mercer, melbourne; october 17th, 2019 · the 219 edelman trust barometer. mobile: +44 (0)7501...

Mercer, Melbourne; October 17th, 2019

Welcome to

David Knox Senior PartnerMercer

on

“How can we accelerate the rebuilding of trustworthiness and confidence in

Financial Services?”

Welcome to

Andy AgathangelouFounderTransparency Task Force

on

“How can we accelerate the rebuilding of trustworthiness and confidence in

Financial Services?”

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mailto:[email protected]

[email protected]

Let’s please show our appreciation to today’s host:

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Before we go any further…


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About by numbers

• We’re not yet 5 years old; started 6th May 2015; a speech

• 1 full time member of staff - myself

• 2 part-time members of staff - Tina and Briony

• 3 operational volunteers – Sarah, Siva and Anne-Marie; more volunteers desperately wanted

• Over 850 people in our fast-growing community (500ish 1/1/2019)

• Organised and mobilised into 22 Special Interest Groups (19 themes e.g. Asset Management, Banking, Pensions, FX; plus 3 geographical areas – EMEA, Americas APAC) https://www.transparencytaskforce.org/special-interest-groups/

• 150 Ambassadors https://www.transparencytaskforce.org/ttf-ambassadors/

• We just need £100,000 a year to do what we are doing - our unique model means we are an incredibly cost-effective force for good in financial services – financial support desperately needed


https://www.transparencytaskforce.org/special-interest-groups/

https://www.transparencytaskforce.org/ttf-ambassadors/

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About

• We can be thought of as “an international movement of good people that want the financial services sector to be more transparent, truthful and trustworthy”

• We are the collaborative, campaigning community, dedicated to driving up the levels of transparency in financial services, right around the world

• We believe that higher levels of transparency are a pre-requisite for fairer, safer, more stable and more efficient markets that will deliver better value for money and better outcomes

• Furthermore, because of the correlation between transparency, truthfulness and trustworthiness, we expect our work will help to repair the reputational damage the sector has been suffering for decades


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About mission• We are an informal but increasingly influential forum of ethically-

minded people that care about the financial services sector and the people it serves

• We are collaborative, collegiate and consensus-building; focusing on solutions not blame

• We believe the financial ecosystem is profoundly important to the wellbeing of society, the global economy and political stability; but there’s a great deal wrong with it that needs reforming

➢ Our mission: “To protect consumers’ financial interests by reforming the financial services sector through harnessing the transformational power of transparency”


• Hidden and excessive costs

• Hidden and excessive risks

• Opportunistic opacity

• Opportunistic obfuscation

• Short-termism

• Insufficient client-centricity

• Scams and scandals

• Regulatory capture

• Irresponsible reward systems

• Malpractice, malfeasance, misconduct, miss-selling

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What is

• A ‘profit before principles’ mindset

• A ‘money before morals’ mindset

• Conflicts and misalignment of interest

• Excessive lending and gearing

• Disingenuous communications

• Financial instability

• Weak governance

• A lack of market integrity

• A lack of values-based leadership

working to reform?


The 219 Edelman Trust Barometer

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The key points I made on 6th May 2015 at Senate House, London University:

• The financial services sector has to be trusted to function successfully• The trust deficit is therefore a serious and systemic issue• The continuous “drip, drip, drip” of misconduct means we are becoming

de-sensitized to it and the reputational damage it causes• We are at risk of accepting the trust deficit as “business as usual”• If we tolerate what we shouldn’t we’ll start to expect it• If we expect it, we are condoning it; perpetuating the problem• The problem will not go away on its own; we should do something

➢ What should we do?


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What would it take to fix the trust deficit?• Essentially, we would need to do 4 things:

1. Bring together the right people2. Collectively embrace “the art of the possible”3. Cultivate a very strong sense of purpose about the change that is needed4. Develop a plan


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“Plan Beats No Plan”Mark Carney, 30th June 2016 at the Court Room, The Bank of England

• In the absence of any other plan; our plan is better than nothing• The more people we share the plan with:

- The better the plan will become- The better we will get at executing the plan


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To solve the problem we knew we needed to evidence that there was a problem to solve

• We produced a White Paper* to provide evidence that there is a problem • The White Paper is a meta-study of research about the Trust Deficit; its causes

and consequence

* Download it here: https://www.transparencytaskforce.org/rebuilding-trust-confidence-in-financial-services/


https://www.transparencytaskforce.org/rebuilding-trust-confidence-in-financial-services/

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“How can we accelerate the rebuilding of trustworthiness and confidence in financial services?”

