countering corruption is now available openly. comprehensive story. While automated • Explanation of why we are seeing what we do and tools help, they still cannot replace the motivations of those involved. and assessing how clean Action against corruption by necessity skills of the trained analyst working in • Estimates and forecasts of how events may unfold under money is. requires knowledge of where and how depth with subject matter expertise. different assumptions. the money and assets underpinning • Strategic notice of future issues that may come to challenge it are located and moved around Knowledge of the appropriate us in the longer term. the world. Such knowledge of languages, culture and technical The use of open source information – course remains closely guarded and domains are also critical. Against For those facing risk – cyber and all the rest – in their daily information that may be difficult to find deliberately kept out of the public that background, it may be worth work or at board level, there is a powerful logic behind this but that is nevertheless in the public domain. exploring further, notwithstanding SEES way of thinking. domain – is not new. Newspapers, for the many technical, logistical and data example, have been widely scoured for Effective sharing of information across management challenges, how the On the opposite page, Joanna Kidd, also at King’s College, relevant data since the 18th century. public and private sector domains is global anti-corruption armoury might London, assesses the value of more traditional information However, the on-going information one avenue for attacking the problem be strengthened by more effective sources in the struggle to manage risk. revolution, the development of which has gained much recent traction. integration of open source intelligence computers and digital communications But given the sensitivity of information research and analysis with compliance from the 1950s onwards, means available openly in other areas of and due diligence operations in the 1How spies think, Penguin Viking, October 2020 that open source information now security concern, it is likely that useful wider commercial and financial sphere. Sir David Omand

16 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 17 LOOKING OUTWARDS LOOKING OUTWARDS Central Bank Digital Currencies Managing through a stress event: and the end of dollar hegemony why diversity of thought is important DANIEL BROBY, DIRECTOR OF THE CENTRE FOR FINANCIAL REGULATION AND INNOVATION AT MOORAD CHOUDHRY, WCIB FREEMAN, ON A MAJOR CULTURAL CHALLENGE FOR BANKS, STRATHCLYDE UNIVERSITY, AND LONG-TIME FUND MANAGER, REFLECTS ON THE TREND TO CBDCS AND WHY BOARDS MUST ENSURE IT IS TACKLED HEAD ON

printing money. In response, central shadow currency issuance by private “Diversity” amongst company It doesn’t necessarily produce tangible conduct issues, very low or negative banks continued their state authorised cryptocurrencies, and supporting employees has been an oft-quoted benefits if a company’s executive interest rates and competition role by becoming clearing houses for competition in the online world. mantra for some years now, and the committee or board contains a diverse pressures: these are all significant cheques drawn against these deposits. world of banking is no exception. In mix of people, but all of them think in current challenges for banks. Digital assets present a similar existential The governments of Japan and China 2020 it is a sign of genuine positive more or less the same way. If they all challenge to central banks. The creation are in a race to launch the first CBDC. development in society to be able accept what the latest management To meet these challenges demands a of a digital asset is also akin to printing Digital yen is in part a response by to say that no right thinking person consultant thought-speak is, if they diverse set of skills, and experiences, money. Crypto assets are virtual the Japanese government to what is would disagree with the idea that are content with surface platitudes, amongst senior management. It also Daniel Broby and free of national boundary. They happening in China. There, when they advancement in one’s career and if they accept everything at face demands an ability to think for oneself, therefore threaten governments ability banned Bitcoin, they started to explore prospects should be down solely value with only token challenge and because the path to ruin is littered The hegemony of the dollar is under to control money supply. the possibility of a digital yuan. They to merit. One’s nationality, gender, without delving into the substance, if with those companies whose senior threat due to its failure to embrace now have a lead amongst the central skin colour, physical ability, sexual one is concerned with management executives didn’t question and didn’t the digital age. If it is usurped as the In response to this treat to their banks in the development of their own orientation or religious beliefs should effectiveness, then physical diversity is challenge. currency of international settlement, monopoly, Central banks are exploring digital offering. They have developed have precisely no bearing on the hiring irrelevant. What is needed is diversity there would be huge geopolitical introducing CBDCs. By creating a the digital yuan to a stage where it is and promotion decision. of thought. The key point here is that Group think has been identified as one implications. Over 60 % of global debt platform, a Central Bank can provide now being tested at a local level with visual diversity is not necessarily any of the factors behind the 2008 bank and foreign exchange reserves are in a resilient and secure digital currency 50,000 citizens. It is a sign of true advancement in guarantee of this. crash, and quite rightly something to dollars. That said, 120 countries have that interfaces with its Real Time Gross humanity that this is now mainstream avoid. China as their biggest trade partner and Settlement system. Payment entities Central banks in the UK, Europe and thought. Workforces today not only they question settling in dollars. The can then interface and build services the US are still largely at the discussion exhibit more variety than in the past, Diversity of thought is something introduction of a digital yuan may well around the authorised technology. A stage. The Bank of England, for many banks actively encourage such Diversity of thought is subtly distinct however. It looks for the prove to be the catalyst that changes CBDC enables programmability and example, says that it is conducting diversity and like to be seen to be vital if banks, irrespective substance beneath the platitudes and the status quo. micropayments by Payment Interface ongoing investigations into what a promoting it. For example, the number a willingness to challenge corporate- Providers but with the added benefit of central bank digital currency means, of banks that have changed the of their business model, are speak constructively. Creating fiat sovereign currency is supervision and oversight. as has ECB and the Federal Reserve. background of their corporate logo to a to operate effectively in the a government-delegated sovereign The US dollar has been the de facto rainbow, to signify inclusivity. Such an approach will only be privilege. It is fundamental to our reserve currency of the world since post-crash world, and to forthcoming if the company fosters an established economic regulation CBDCs should not the 1944 Bretton Woods Conference. While the job is not complete – some remain viable entities once environment that actively encourages and wellbeing and as such requires That established a global financial countries, industries and companies the current pandemic stress it. All companies talk about possessing supervision and central control. The be confused with framework based on gold reserves. are more ahead of the game than an open and engaging culture but often rise of cryptocurrencies has shown When it collapsed in 1971, central others – it is also time to address the event has passed. this is a platitude, not a reality. For that private digital offerings can be cryptocurrencies. They are banks had free reign to print money next challenge for effectiveness and diversity of thought to thrive, there successful and this has spooked the fundamentally different. at will. The possibility of widespread leadership in banking. This is diversity must be an open culture, without world’s central banks. Such assets, use of decentralised cryptocurrencies of thought and the related diversity of cliques, inner circles or favourites. This if they can be called such, are not threatens this central bank authority skill sets, and diversity of approach to Regulatory compliance, lockdown- is a less common trait to observe in easily supervised. Central banks have once again. Such an event could problem solving. policy induced recession, customer corporate environments. And a truism no control over their issuance or The latter are privately backed, potentially undermine transactions often quoted is that culture comes jurisdiction. As a result, regardless decentralised and not backed by any using the dollar as the default. from the top. of trade imbalances, there is much government. Money has to be a store discussion on the possibility of Central of value, a medium of exchange and A digital yuan could well spell the end Today, companies understand the Bank Digital Currencies (CBDCs) in a unit of account. Current iterations of dollar hegemony. Its time central benefits of equal opportunity. The China and elsewhere. of cryptocurrencies are too volatile bankers in the US and Europe took note principle of diversity is an unarguable and are not recognised by law. To be and moved from talking about CBDCs one. Diversity of thought, however, Central banks were founded to control acceptable, a CBDC would have to be to delivering them. is less common to observe, and is the issue of paper money. Banking readily convertible to physical cash or connected to, but distinct from, deposits, however, soon overtook state deposits as these are less volatile and Broby, D. and Baker, S., 2018. Central diversity in gender, colour, religion, race issued bank notes as the main form legal tender. Banks and Cryptocurrencies. Centre or sexuality. It is a cultural challenge of circulation money. This challenged for Financial Regulation and Innovation- for banks right now, and ensuring this the central banks’ monopolies because There are many advantages of having White Paper: https://tinyurl.com/ challenge is met should be one of every a deposit is very similar in effect to a CBDC. These include avoiding a y22nc7xa board’s key tasks.

18 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 19 LOOKING OUTWARDS LOOKING OUTWARDS

banking industry were completely reckless and mad and this With fiscal policy, my priorities lay in debt reduction and Ken Clarke: a lifetime was coupled with the fashion of ever-increasing deregulation. affordability. I implemented this in the classical way, where I No two recessions or crashes ever repeat themselves, but accepted a budget deficit if the economy was in a downturn most of the Western economies have never really recovered and and would aim for a surplus if the economy was trending at the heart of power from the crash of 2008 and nobody has put in sufficient upwards, not to abolish the economic cycle but to take the protections to stop this happening again. People, such as top off the boom and the bottom off the bust with the aim of ALEEM WALLANI, WCIB FREEMAN, MEETS STILL-EBULLIENT THE RT HON LORD CLARKE myself, who believe in free market economics do not believe a balanced budget over the cycle. OF NOTTINGHAM CH QC AS HE JOINED THE HOUSE OF LORDS IN SEPTEMBER 2020 that unbridled laissez faire economics is either fair or sensible. It doesn’t work. The real test is sensible regulation, within a What are the key challenges for your successor today? world-based order, with the authority to give warnings and Having decided (at the ripe old age of 10) that he wanted to make policy to protect against dangers when things start The current Chancellor faces the greatest economic crisis of become a Member of Parliament, Kenneth “Ken” Clarke CH going wrong. I don’t think we’ve made enough progress my lifetime and has so far broadly done the right thing. The QC led a successful career in politics for almost 50 years in a towards that since 2008. beginning of the crisis was not the time for traditional fiscal series of high profile Cabinet roles serving under no less than prudence. It was necessary to take the extraordinary steps five Prime Ministers. He was given responsibility for managing Assuming climate change is indeed caused by fossil to keep the labour market as intact as possible, whilst huge the UK’s finances in the aftermath of Black Wednesday and fuels, and given the global economy’s reliance on sectors of the economy went into total shutdown. Overall, during his reign as Chancellor of the Exchequer (‘93-‘97) he petrochemicals and their by-products, what steps in your what he has done in terms of printing money is sensationally successfully cut the basic rate of income tax, interest rates, opinion could be taken to shift the economy away from unconventional but was necessary. The furloughing policy was inflation, unemployment and even the budget deficit, whilst this dependence? excellent, but it is obviously impossible to continue to inject increasing GDP! such huge sums of money into it now that the economy is You sum up that problem quite perfectly. I accept the recovering. What advice would you give to young people who are overwhelming consensus that climate change is caused in interested in becoming MPs and what is the secret to large part by emissions and it is a crisis that needs to be He will probably have to inject, prudently and carefully some holding a seat for almost 50 years as you have? tackled. The Paris Agreement was the most important event in more liquidity into the system. He will also have to battle the the past 20 years in that respect, but it is a political problem. problems of returning to normality and combating interest I am always hesitant to give advice to young people because The vast majority of governments across the world still rates and inflation. He will also have to incur more public I entered politics 60 years ago, any advice I could give would need to take drastic actions to introduce the incentives and expenditure on policy areas such as social care, skills training be quite out of date as the structures of the parties and disincentives to deliver the extremely demanding targets that and re-training. I think he should also target direct support culture has changed dramatically since then. However, two scientists have set. Progress has been made but, according to and invest into new areas for future economic growth in the pieces of advice I do give are, first, try to get yourself the basis the opinions of scientists, this needs to be stepped up. digital economy, green infrastructure and so on, particularly for a career outside politics before you plunge into it. The in depressed parts of the country that have been left behind reason being that politics is, for anybody, extremely insecure, Are there any changes introduced from your time as for the past two decades. It will not be possible for him simply however safe you think the seat is. It’s a rollercoaster full of Chancellor of the Exchequer that are still relevant today? to incur evermore astounding levels of debt. The burden of ups and downs. Enoch Powell said that it always ends in tears. government and corporate debt could crush any prospects It very often does and you need something to fall back on. It All the circumstances have changed, and I was very orthodox of real growth and could cause a financial crisis when interest gives you independence and is valuable when you are doing in my approach back then as my generation were acutely rates and inflation return to normal levels, as they certainly your work with your constituents. aware of the dangers of hyperinflation. I used monetary will do at some time over the next few years. I think he should policy as my main control of demand and inflation, but I make some increases in taxation and some cuts in plainly The second, and main, thing you need is luck. You need to failed to persuade John Major to make the Bank of England wasteful expenditure in his autumn Budget in order to send get the right balance between your participation in national independent, so I had to take the decision on interest rates. out the message to the markets and to the public. It is simply politics, which is your main job, and your base in your the slightest prospect of reaching international agreement not true that any increases in taxation will have a damaging constituency, which is extremely important where you have on this issue. International governments will continue to On this subject some transparency of the decision-making effect on economic performance. to acquire a good reputation as someone who is helpful, struggle with each other for the fair collection of taxation process is necessary. When I used to set interest rates accessible and supportive. From there, every individual does it and how to stop abuse of the system, with competitively low I sometimes took the markets by surprise, but forward We cannot return to austerity but some aspects of public in his or her own way and that’s as far as I go in giving pompous taxation rates to draw companies away from one jurisdiction guidance has quite a lot to say for itself. Whilst it would be expenditure are plainly wasteful. Our biggest danger is the or veteran type advice to people who want to to enter into a to another. This is an intractable problem, which appears to foolish to say exactly what you are planning to do two months risk of a second wave of COVID-19 which will be catastrophic totally different political world to which I entered into. get worse every year and the prospects of resolving this, at in advance, there is a case to be made for positive guidance as when it occurs. Any forecasts are almost worthless as this is present, is very low indeed. some central banks have started to do. a new disease in an unprecedented situation. All the normal In the face of globalisation, where companies can transfer rules are inapplicable here, as are the intelligent guesses operations across borders with relative ease, to what What, to you, are the lessons we should learn from the I was determined to free myself from political influences on from the most able experts from the worlds of banking and extent should, and more importantly can, government 2007/8 financial crisis and the signals that we should look interest rate decisions. I even instigated a change from the fintechs. We have no history on tackling a set of problems like control the market and consumer forces without it for to allow us to predict and mitigate the risk of this ever beginning of my time as Chancellor to release the minutes of this where every major economy in the world has had to shut leading to a race to the bottom? happening again? the interest rates decisions. Whilst they weren’t read widely at down its economy for a couple of months. first, they soon became known as the “Ken and Eddie show” It’s been obvious for years that we need an international From the South Sea Bubble onwards the cycles of boom (after the late Lord George of St Tudy, former Governor of Lord Clarke will be speaking at a special Company event in agreement for the taxation of multinational companies and and bust have got more and more frequent in recent years. the Bank of England and Past Master of the WCIB) after it was Spring 2021. we are currently nowhere near such an agreement. I fear that The dot com bubble in the early 2000s should have given discovered that we, and other members of the Monetary Policy with the breaking down of the rules-based international order everyone a warning, but people dusted themselves down and Committee, disagreed on the direction of rates on occasion. Aleem Wallani has worked for the UK Treasury to which my generation attached such importance, and with this was followed by the ludicrous and unsustainable bubble This release allowed the public and the markets to better and is an active investor. ever increasing levels of populism and nationalism, there isn’t of 2006-07, in which the financial services and parts of the understand the policy decision-making process behind it.

20 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 21 LOOKING OUTWARDS LOOKING OUTWARDS

Steam Valve WE NEED TRAINING – is our ultimate The Peter Principle is largely a male affliction, on the basis that men tend to over-estimate incompetence inevitable? their capabilities, whilst women are more realistic about theirs – so my wife tells me. She says that is why women make better managers – they are just invariably capable of doing MEMBERS’ VIEWS CURATED BY COURT ASSISTANT ALEX ROTTENBERG the job they have because they haven’t been promoted beyond their competence. I suspect she may be right!