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• The question is very deliberately future-orientated; we must learn from the past but not live in it – this is not about apportioning blame

• The question is very deliberately solution-orientated; we avoid the temptation to just pose the question – we want answers

• The question is very deliberately palatable to all stakeholders such as politicians, policymakers, politicians, academics, regulators, thought-leaders, subject-matter experts, progressive market participants, trade bodies and professional associations and so on

• The question is a gateway question through which dialogue can move into the many underlying causes of the trust deficit

• Managing symptoms will never solve the problem; it might even be worse than doing nothing at all


How are we developing our plan to respond to that question?

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• We are “crowd-sourcing” it

• We are meeting many stakeholders around the world

• Group meeting such as today and previous events…


Progressively-minded people want to help improve and execute the plan; they are authentically aligned with the mission

Boston 12th March 2019

New York 14th March 2019

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London 16th May20109

Dublin 29th May 2019

Amsterdam 6th June 2019

Zurich 18th March 2019

Brussels 20th June 2019


Progressively-minded people want to help improve and execute the plan; they are authentically aligned with the mission

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Washington DC September 10 2019

Boston September 12 2019

New York September 11 2019

Hong Kong October 10 2019

Sydney October 15 2019


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The Programme of events for 2019

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✓ Boston on 12th March, kindly hosted by Mercer✓ New York on 14th March, kindly hosted by Davies Ward Phillips Vineberg✓ London on 16th May, kindly hosted by Newgate Communications✓ Dublin on 29th May, kindly hosted by Azon Recruitment Group✓ Amsterdam on 6th June, kindly hosted by AON✓ Zurich on 18th June, kindly hosted by Charles Russell Speechlys✓ Brussels on 20th June, kindly hosted by CFA Institute✓ Washington DC on 10th September kindly hosted by King & Spalding✓ New York on 9th September, kindly hosted by Grant & Eisenhofer✓ Boston on 12th September, kindly hosted by First Republic Bank✓ Hong Kong on 10th October, kindly hosted by RPC✓ Sydney on 15th October, kindly hosted by Dimensional Fund Advisors• Melbourne on 17th October, kindly hosted by Mercer• Singapore on 22nd October, kindly hosted by Refinitiv• London on 5th November, kindly hosted by Duff & Phelps• Dublin on 7th November, host wanted• Amsterdam 19th November, host wanted• Paris on 20th November, host wanted• Brussels on on 21st November, host wanted• Luxembourg City on 22nd November, host wanted• Frankfurt on 10th December, kindly hosted by European Banking Federation• Zurich on on 11th December, host wanted• Geneva on 12th December, host wanted


How are we developing our plan?

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• We are “crowd-sourcing” it

• We are meeting a wide range of stakeholders around the world

• Group meeting such as today and previous events

• Plus some profoundly impactful individual meetings; such as…


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15th March 2019; meeting with Georg Kell

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• A very memorable meeting; coffee and bagels in New York• Founder of the United Nations Global Compact and a key driver behind

the UN Global Compact’s Sustainable Development Goals• I explained the overall aims and objectives of the TTF; and our idea to

bring ethically-minded people together to help tackle the trust deficit• His response was wonderfully supportive• The conversation inspired the creation of the

Finance Development Goals• Each FDG to be developed by subject-matter

experts from around the world

➢ What is your level of interest in relation to each of the 12 Finance Development Goals?


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LEADERSHIP“The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office."- Dwight D. Eisenhower

This FDG covers topics such as:

•Virtues-based and values-based leadership•Why we must deal with the "leader's dilemma" problem, to unlock the potential for major transformational change•Moral Quotient•The insights of Adam Smith's work on moral sentiments•The insights of Alexandre Havard on virtuous leadership


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CREATE A CLIENT-CENTRIC CULTURE“Ethics is knowing the difference between what you have a right to do and what is right to do.”- Potter StewartThis FDG covers topics such as:•Ethics, Values, Professionalism, Fairness•“Principle before profit” and “Morals before money”•The need for a cultural transfusion•The use of Moral Quotient•Diversity and Gender•Mandating for higher standards of conduct•The effective use of oaths, codes of conduct, standards boards and pledges•Trade Bodies and Professional Associations to realise their potential role as cultural architects•Individual, Organisational and Market Integrity•Encourage diversity of ownership structures such as Mutuals, Coops and FairShare•Why it is so important that individuals think for themselves and don’t "follow the herd" despite the potential career risk consequences of doing so•Having metrics to measure, monitor and manage trust


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HARNESS THE TRANSFORMATIONAL POWER OF TRANSPARENCY“Sunlight is the best of disinfectants; electric light the most efficient policeman”- Justice Louis Brandeis