Those of you interested in early and propriety and performance. Our workforces of today It is a great truism that in banking, or coaching is thought necessary for all – me, my boss and the client – all management theory will be are better educated, trained and better equipped to although I’m sure it’s the same in what is fundamentally a different role knew it probably wasn’t true, but familiar with the Peter Principle perform – and crucially, they are more mobile. This means all very large organisations, at least needing different skills. there is no doubt we all felt better for developed by Laurence Peter in that they can jump before they are pushed – or they can get historically, those that were promoted it being said. Conversely, my other 1969. The Principle states that help to improve capability or performance – e.g. raise their were those that were good at their In one of my jobs a few years ago I boss would always try to put me in a hierarchical organisation, competence. existing jobs. Little thought was given had two very different bosses. The down in front of clients to show he people rise to their level of to whether they were actually suitable one would always tell our clients that was really the one in charge. No prizes incompetence. In other words, The Peter Principle was intended to be a satirical observation. for their new role, especially when they were very lucky to have me as for guessing which was the one who they were promoted to their The fact that it survives in management folklore today is moving from a transactional role into their contact at the bank, because I had little training in management. current role because they were because we have all been exposed to poor bosses, misguided a management role. Often no training was the best banker my boss had. We capable in their last job, but they decisions and people who appear to be out of their depth. will progress no further because However, spare a thought for the poor ‘incompetent manager’. the Principle holds true. The speed of change, information overload, technological innovation (and frustration), understanding of Gen X and Clearly, the Principle was hatched at a time when Millennial subordinates and exogenous factors, such as global LOOKING AT THE MIRROR organisations tended to be very hierarchical, with jobs for pandemics, are all happening on a modern manager’s watch. Imagine for a moment that all understand how bad they are is diversity, needs to be allowed in and life. Things are very different today – careers mostly involve It is no wonder that they may be accused of incompetence. It the managers you come across vertically zilch. So they muddle given a true place at the decision- multiple organisations and types of job. Jobs are specified, is hard to keep up. However, with age and experience comes are competent and know what through, making the lives of people making table where the big boys sit, profiled, benchmarked, competency rated, objectives set, wisdom too – they may appear incompetent in a given time management is all about … and then reporting to them a misery, and obvious, right? etc. Individuals are examined for their skills and experience, and situation – but perhaps they are not so stupid – and we that pesky little inconvenience of what’s worse, trampling on anybody competency, numeracy, verbal reasoning, integrity, fitness can surely give them another chance? the Peter Principle kicks in and we remotely competent as they see them Well, at least Dr Peter held a mirror are back to the reality of it. The as a threat and yes, you guessed it, up. The hard bit is to get those that reality of less than optimally filled surrounding themselves with as many really need to have a good look in it A FEW CEO DISASTERS posts by holders of less than optimal ‘yes’ saying nincompoop disciples, to do so. management skills or mindsets for as they can lest their incompetence The Peter Principle can be observed at you, and why?’ Fortunately, they are interest rate trends but we diversified that matter, to put it politely. The becomes too obvious. work in many industries, but especially (still) in a minority. Three come to and acquired a couple of businesses, consequential damage to companies (I think) in banking. The root cause of mind – the first is a corporate finance also in finance, but in very different in terms of revenues, efficiency, and Who is at fault and what to do the problem lies in the fact that being bod who only talked about himself, markets. The CEO made the huge the negative externalities produced, about it? Well, first of all, HR the a good banker (corporate finance, the ‘great I am’, and as far as I am mistake of assuming that the culture and the effects on the mental health infamous ‘hidden resources’, need trading, whatever) is not necessarily aware, did not do a single transaction. of the parent company also applied of subordinates, are untold. to actually start fulfilling their the same as being a good manager The second was different – he was to the acquisitions, and refused to let function rather than just waving i.e. formulating and implementing a appointed CEO of a bank that I used our FD ‘interfere’ by implementing the through all appointments. They must strategy, communication, culture, to work for – a pleasant chap who financial controls that he (the FD) felt have learned something in those and leading people. Too many banks had been a successful trader but were necessary. The end result was a universities of theirs, right? The appear to believe that the ability knew absolutely nothing about our financial disaster and, ultimately, the The sheer level of remuneration growth rate need not (luck?) to make money is synonymous particular niche business. After we had end of my old company. incompetence floating be linked to the level occupied in the with being a good manager. Given that gone bust, he then moved to another pecking order, so that those whose banks are very fond of the phrase ‘our institution where he presided over Do banks ever learn from their around is truly astounding. ambitions outstrip their competence, assets are our people’ they really could another fiasco. mistakes? Having seen I forget how and who are very adept at weaselling try harder. many bank lending-driven property themselves into the posts that they The third was different again – he was booms and busts over the last 50 And what is worse, the likelihood have no business occupying, are Over the years I have encountered a CEO of an institution of which I was years, and having encountered the of these ‘gifts to humanity’ ever disincentivised to do so - simple, good few senior bankers who have part of the senior management. He mis-promoted described above, at the becoming self-aware enough to right? Ah, and this good old hag, left me thinking ‘Who on earth hired was very good at correctly reading very least it is a moot point!

22 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 23 LOOKING OUTWARDS LOOKING OUTWARDS Back to the office Finding purpose in finance OPINIONS DIFFER ON HOW AND WHEN – AND IF – THE RETURN TO OFFICE WORK SHOULD START. COURT ASSISTANT SIMON HILLS OF UK FINANCE ON THE QUEST FOR PURPOSE JULIE CHAKRAVERTY BRINGS AN EXPERIENCED AND WELL-INFORMED CITY BRAIN TO BEAR ON THIS AS WE BUILD BACK BETTER DIVISIVE ISSUE When my dad retired from a lifetime business, is very dated, but as Adam Return to office, or ‘RTO’ in the jargon? Doom time? Julie Chakraverty, a senior ’firm‘ becomes practically more distant, working in the nuclear industry, as a Smith reminded us in his Wealth of The pandemic has emptied workplaces financial services figure and founder people have become more reliant on chemist using radiation peaceably to Nations, “It is nor from the benevolence round the world. Large-scale returns of Rungway, has unique insights into their immediate manager and team for develop new materials and medical of the butcher, the brewer, or the baker to office are unlikely until well into the challenges and opportunities. The knowledge and mentoring.” treatments, he changed tack completely that we expect our dinner, but from the new year. Work-from-home is the firm she founded, Rungway, provides and completed a PhD in the psychology their regard to their own interest”. new normal, but it brings new risks, a unique safe space – with the highest Everyday mentorship has never of happiness. Indeed, banks must be profitable and notably around regulation, cyber and standards of security and data privacy, been more needed or impactful, so deliver value for their shareholders, mental health, particularly for younger for the individual in a firm, and the new technology is being employed Over the summer I read through some but this profit must be derived from colleagues living in cramped shared community – allowing users across into the tech stack to manage safely of his papers and came across one that delivering a purpose that takes accommodation in expensive cities a group to connect and share advice and inclusively in this new normal posited that the absence of purpose into account the interests of wider like London. Though management without fear of judgement. workplace. “On Rungway,” says Ms in life leads to an ‘existential vacuum’ stakeholders, including customers, of structures have been flattened, Chakraverty, “we see one in five posts which is described as a ‘collective course, as well as employees, suppliers employee engagement has emerged as Early adopters include BlackRock, are about ’career’. At one firm, women neurosis’ of our time, driven by the and the communities in which they are Court Assistant Simon Hills a key problem. The Investment Association, ask twice as many questions on career machine age and loss of individual active. Shareholders themselves benefit St James’s Place and UBS. Martin and culture than men. At another, initiative. Whilst not usually a ‘neurosis’ from strong stakeholder engagement years ahead by demonstrating how they As an aside during our panel session Gilbert, Vice Chairman of Standard where mid-year reviews were a theme, the paper suggested that 20% of a – there is a growing body of evidence are meeting society’s changing needs on the future of banks (on page 8), Life Aberdeen, says of it: “Rungway the percentage of women who’d had clinical psychologist’s workload can be suggesting purposeful businesses and demands and making the positive one of our colleagues slated “this work is very different to employee surveys their review on time was smaller than attributed to an absence of purpose. that takes environmental, social and contribution to people and the planet from home mentality. The Phoenicians and chat systems. It sends a message men, while some women weren’t government factors into account that society expects. didn’t work from home,” he said. “They that whoever you are, whatever your certain if the conversation they’d had deliver higher long term returns for travelled the world. Yet all of a sudden, location, your voice matters.” was actually the review, given how shareholders. The Principles provide a guide to people decided in March they’re going informal it was (by contrast, no men I wonder if, as we emerged what a bank’s purpose looks like but to break a model that’s been running “Financial services firms face unenviable were unsure).” from the global financial FIRMS THAT TAKE ESG INTO just ‘lifting and shifting’ them will not for 12,000 years. They’re doing it under challenges to maintain employee ACCOUNT DELIVER HIGHER bring them to life in an individual bank. their duvet, watching what’s in the attic. engagement”, says Ms Chakraverty. “A “The second theme is a growing need crisis a decade ago, the person The Financial Conduct Authority has LONG-TERM RETURN They won’t build relationships. They will huge part of banking culture previously to help employees speak up. Covid and on the Clapham Omnibus recently carried out work on Purpose to build products. It’s doom time.” came from the personalities and societal events have triggered greater The Financial Reporting Council identify how a firm becomes ‘purpose- presence of senior people ‘walking demand from employees to be able would consider that even 20% Code requires that companies should led’. It provides three pointers. The the floor’, while the regulator will not to freely air their ideas and voice their of banks had a purpose which establish their intrinsic purpose but purpose should not be imposed by the allow for supervisory slippage. To try concerns in a safe environment. Banks what might that purpose look like? UK Board, but discovered by engaging with to fill the gaps, some firms are using have traditionally been good at formal, they understood? Finance, the organisation for which I employees and stakeholders. It should new technologies to enable two-way top-down communication, but less sure work, has endorsed the UN’s Principles be embedded in how value is created conversation and gather insight, using how to stimulate broader dialogue that for Responsible Banking which examine by the firm and its longer-term vision anonymity in new ways.” crosses grades and functions, especially The global financial crisis had very real a bank’s purpose through a number should be constantly reinforced to on sensitive topics. Anonymity is consequences for ordinary people and of different lenses, including aligning avoid short-termism. “Two themes are emerging”, she says. proving important to facilitate these as banks we are still rebuilding levels business strategy with individuals’ “First, managers have lost the early conversations and discuss topics like of trust and implementing the wave of and society’s goals and engaging with Looking forward it is clear that during warning systems they previously relied racial equality and mental health, re-regulation that followed as a result stakeholders to create a new era of the GFC society viewed banks as part of on when everyone worked in the allowing a new dialogue to emerge, of society’s disapprobation. If banks and ‘responsible banking’. the problem. In responding to Covid-19 office. Managers were easily able to which would otherwise be impossible bankers are to maintain their societal they have become part of the solution, take the pulse of what was going on for management to know about or join. ‘licence to trade’ we must be clear Banks representing more than a third of taking extraordinary measures including and engage and support their teams. Posts range from race, grief, COVID- about what our purpose is. the global banking industry have signed offering payment deferrals to personal Since COVID, face-to-face engagement anxiety, RTO, to how to build your up to support the Principles. They have customers, introducing free banking has been drastically reduced, while the career and learn from others when The fundamental role that banks committed to leading the way to a for small businesses and provided extra practical and emotional issues facing you find yourself trading from your undertake for society is to take deposits more sustainable economy by lending working capital support for firms both Risk management lies at the heart of Julie employees have grown. Suddenly, bedroom and working alone for long and make loans and in doing supporting to economic activities that yield the large and small. Banks and bankers must Chakraverty’s approach. She is an experienced managers not only need to create and periods of time.” maturity transformation and risk best return from society’s perspective now seize the opportunity that we have non-executive director who was Chairman of Risk be accountable for culture - virtually management, but perhaps this is more and by responsibly guiding customers been given by this awful pandemic to and Senior Independent Director of Aberdeen - but to be fluent in race relations, of a function than a purpose. and stakeholders to better manage embed our purpose – to make people’s Asset Management. She has also served on the boards of Santander UK, Spirit Pubs, and others. mental health, navigating extreme social and environmental challenges lives better – in society’s psyche. Her earlier executive career was at UBS, where uncertainty and effectively on-boarding The idea that profit creation should be and opportunities. In this way banks will she was a member of the investment bank board. and developing people remotely. As the the sole purpose of a bank, or any other continue to play a central role in the

24 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 25 CHARITY & EDUCATION CHARITY & EDUCATION

The Brokerage internship opportunities to give people the chance to get the security guard who has worked at the company for over their foot in the door. A lot of younger people do not have 30 years. He is the first person to enter the office and is the WHAT DO COMPANIES NEED TO DO TO MOVE TOWARDS A BETTER FUTURE ? much knowledge of the corporate world. Many opportunities last person to leave ensuring that other staff are able to work are directed at the Russell group universities, which means in a safe and stable environment. The cleaner who migrated students with skills might miss out, since their CV lacks the from overseas just to make a decent living for her children to name of a prestigious university. grow up in a country where educational and health needs can WCIB has been involved with City of London social mobility of our annual spend on charitable grants. During the first be met. Her smile may be the only smile you may see today, charity The Brokerage since 2005 and the relationship has Covid lockdown in 2020, WCIB donated £5,000 to help the Some people who choose not to go to university and cannot but you will never know the hardship she may be facing. grown as The Brokerage has developed and executed its charity establish ‘Generation 2020 Academy’, an integrated access job roles through doing an apprenticeship. For certain programme to have a positive impact on underprivileged digital programme. We asked nine of its ‘Generation 2020 jobs, specific knowledge is not required, so teams could By companies recognising the importance and the beneficial young people in London. We currently fund its ‘Gateway to Ambassadors’ to share their views on what companies need diversify to include non-graduates as well as graduates, impact employing staff from the BAME community has had on City Careers’ programme with £42,000 a year, just under half to do to move towards a better future. bringing different perspectives and experiences to the team. their productivity and success rate. Then it is without a doubt that they must publicly celebrate this. Pamela Chirinos Montoya Companies have a tendency to say and promote Nafizah Islam To promote more their inclusivity, through rising diversity diversity and inclusion companies should ON WHAT COMPANIES NEED TO DO ON Individuals should help each other to learn to eradicate and their culture. However, often this seek to celebrate cultural differences DIVERSITY AND INCLUSION gender biases and thus promote gender equality. Everyone is only talk and little actual progress between workers with the same should be respected. Companies need to encourage more in the company’s environment. There amount of significance. For example, at use of gender-inclusive language. It ensures individuals feel needs to be an active change with what Christmas many workplaces hold festive Patrick Ntiamoah Companies are asking comfortable in sharing how they identify. companies say and what they are doing about inclusion. This dinners and decorate the workplace with about inclusivity – and if not they should includes regular monitoring of statistics: gender inequalities, festive themed decorations. I think that to have this practice be asking – because it is a fundamental Sultan Adeshina Students who aren’t ethnic minorities, religious groups, socioeconomic adapted to different cultures and religions will help promote part of making the company suitable part of the dominant group in society, backgrounds and more. more diversity and inclusion in the workplace. for a wide range of people. Inclusion whether it’s gender-related or ethnicity, is often partnered with diversity, but are taught by the broken system to A rise in workshops and events within the company will bring By celebrating diversity amongst workers you are creating a it can be seen as the ‘lost son’. From feel that they couldn’t land the big City in individuals of diverse backgrounds, which would encourage friendlier and inclusive workforce. As such, individuals from my point of view, people focus on diversity and often forget job they dreamt of. Or there were too them to join. Social events for current employees could different backgrounds are more likely to apply for companies. about inclusion. Once you’ve got a diverse talent, inclusion is many barriers that prevented them from also be used to promote inclusivity to interact more with Furthermore, companies can also hold events that celebrate fundamental in maintaining that amazing talent. promotion. The odds are stacked against them. I believe it’s individuals that they do not normally socialise. diversity to showcase that their workplace is friendly and the responsibility of companies, who care about diversity and inclusive. For instance, in honour of Black History Month, Being more inclusive, companies should focus on assessing inclusion, to demolish those beliefs and improving the odds in To be more inclusive companies need to challenge the companies should run panel talks about diversity. the current views of people within the company and taking on favour of the non-dominant groups. ethnocentrism they foster outside and inside of the board their opinions of what can be improved. For instance, if workplace by celebrating and encouraging the differences Billy Zi Rong Hung By having there is a member of the LGBT community or ethnic minority This could create more programmes to get BAME students between all workers. Promoting diversity can be difficult companies understand more of different group working within the company, senior members of the through the door and improve the retention rate where as the company needs to adapt. This is why companies cultures, uniqueness and abilities, it company should speak to them and see what can be done to they feel that they belong in. It’s not an impossible task can increase and improve diversity through new incoming would raise awareness of the minorities understand people within those communities. for companies. Where it becomes impossible is when the employees. This may mean having internships and insight as companies ultimately need these company aren’t ready to change the unjust foundations and to days offered to those of more diverse backgrounds and give talents in their team in order to thrive One of the keys to being inclusive is education. I believe that create a brighter future for us all. the opportunity to attract different employees and improve and have ideas that are outside the box. companies should invest in educating the communities that company culture. They may see that the company is a place The world is rich with stories – don’t restrict yourself to the they would like to bring in. Once people are in, they will feel Emily Emiru Companies must ensure of inclusion and welcomes diversity. ones that we already know. Diversity is more than saying, but comfortable and the company will understands them and that they cultivate an environment that acknowledging and understanding. their background. That mutual understanding will become a enables employees to feel comfortable Michaela Sey One way in which healthy relationship between the company and communities, by putting appropriate policies and companies can promote diversity is by and therefore bringing more people into the company. procedures in place. To achieve this, creating a hall of fame for their BAME ON HOW COMPANIES CAN HELP TALENTS FROM the on-boarding process must be staff. A hall of fame is influential in DIVERSE BACKGROUNDS POST-COVID? Diana Hysenaj Having a community of inclusive, with measures to meet the displaying to the public, visitors and cultures which embrace, empower and different needs of their employees. For instance, those with other staff from dominant groups who Afrin Moumita Companies should empathise, is necessary for becoming visual or hearing impairments might need documents given work at the company the outstanding always prioritise a person’s attitude more inclusive. Companies need to to them in another format. Single parents might need more achievements and dedication that BAME staff have achieved. and determination over their academic create a safe environment where flexible hours. The on-boarding process should involve other It will demonstrate to staff that aligning themselves to be achievements. PwC is a great example employees feel comfortable sharing employees too, so that new hires find it easier to meet their from the BAME community their work at the company is – they are a socially inclusive company their voice and giving their opinion. new colleagues and the workplace environment. appreciated and will set an example to future employees that values real talent; they no longer Companies should also promote diversity, ensuring everyone when considering what company to apply as those values are use UCAS tariff as an assessment tool feels welcome. If not already, inclusivity needs to be a core Companies need to extend beyond where they typically associated with them. for the majority of their undergraduate value, which you regularly work on to improve and develop. find jobs, including the phrasing of job descriptions so that and graduate opportunities. The grades awarded to students Another step is to support conversations about people’s a more diverse range of people are interested in the role. The hall of fame should not be applicable just to staff on a this year were subjective. Nobody can predict how a student gender pronouns and to company’s email signatures. Companies should also provide more apprenticeships and high payroll, but should also include long-standing staff. Like