•The need for transparency on costs & charges•The need for transparency on any risks the client may be exposed to•The need for transparency on performance metrics•The need for transparency on the agenda and motivations of actors•The development of a Global Transparency Index•Why is transparency in and of itself necessary but not sufficient?•What are the limitations and potential pitfalls of having too much of "the wrong type of transparency” and “unconstrained standardisation”?•Decision-making being underpinned by relevent and reliable data•Benchmarks and indices being free of bias and distortion•Credit Rating Agencies being fit for purpose


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HARNESS THE TRANSFORMATIONAL POWER OF TECHNOLOGY“Computers are useless. They can only give you answers.”- Pablo Picasso


•How “technology is a friend of transparency” and why it should be fully utilised•Harnessing the inherent advantages and efficiencies provided by technology •The enormous potential for Fintech, Blockchain, Smart Contracts, AI, greater Interoperability and evolutions thereof to radically improve the integrity of the system•The scope for technology to reduce operating friction and the sector's higher-than necessary costs, thereby protecting consumers from excessive friction costs that worsen outcomes e.g. they corrode investment returns•Making good use of technology to provide person-specific data; for example, through data dashboards dealing with pensions and investments contextualised with individual-specific planning goals•The potential risks of over-reliance on technology and inadvertently absorbing systemic risks into the ecosystem; particularly through inadequate cyber security


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GOVERNANCE“Good governance is the art of putting wise thought into prudent action in a way that advances the well-being of those governed.”- Diane Kalen-Sukra


•Compliance•Regulatory reform•Firm and consistent enforcement of the rules; with adverse publicity for rule-breakers, thereby creating an effective deterrent•The vital role of effective accounting, auditing, financial reporting and credit rating•Custodianship•Stewardship of capital; such that the world's capital markets can operate as a force for good•Encouraging greater inclusion and diversity•Developing an “International Regulatory Master Plan”


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GOOD PRODUCT DESIGN“Good design is like a refrigerator—when it works, no one notices, but when it doesn’t, it sure stinks.”- Irene Au


•Products to be engineered to a high standard•Products to be fit for purpose•Products to be free of fundamental flaws•Product Accreditation•Transparency Accreditation•Providing value for money


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AUTHENTIC COMMUNICATION“The single biggest problem in communication is the illusion that it has taken place.”- George Bernard Shaw


•Presenting data and information clearly and intelligibly•Encouraging greater consumer engagement wherever possible•Seek to minimise the amplification of adverse publicity through active PR and Reputation Management•Asymmetries of information to be minimised•Use of Simple Benefit Statements•Asymmetries of information to be minimised•Use of Simple Benefit Statements•Communicating with integrity, credibility and authenticity


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ACT WITH PURPOSEFULNESS"When you are inspired by some great purpose, some extraordinary projects, all your thoughts break their bonds; your mind transcends limitations; your consciousness expands in every direction; and you find yourself in a great new and wonderful world. Dormant forces, faculties and talents become alive and you discover yourself to be a greater person by far than you ever dreamed yourself to be."- Patanjali


•Impact Investing•Sustainability•Climate Change•ESG•Socially Responsible Investing•Social Finance•Social Stock Exchanges


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RESPONSIBLE INCENTIVES“Show me the incentives and I’ll show you the outcome"- Charlie Munger, Berkshire Hathaway


•Responsible Reward•Fully account for human nature and “what’s in it for me?” mindsets•Manage out conflicts of interest where possible; fully disclose where not•Alignment of Interests; dealing with the “Principal-Agent Problem."•Use fee and payment structures that align interests wherever possible•Alignment of goals, returns and risks•Adopt Fiduciary Duty, Duty of Care and Best Interests thinking


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FINANCIAL STABILITY“Remember when nurses, carers, teachers and students crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? No, me neither.”- Fuad Alakbarov


•Minimising the risk of systemic market failures that lead to severe shocks to the system


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CONSUMER PROTECTION “To not do what you can to protect someone, that's cowardly.”- Jodi Lynn Anderson


•Minimise the risk of fraud and scams•Properly support and care for those that have been scammed•Be alert to policy failures that risk harming consumers - pension freedoms•Financial Consumers' Bill of Rights•Use litigation to provide redress and proactively drive changes in market practice•Encourage and facilitate worry-free whistleblowing•Safeguard data integrity; develop resilient and robust Cyber Security•Get the administration right - strive for operational and administrative excellence•Proactively seek to repair damage when it is done; problems will inevitably arise; and mistakes will inevitably happen•The vital role that can be played by more and better financial education to boost financial literacy for consumers, mitigate the risks associated with asymmetries of information and help prevent miss-selling to the vulnerable