26 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 27 CHARITY & EDUCATION CHARITY & EDUCATION

will perform in their real exams. We all know that this year fact that in the S&P 500 companies that only 22% of the wasn’t the year for many students. So, in order to ensure that independent directors are Black, Hispanic and Asian. The lack Supporting School-Home-Support all students are able to unlock their full potential, regardless of diversity here would suggest to young adults that getting of their background, we need more companies to either to the top or moving up the rank is against minorities odd reduce their UCAS tariff entry requirements for graduate hence progressing in financial services is discouraging to through the pandemic crisis positions/internships or just solely focus on the individual’s young adults from entering. However, companies are looking COURT ASSISTANT TOM NEWMAN, IMMEDIATE PAST CHAIRMAN OF THE CHARITY performance at university. for ways to diversify and try to be inclusive such as schemes AND EDUCATION COMMITTEE, WITH TWO OF MANY SUCCESS STORIES directly to BAME students or raising the problem of Black Online assessments have become quite popular amongst Lives Matters. many top firms – it truly gives everyone an equal chance of Since 2016 the Company has been their concern about the impact practitioners regularly keeping in touch being successful at getting the job. We must stop applications WHAT DO COMPANIES NEED TO BE DOING, supporting School-Home-Support the crisis was going to have on its with families and working with school from being screened out just because of their previous ESPECIALLY POST-COVID TO PROMOTE (SHS). SHS works with disadvantaged fundraising. The Company was one of a staff to help ensure children could performance at college, which is why personal development children and families to maximise special group of funders that provided continue to learn. Our practitioners A SUITABLE WORKING ENVIRONMENT is key – those who embrace failure and have a growth mindset educational opportunities and improve additional unrestricted funding that were part of a wider school response are what companies should be looking for. FOR TALENTS FROM LESS ADVANTAGED life chances. Its vision is for every allowed them to continue delivering our to the crisis. For many of them their BACKGROUNDS? child to have the support they need to services to families during lockdown. role was to maintain contact with Sultan Adeshima Post-Covid companies like EY’s Smarter engage with education and thrive. It the schools’ most vulnerable families Futures programme who have existing programmes in place Nafizah Islam In a post-Covid world, companies should seek aims to achieve this by engaging highly throughout lockdown. For some of to improve there already impressive D&I in the workplace to ensure that their work environment is representative of trained practitioners based in schools SUPPORTING FAMILIES DURING our practitioners this added significant need to take into account not only the financial effect this various cultures and backgrounds. Companies should also and working with children and their LOCKDOWN THANKS TO YOUR numbers to their core caseload. For Covid time has had on a lot of families but also the negative hold events regarding the topic of diversity in order to dispel families to tackle barriers at home GENEROSITY many vulnerable children and families, effect it’s also had on a lot of economically deprived students’ myths and encourage people to apply. The company should such as poverty, homelessness and our practitioners were the only progress at school and ultimately, most likely to have negative regularly survey whether their workers from disadvantaged domestic violence that prevent children SHS practitioners are key workers meaningful contact that they had with effect on their final grade come summer. backgrounds are satisfied and happy. from engaging with their education. and continued to support pupils someone from outside their household Since 2017 it has funded an Economic and their families throughout the during extended periods of isolation. We already saw a glimpse of the catastrophe Covid caused to Companies can help by having specific schemes dedicated Wellbeing Toolkit, a valuable resource crisis. Some practitioners continued students’ grades in the summer 2020, but the most negatively towards recruiting ethnic minority talent. Such as a work that its practitioners can use when working in schools as a part of the Our practitioners are now back in affected were the BAME students and from this untimely experience programme dedicated toward ethnic minorities. working with families in supporting skeleton staff that remained in-school school supporting students. The turn of events maybe these programmes or internship roles Or hold events that celebrate diversity to showcase that their their economic wellbeing. It includes but the majority worked remotely, support from the Company during students will be applying to for this year’s cohort of students workplace is friendly an inclusive. In honour of Black History information on employability skills, continuing to support children and lockdown and for the last four years can take into consideration a possibility of hindered final Month, companies should run panel talks about diversity. housing services, food banks and families. Home visits were reserved has enabled SHS to provide the most grades when setting the entry criteria for programmes and universal credit. for cases where there was concern effective support to some of the work experience opportunities. To make sure we continue Diana Hysenaj Companies can promote a positive working about children’s safety and other country’s most disadvantaged families. to improve the chances of a more diverse and inclusive environment in the workplace by supporting growth and During lockdown SHS reached out to emergency situations. Support was workplace. strengthening development opportunities. They should offer a number of its supporters to express effectively provided by phone, with SHS schemes where talents from less advantaged backgrounds can Billy Zi Rong Hung Another step of the process is breaking apply to receive funding to pursue a learning or development the chain between young people’s perception of the large course. By doing so, companies will be breaking the barriers organisation. Companies should make a proactive move in by ensuring that programmes and courses are accessible to going into sixth forms and giving them insights into what it’s individuals from less advantaged backgrounds. Moreover, this like working in their company. However, there should be a vice provides opportunities for employees to develop their skillset versa approach from young people as well, as they should be and utilise them in the workplace too. aware of opportunities that may come up. Companies should meet with talents from less advantaged The process of bringing in brains is through schemes such backgrounds and ask them what support they would like to as the BAME direct scheme or scholarships that fund achieve their ambitions. There should also be consistency in disadvantaged students who are academically driven but these programmes to help increase employees’ confidence lack the opportunity. I believe bringing more young adults within their roles. I strongly feel that especially post-Covid drives up the potential of the company as this contributes that working on mental health in the workplace will help a variety of ideas to the companies; hence they are more individuals become mentally resilient to stress and any other likely to succeed. This is also supported by a ‘Forbes’ survey struggles that may occur, which ultimately improve vital skills, suggesting “best workplace for diversity grows 24% in like critical thinking. Creating a mentally healthy workplace can revenue growth”. Students in our age are thought to think provide stability to individuals, especially due to the effects of entering the financial service is a job that it’s near impossible Covid. Therefore, these are two fundamental steps in evolving to enter or they do not “fit in”. Why? This, coupled with the a workplace into a positive and suitable working environment.

Diversity is more than saying, but acknowledging and understanding. – Billy Zi Rong Hung

28 THE INTERNATIONAL BANKER / AUTUMN 2020 29 CHARITY & EDUCATION CHARITY & EDUCATION

The art of the pitch COURT ASSISTANT ALI MIRAJ, NEW CHAIRMAN OF THE CHARITY AND EDUCATION COMMITTEE, ON AN INNOVATIVE VIDEO-BASED SCHEME TO BRING NEW CHARITIES TO THE COMPANY’S ATTENTION

FINANCIAL LITERACY FOR YOUNG OFFENDERS employability upon release; and to enhance their self- It is a great honour to assume the annual schools essay competition close on 31 December 2020. Please VIA INSIDE CHANGE confidence and self-esteem, and have fun. Chairmanship of the Charity and and the Lombard Prize in which 20 do not worry about the editorial Education committee, which fulfils universities participate. But we also elegance of your video pitch. We are The WCIB’s charitable efforts are focused on helping In February 2020, Create took the project to HMP Brixton. one of the fundamental aims of our support other charities that meet interested in raw engaging content underprivileged young people in London through It delivered 12 half day workshops over seven days with 10 Company. I must thank Tom Newman the aims of the Company which have rather than the Oscar-winning standard supporting their: prisoners. Working with Create’s drama artists, participants for all his hard work and first-class until now, either resulted from direct of your filming and production. Once devised an original radio play based on financial themes and stewardship of the Company’s efforts approaches from various organisations, you have recorded it please send it into • Education concepts that they explored during the project. These will in this area over the past three years. or come from introductions by the Clerk along with one-page briefing • Financial Literacy be shared with other prisoners throughout the country via He leaves big shoes to fill and I value his members. on the charity. • Employability and National Prison Radio (NPR) later in the year. continued support. • Raising their aspirations in all the above areas. The two most compelling proposals All participants who attended the final project day completed PLAY YOUR PART will be put to a vote of all members and One of the areas where the Company has become involved feedback questionnaires as did staff from HMP Brixton and AND MAKE A DIFFERENCE the winner will be announced early next in recent years is in supporting and funding financial literacy Create’s artists. One of my key objectives year. So please get involved and have training for young offenders that are soon to be released This is where you can play a part and some fun. from prison. At the current time young offenders are released is to get members more make a difference. If you would like to from prison with £46 and told to make their way in life and 88% of participants said they developed a actively involved in deciding secure a donation for up to £2,500 for a We look forward to receiving not re-offend. £46 does not go a long way in today’s world for which organisations we charity that would benefit from support your contributions to: anyone but particularly not for anyone who does not have any greater awareness of financial issues and the from the Company then this is your [email protected] financial literacy. largest gain in understanding was “I know should donate to by inviting chance. Please record a short video up you to pitch for a charity to a maximum of two minutes on your Government research suggests that lack of financial literacy where I can get help and advice about money.” mobile phone outlining: what the charity presents a significant barrier to the effective resettlement you feel is worthy of the does and why it is worth supporting; of prisoners back into the community. Lack of financial skills what the donation will be used for; is particularly marked amongst young prisoners who often Company’s support. any involvement that you have with report spending money as soon as they receive it. Other quotes included: the charity as a personal connection is preferable; and how the charity meets Last year the company helped to fund a financial literacy “I have learned about managing debt. I learned that credit the objectives of the WCIB. programme, Inside Change, at HMP Brixton put on by Create, cards and loans are more accessible options to me than I The International Bankers Charitable a leading charity empowering lives and enhancing wellbeing thought.” - participant Trust donates over £100,000 to various The charity you pitch for should through the creative arts. charities every year. A sizeable chunk operate in one of the areas in line with “This project may make them think twice before committing of this goes to the Brokerage, which the Company’s aims. We partner with Inside Change is a financial literacy and radio drama project, themselves to spending.” - staff we have had a relationship with for organisations that work with young designed by Create to give prisoners nearing their release the many years and provides programmes people in the areas of education, opportunity to explore their creativity in high quality creative In these difficult times any help the company can provide that support young people from financial literacy, employability and arts workshops led by professional artists; to use drama and to develop financial literacy that helps young offenders disadvantaged backgrounds to enhance raising aspirations. We also support scriptwriting to develop their literacy with an emphasis on successfully resettle into society, has a huge payback. their career prospects. charities that work with disadvantaged financial literacy; to enable them to develop social skills that individuals with a clear purpose where will help with relationships within the prison environment Tom Newman We pursue our educational activities the impact is measurable. All charities and on release; to develop skills that will contribute to through our relationships with a must carry out their activities within number of inner-city London schools, England and Wales. Nominations will Ali Miraj

30 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 31 CHARITY & EDUCATION LOOKING INWARDS Lockdown legacy: responding The Membership to the personal challenges faced Committee’s virtual summer by the young COURT ASSISTANT TIM SKEET, CHAIRMAN OF THE MEMBERSHIP COMMITTEE This has been a very odd time to chair crystal ball does not tell me when some important aspect of the Company’s HONORARY COURT ASSISTANT JEAN STEVENSON REPORTS ON THE ROLE OF MENTORING a committee of any kind. When I took semblance of normality might return. community spirit. IN SUPPORTING YOUNG PEOPLE WHOSE LIVES ARE DISRUPTED BY THE PANDEMIC over the Membership Committee late Interestingly I have found that people last year, I thought that this would sitting at home, not spending money Armed with whatever we learn from I am one of the many lucky ones whose life was not materially with it, and there was guidance around each for both mentor be a reasonably straightforward and with, in some cases, perhaps a the launch of this programme, we will affected by the recent and continuing challenges posed by the and mentee and suggestions about what work should be done task. With our strong membership little more time to manage their own continue to welcome new members pandemic. I attend many meetings, participate in a number of before each session. and enthusiastic band of committee affairs, can prove more amenable and explore ways of engaging effectively fora, attend exercise classes and so on, and these seemed to members eager to help, I saw myself to filling in forms and getting their with them. Whatever our children transfer almost seamlessly to Zoom, Google Meet, Skype or In the past, I had a mentor myself, and I have children of my settling down to chair some meetings, applications sorted. Moreover, the might say as they surf effortlessly Webex Events with the smallest of disruption to me - although own, but I was not sure either experience qualified me to attend events and support committee Company is actively offering some across social media and peer endlessly I still prefer real rather than virtual interaction. guide and encourage young adults in a period their lives of members beavering away on a excellent networking, even if we can’t at their screens right through lunch, great uncertainty and with no recent precedent. However, multitude of initiatives. What could meet physically. Clearly this fills an direct human conversation and It was not so for school and university students, who were nothing ventured, nothing gained and the Brokerage checked possibly go wrong? important need when people can contact are still essential elements of no longer able to go to school or college, take important in with both mentee and mentor during the programme to easily feel isolated or seek diversity of private and professional life. Naturally exams, or look forward to work experience and internships. As make sure everything was going well. We all know the answer to that company. The lure of walking the dog companies such as ours foster their chairman of the Schools Working Group, a subset of the WCIB question. Like most of you I have or doing the washing up eventually sense of community through personal Charity and Education Committee, I was particularly interested grappled with Zoom, struggled with loses its sparkle. Thank goodness my contact and fellowship. Indeed, this in how we could help school students and what would happen the mute button and have had to colleagues at the Events Committee and has been underlined by the lockdown to the Gateway to the City Programme which was run by the rethink my modus operandi. It is one Communications Committee have not experience, and confirmed by many Brokerage on our behalf. I loved the experience and looked forward to thing meeting people, and promoting been idle. younger bankers, who suddenly our weekly sessions, and I believe the feeling ourselves as a great place to network, found themselves cut off from those The Brokerage was quick to respond to the challenge and socialise and pursue vital charitable During the lockdown two initiatives watercooler moments and camaraderie started the process of moving as many of their interactions was mutual. activities, but quite another to sit at have been launched under this of the office. With this in mind, we at with students online; a number of our members participated home, locked-down, attending hastily committee’s auspices. The first, already the Company must be ready to warmly in Master Classes online, speaking to and interacting with reconfigured virtual, online events. I reported, is the successful creation and welcome the returning refugees from students on the programme. These Master Classes were certainly reached for a plan B, as of launch of the Diversity and Inclusion home and lockdown, and work hard recorded, and will be made available to the schools we work I learnt how the week of my student panned out (one of course did every other committee chair sub-committee under the capable chair to bring new members quickly into with to engage with future students on such varied City careers the exercises was to share a week-long diary as background and others besides. of Angela Greenough. The second is the fold, whenever that might be. This subjects as marketing and communication, leadership and to a session we had on time management) and that led us the launch of the ‘buddying scheme’, initiative is one aspect of this. resilience, green finance and, more generally, mainstream completely off piste to talk about exercise, playing computer Hats off to everyone who rallied round described elsewhere, which is designed As the buddying initiative will hopefully banking. The Brokerage also initiated a new structured games, films and literature. As well as covering off the topics to keep the show on the road. I am to connect with newly joined members continue to be a feature of the mentoring programme to try to help students prepare for the in formal sessions, my mentee told me that she had taken pleased to report that our membership of the Company and foster a sense Company’s outreach to members, we world of work and new WCIB Freeman Scott Levy (featured on away a lot of tips from our more informal chats about life, numbers have held up well, a testament of belonging. While the D&I sub- on the Membership Committee would page 35) and I volunteered to be the first mentors to try it out. and an appreciation of how to look at issues from different to the essential character of this committee is already working hard on a of course be most pleased to hear from perspectives of which she would otherwise have been Company and its people. But we cannot raft of initiatives, the latter initiative is any Liveryman who might wish to help Everything had to be virtual. We had an initial training session oblivious. The best news was that on the morning of the A take anything for granted, and my still in its early stages. and offer their services as a buddy. where we were given the rules of engagement and code of Level results, I received an email from my mentee with the Naturally, I would like to thank all conduct, taken through the eight-week programme and had news that she had got into Oxford and that she wanted to BUDDY, WELCOME TO THE those members, including my deputy any questions or concerns we might have dealt with. The keep in touch. We have a tentative plan to meet up in the COMPANY- A NEW INITIATIVE Mary Foster and stalwart secretary programme was for year 13 (last year of school) London state Christmas holidays to discuss how the term has gone but, Robert Owen for their support and LAUNCHED school students who had obtained good grades in English crucially, to meet in person. enthusiasm. Maintaining our sense and Maths at GCSE, were interested in careers in financial, The Membership Committee finally of community spirit in the face of professional or related services, and had either been eligible I hope that by next summer the pandemic and its impact will launched its ‘Buddying scheme’ over unforeseen challenges is an important for free school meals or whose parents had not been to a UK seem like a distant memory. What I will remember vividly is the summer. This scheme is designed to priority for all committee chairs. university. my mentoring experience which I would certainly be happy mobilise a team of seasoned Liverymen to repeat and would encourage any reader to do the same. to offer new members a personalised We were introduced to the STACK skills assessment (self- Eight weekly sessions plus training seems like a long time and welcome to the Company and help What I did in lockdown – Tim awareness, teamwork, attitude, communication and a big commitment but goes by in a flash and it can be done at them navigate their way. Of course, this Skeet is featured (left) with one of knowledge) which each student was asked to complete before a time to suit you. The benefit that you and your mentee can is a strange time for all of us. Arguably his lockdown projects. Read about the first mentoring session. Based on this assessment, the derive is potentially immense. Legacies come in many forms offering new members some direct this, and more, on the Company’s mentor and mentee together mapped out the shape of future but this one is a two-way street. contact with the Company just when LinkedIn group. sessions. Each STACK heading had several topics associated we are all stuck largely at home, is an

32 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 33 LOOKING INWARDS LOOKING INWARDS

Communications, New Freemen JOHN THIRLWELL WELCOMES TWO NEW FREEMEN TO THE COMPANY communications… WCIB Accessories COURT ASSISTANT TIM JONES, CHAIRMAN OF THE COMMUNICATIONS COMMITTEE, ON countries and support young aspiring services to those underserved. HOW LOCKDOWN MEANT ANYTHING BUT professionals in advancing their career. Financial inclusion is a passion of It helped me to partially fund my MBA mine and aligns with the WCIB charity studies at the London Business School work that focuses on underprivileged Monday 30th March sticks in my mind. It was just and opened the doors to the Mansion young people, particularly in the areas a week after the publication of The International House and Livery Companies. of education, financial literacy and Banker Spring Magazine and the Communications employability. Committee had to hold its meetings by Teams. What Through this connection, I have a lot has happened between then and now. Normally received impactful mentorship, It is remarkable to see the WCIB Comms Committee would meet once a quarter but participated in annual events, and continue to hold its wonderful just two weeks later we were meeting again, debating ultimately established my career in the traditions, while bringing together the merits of Zoom as a virtual platform and whether financial industry. In fact, it was during leaders from various financial services the Company should adopt it, or another, in order to one of these events that I had a chance firms. I’m incredibly excited to be part maintain member interactions. How much ‘the norm’ to meet Nicholas Westgarth, an of an organisation that focuses on Zoom now is – indeed our Annual Installation Court ELENA Adviser to the Trustees of the Mansion educating its members and also see it had to adapt to that very format. That so many of us NOVOKRESHCHENOVA House Scholarship Scheme and learn as a way to continue to advocate for now take it for granted, there is little doubt that such BOWTIE £20 about the WCIB. diversity and inclusion in the financial technologies and approaches to meetings are with us My journey to the heart of the City sector. I am particularly interested to stay. of London financial services and I’ve started my financial career in the in contributing to the WCIB’s new eventually becoming a member of banking sector and I am currently Diversity and Inclusion Sub-committee. Comms Committee has continued to meet at very the WCIB started when I received leading an international arm of a much more frequent intervals as a variety of topics, a Mansion House scholarship. The digital remittance company serving I look forward to discovering new ways not least C-19, have been variously topical and needing scholarship aims to forge positive underprivileged segments of our I can contribute to be disseminated via our various digital means. links between the UK and other society and expanding financial Mental wellbeing and the Green Ribbon Campaign, ethnicity issues and the Black Lives Matter movement, LGBT issues and Pride Week, climate change and London Climate Week. And an array of fascinating webcasts – Talk and Toast, Bank Balance Sheets and its activities. I joined the Company interesting for me) and I spoke to my the Virus, even a virtual Rum Tasting to name a few. because I wanted to devote some mentee from not only London but of my spare time and energy to the also Estonia, Lithuania and Switzerland On behalf of us all can I offer our sincere thanks to Company’s objectives to make a during those eight weeks which gave the Clerk for his sterling work in ensuring our website CUFFLINKS £50 TIE £20 difference through education for him as well some insight in to what life and social media platforms remain superbly updated, young people. might be like as he ascends (I hope) to John Thirlwell for his editorship of eUpdate, to the corporate ladder. George Littlejohn for stepping up to the editorship of In a strange way, the recent past has this magazine, to Alex Jones for humouring, organising PEWTER BADGE £20 allowed me to experience more than The virtual events (including the and minuting the affairs of the Committee and to all its – CAN BE USED AS A if I was in and out of the City. I jumped excellent rum tasting) were easier members for their continued support and enthusiasm. BADGE OR PENDANT at the chance to mentor a young man to jump in to then they would have Whatever will the Spring edition bring? (chain not included) through the Brokerage. This is an been 12 months ago and for that, excellent programme and I can heartily these interesting times have been a recommend it; one hour a week for benefit. I do, however, feel a little odd SCOTT LEVY eight weeks (on Zoom) goes by all too at having my installation on Zoom. I quickly. This was as much a challenge congratulate the Company in adapting I know the Chinese like to say “may for me as I hope it was a benefit for to this strange world, but relationships you live in interesting times” but to him. Partly because during the months are built face to face. I dearly hope Order and pay via the Shop in the Members Area of be honest, enough is enough. On the of June and July I returned to business we return to some kind of old normal the WCIB website www.internationalbankers.org.uk positive side, it has been an interesting travel in Europe, I had to actually sooner rather than later, and life as we introduction to the Company and prepare for these sessions (which was used to know it returns. Prices for all items incl VAT but do not include P&P.

Court Assistant Tim Jones

34 THE INTERNATIONAL BANKER / SPRING 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 35

LOOKING INWARDS LOOKING INWARDS

From breakfasts to podcasts to The runaway back to back winners 21st September – The future of were the City of London Police with global trade negotiations 88 stableford team points who This panel discussion examined the webcasts in six weeks - Zoom to the brilliantly navigated a very testing current global trade environment and course with fast greens. The Makers its implications for geopolitics, covering of Playing Cards were runners up with the UK’s post-Brexit trade negotiations, rescue in the pandemic 78 points. The Farrier’s Company the US trend towards isolationism, won the yellow ball competition with Chinese tariffs and trade pacts, and After lockdown, the Company’s physical events slammed to a halt. But thanks to new technologies, the fellowship a total of 29 points. Andrew Lee (C), free trade in the EU. Speakers were continued with more than a dozen online events. These have been high-profile interviews and discussions to support Jason Van Praagh, Tom Dissen and Richard Burn, Her Majesty’s Trade the finance profession as well as providing members with as much interesting insight as possible into the effects of the Michael Bowles represented for the Commissioner for Europe, and John pandemic. Here is a selection. International Bankers, no silverware Ryan. Richard previously served as Alex Rottenburg for us this year but the team mustered Her Majesty’s Trade Commissioner for a respectable mid-table performance. China. Professor John Ryan is a Fellow More detail on many of these is available on the Company’s website: Whats New Webcast 8th September – Inter-Livery Given the limited capacity and general at LSE IDEAS at the London School of Clay Shooting Competition social distancing restrictions eliminating Economics and Political Science and This competition was held at the the charity luncheon, the Paviors’ will a Network Research Fellow at CESifo, 26th March – Virtual Talk & Toast: roles, addressed key issues facing our Holland & Holland shooting grounds again be hosting this event at the same Munich, Germany. Xavier Rolet and Nicole Sierra-Rolet sector in this special event, which had in Ruislip. 82 teams competed over venue on 15th September 2021. First event after lockdown; recorded as more than 500 viewers – a standout the 2 days - the Horners won but the 30th September – Green finance a podcast. number in these days of non-stop video Gunmakers had 3 teams in the top five. Golfing prizes aside, the real winner with Past Master Sir Roger Gifford delivery. He was hosted by Robert This year was the WCIB’s 8th attempt was The Lord Mayor’s Appeal who and Laura Sandys CBE Merrett, then Senior Warden and now at covering themselves with glory. We were not expecting the golf day to go See page 11 for a full report on this Master. This interview examined some fielded 2 teams - neither team was at ahead this year and for whom the event event, organised by the Associates, of the implications of the Covid crisis the bottom but the A Team was not far raised £1,600. and the background. for banking and financial services, as off; the B Team did better (just) but well as for higher education and other all of us (including the 4 members who 1st October – International sectors. Scott Moeller is the Director were new to the event) had a most Bankers Golf Society of the M&A Research Centre at what enjoyable day. It was warm and sunny, Following the cancellation of the was formerly Cass Business School, Alderman William Russell, the Lord Mayor and the organisers did a first class job in Spring and Summer meetings, the and its former CEO and Director of producing an excellent day in spite of all Golf Society was extremely grateful to Executive Education. 13th July – The Lord Mayor, live the Covid restrictions. Swinley Forest Golf Club for hosting from the Mansion House Report by Alex Rottenburg. our Autumn meeting on in a very safe Dame Inga Beale DBE 29th June – The Global Cyber William Russell has over 30 years’ environment. Sandwiched between Alliance: action not words experience in the financial and business days of very wet weather, the day 20th May – Talk and Toast: Cyber risk is a global challenge that City including holding senior positions was bathed in sunshine and great golf Dame Inga Beale and Antonio Simoes requires non-traditional collaboration. in the national and international banking was enjoyed by all. Charles Burrows The latest Talk & Toast power couple The Global Cyber Alliance (GCA) sector. In 1987 he went to work for won the De La Barre trophy with a were Dame Inga Beale, former CEO of focuses on less talk and more action. First Boston Corporation before joining Angela Knight CBE (right) magnificent 38 points, closely followed the Lloyds insurance market and now It brings the global community together Merrill Lynch in 1992 as an Investment by Mark Stevenson on 35 points. The a NED, and Antonio Simoes, former to collaborate and develop practical Banker in Institutional Equity Sales, 19th September – 306 Hospital Korts Salver awarded to the highest head of Global Private Banking at HSBC solutions that deliver measurable working in Asia, New York and London. Support Regiment (306HR) scoring member aged over 60 was won who had just moved to become CEO results in the fight against malicious William is currently Chair of CDAM, Angela Knight CBE, now Junior by David Potter with 33 points. Noel of Europe for Santander. As part of the cyber activity. GCA is backed by a a London based Asset Management Warden, joined 306HR in their Virtual Harweth won the nearest the pin prize then Master’s Open Door, Open City shining army of major organisations business, and Senior Advisor to STJ Moor Park Golf Club Training Period and delivered an online with a great shot on the 17th par 3. theme for her year, they discussed the including law enforcers like City of Advisors. He was also on the Board of presentation entitled ‘Covid, Brexit future of the insurance and banking London Police, London’s Metropolitan Innovate Finance, the industry body for 16th September – Lord Mayor’s and banking - and the impact on you, industry, the new type of leadership Police, the Manhattan District the UK based FinTech community. Golf Day the customer.’ An informative and needed post-Covid, London’s future as Attorney’s Office, and the United States The International Bankers Golfing interesting romp through the origins of a mega-City and why we should Secret Service. It is hosted in UK by 27th August – Virtual rum tasting Society (‘IBGS’) participated in the first banking, the challenges of the pandemic use ‘uncomfortable’ words like gay the City of London, and chaired by The Virtual rum tasting event was Covid restricted City and inter-livery and the opportunities of the post-Brexit and lesbian. Scott Charney, head of security policy hosted by the Whisky Exchange and the event of the year on 16th September world – this was a welcome respite in at Microsoft. Andy Bates is Executive person talking us through the tasting 2020 - The Lord Mayor’s Charity Golf a day of clinical presentations covering 5th June – Professor Scott Director of GCA in UK, Middle East and experience was Mitch Wilson the Black Day. Following on from our hosting of a range of paediatric, obstetric and Moeller, City, University of London’s India. A chartered engineer, he most Tot Rum Global Brand Ambassador this excellent event in 2019, the Pavior’s gynaecology topics. Business School recently served as CTO of Verizon from Elixir Distillers. The tasting took us Company did a fine job organising the Professor Scott Moeller, formerly a EMEA. He discussed the key themes – the origins of rum, how it is made and day, held on the High Course at Moor senior banker at Deutsche and Morgan and practical steps to stop the crooks the differences in production methods Park Golf Club in Rickmansworth, Stanley, amongst many other leadership - with the then Master. in the main rum producing countries. Hertfordshire - pictured.

36 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 37 LOOKING INWARDS LOOKING INWARDS

15th October – Path to Master – its technical maturity, investment From the Clerk being on a Committee, navigating horizons and risks. Space technology is the Company fundamental to all aspects of everyday THE COMPANY DEMONSTRATES RESILIENCE DURING THE PANDEMIC CRISIS The Master and Standing Committee life, from weather forecasting, remote Chairmen hosted an evening to sensing, GPS and broadcasting, to Every spring I update the Risk Registers (CiviCRM) on which I run all only on a desktop computer in the enhance members’ enjoyment of and everyday applications in electronics, for the Company and the International membership and contact records, Clerk’s Office at Furniture Makers’ Hall; success within the Company. This was telecommunications and gaming to Bankers Charitable Trust (IBCT) and generate all bulk mailings to members Sean Lo did sterling work travelling the first in a series of events. The aim hospitals, traffic lights and even white they are discussed by the Finance and which supports the WCIB website. into Furniture Makers’ Hall whenever of this one was to get fellow members goods. We brought together a panel of Committee before being presented This is a Cloud-based system (with necessary to work on the IBCT to hear how they can participate in the UK experts to present the opportunities to Court. High on the Risk Registers is servers near Manchester to ensure all accounts. I am also very grateful to various Committees and get their ideas and challenges to the UK manufacturing the risk of disruption to our operating our data is kept within the UK) so it Past Master Michael Llewelyn-Jones for adopted so they are ready for being a base, supply chains and the economy. systems without which I wouldn’t be was straightforward to log on from my always being on hand to sign cheques future Master. The Master was assisted able to support the Master, Court and sitting room at home and continue to for the IBCT as and when we needed to by the Standing Committee Chairmen, Chairman: Guy Saxton, Liveryman, WCIB membership. I am very glad that we access our membership data, update send funds to the charities we are trying who outlined what their Committee is have been rigorous about doing this the WCIB website and keep everyone to support through this enduring crisis. doing and took questions. Speakers: over the past few years. informed about the many Company initiatives and activities members were The Master When the first Covid lockdown was involved in as lockdown progressed. announced in March the then Master In common with many 7th October – WCIB Installation (Karina Robinson), Sean Lo (who looks In addition to the CRM Sean Lo had other livery companies we Evening after our finances) and I reviewed our already moved our Company accounts This year’s Installation Evening took working practices and decided we could onto Xero, a Cloud based system, so have found new ways of place over Zoom, was very well- carry on operating the Company with he, I and our accountants could access attended by properly-attired members little disruption. it remotely. We only had one area of doing things whilst keeping from their homes, and was a great weakness which is that the accounts our traditions alive, I think success. Following a short speech by We have a powerful CRM system for the IBCT were (and still are) held the then Master on the year behind particularly of fellowship us, with some lively Q&A, and oath Aleida Moore and philanthropy. taking, there was a short speech by the then Master-elect. This was followed 22nd October – Kickstarting by a superb musical interlude given diversity and inclusion: who is the • Sir Martin Sweeting OBE Executive by students from Guildhall School of D&I agenda for? Chairman SSTL chairman Surrey As I write this piece we are just starting Music and Drama, then a speech by This unique webcast, part of Black Space Centre our second period of lockdown in Alderman and Sheriff Michael Mainelli, History Month, aimed to make the England. It is reassuring to see that so summarised on page 6 of this edition. A conversation around diversity and many members have already renewed lively discussion followed. inclusion clearer by sharing the genuine, their membership for 2020/21, are lived experiences and perspectives taking part in our various on-line events of the diverse panel. It built on the and have made or are making donations awareness of why diversity and which go to the IBCT; we have set up a inclusion is important and how it page on Virgin Money Giving to make can work in practice. Aleida Moore this even easier, search for IBCT and from the Bank of England chaired the you should find the page. Our charities session magnificently, with a superb have never needed our support as panel: Simona Paravani-Mellinghoff of much as they do now and we have all BlackRock; Kalm Paul-Christian, RBS; probably never needed each other as and John Winter, Ruxley Ventures much as we do now. Thank you for all your support for your Livery Company. 29th October – Welcome to the City • Dr Alice Bunn International Director On-line event for younger members of UK space agency (UK research) the Financial Services Group of livery companies, and prospective members, • Will Whitehorn President under the wing of the Associates UK space (trade association section of UK space Industry) and former CEO Virgin Galactic 11th November – The Financing and • Nick Shave Inmarsat Vice President Engineering of Space Technology Strategic programmes This joint event with the Engineers • Mark Boggett CEO Livery Company explored the strategic of Seraphim Capital Alderman and Sheriff Michael Mainelli significance of the space industry,

38 THE INTERNATIONAL BANKER / AUTUMN 2020 THE WORSHIPFUL COMPANY OF INTERNATIONAL BANKERS 39

WCIB – live through lockdown

EVENTS SCHEDULE INTO 2021

DATE EVENT

23RD NOVEMBER 2020 ‘CHAMPIONING THE UK’S FUTURE SUCCESS AS A GLOBAL HUB FOR FINANCIAL AND PROFESSIONAL SERVICES’ : WEBCAST WITH DAMIAN NUSSBAUM, CITY OF LONDON CORPORATION, AND SENIOR WARDEN

24TH NOVEMBER 2020 FREEDOM CEREMONY

1ST DECEMBER 2020 FINANCIAL SERVICES GROUP ANNUAL PANEL

19TH JANUARY 2021 COURT AT GOLDSMITH’S HALL

20TH JANUARY 2021 PAST MASTER INTERVIEW: JANE PLATT CBE AND ANGUS MACLENNAN

1ST FEBRUARY 2021 WCIB LIVERYMEN COMMON HALL

9TH FEBRUARY 2021 PATH TO MASTER SERIES: MENTORING AND NETWORKING

17TH FEBRUARY 2021 PAST MASTER INTERVIEW: BOB WIGLEY

SPRING 2021 WCIB SCHOOLS AWARDS CEREMONY

20TH MAY 2021 TBC 20TH ANNIVERSARY COURT AND COURT DINNER

17TH JUNE 2021 FUND RAISING DINNER AT MERCHANT TAYLORS’ HALL

14TH JULY 2021 WCIB ELECTION COURT AT IRONMONGERS HALL

30TH SEPT 2021 INSTALLATION COURT DINNER AT DRAPERS HALL

Please check website for latest information.

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