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RISK MANAGEMENT“Not taking risks one doesn't understand is often the best form of risk management"- Raghuram G. Rajan


•The need for transparency on any risks the client may be exposed to•The need for transparency on performance metrics•The need for transparency on the agenda and motivations of actors


We need to think of the 12 FDGs together

• Dealing with just the 12 individual “heads” of the problem won’t work• If we just “chopped off” individual heads they will just “grow back”• Our approach needs to be comprehensive, macro, big picture• We need a whole-system solution to fix a whole-system problem• The solution needs to be systemic and systematic• If you can’t relate to 12-headed monsters; think about a bucket of water

with 12 holes in the bottom – you need to fix all the holes (or you might run the risk of people demanding that the bucket be replaced with a new one; a whole new order)

• Doing what needs to be done is going to take a sustained effort; we will need to build momentum….



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4 main ways we will build momentum:

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#1 We will run 1 annual symposium a year in each City x 20; each one bigger and better than the one before (20 to 100 over the next 15 years?)

#2 We are going to be creating a Global Network of TTF Chapters- 8 Chapter Leaders, operating as 4 pairs- Each pair responsible for 1 meeting a year; 4 quarterly meetings a year- Meetings at breakfast, lunch or early evening- Marketing by TTF UK (+local help)- Purpose: TTF’s Strategy for Driving Change “Passion/Purpose +

Power/Position”- Must always remain “true to mission” - robust governance framework - “Like a franchise but without a profit motive; the motive is the cause; a

cause which is both noble and necessary”

#3 Quarterly Zoom Calls for EMEA, APAC, Americas + 18 Special Interest Gps

#4 Each May; New Edition of “The book that is much more than just a book”


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Comments?

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Questions?

Ideas?

3 minute comfort break



David Knox, Senior Partner, Mercer Melbourne; Ambassador of the Transparency Task Force


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We restart at 11:30

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Refreshments & Networking


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Title: “Rebuilding Trust and Confidence in Financial Service”…why we need to do it; and how we can

• A new edition each year

• Edition #1; May 2020 (coinciding with a major meeting in London)

• Sponsors wanted please!

“The book that is much more than just a book”


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Chapter 1: Executive summary


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Chapter 2: strategy for driving change

• Which is all about bringing together the thinking of two very important groups:

- #1, those with a sense of passion & purpose about what needs to change, such as our Ambassadors and the members of our Special Interest Groups- #2, those with the power & position to make change happen; such as

the politicians, policymakers, regulators, leaders of key trade bodies and professional associations, leaders of key commercial organisations etc.

We already do this in many ways including through our Special Events; here are three good examples of our Special Events:


‘The First Transparency Strategy Summit in the World’

‘The primary purpose of the first Transparency Strategy Summit in the world is to begin to build consensus on the best way to protect the interests of the UK’s pensions-saving public through full disclosure on all the costs and charges they are paying but not being told about’.

• 12th September 2016 at the Houses of Parliament

(one of 3 special meetings I’ve led at the House of Commons)

……which may have led to the opening of the Work & Pensions Select Committee’s Enquiry on Pensions Costs Transparency

5th Sept 2018 at the Commons:

x 110 (99 in the UK+ 11 overseas)13th Jan 2017

‘Launch of the TTF Banking Team’s White Paper on Current Accounts’

• 26th June 2017 at the Houses of Parliament

‘Sensible recommendations about the lack of transparency around charges for Free-If-In-Credit personal current accounts’

“Ideas to help reduce the chance of another Global Financial Crisis”

• 7th February 2018 at the Houses of Parliament

‘A special meeting at which we presented our White Paper on the topic and initiated the launch of a new All Party Parliamentary Group on Financial Stability’; the inaugural meeting is on 23rd May

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Chapter 3: The 1,000 VIPs

• We will refer to the 1,000 most influential people in the world’s financial ecosystem; they will be listed in the Appendix

• These individuals are the “power and position” group for whom the book has been especially written; they will be told that

• The book is a clarion call for engagement to that group; we will be reaching out to each one

• The process of outreach is happening already and it is working

• The more engagement we get the easier it will become to get more engagement

• There will be a “tipping point dynamic”


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Chapter 4 - The Problem Statement

The Problem Statement will give an Evidence-Based account of:

- What the Trust Deficit is- Why it is like “a festering sore on the face of financial services” that

desperately needs treating- Its causes and consequences

Virtually 80% of Chapter 4 has already been written; we will be repurposing the White Paper written with Newgate Communications


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Chapter 5 - The Vision Statement

The Vision Statement is where we

- “Dare to dream” of having a transparent, truthful and trustworthy financial services sector

- Articulate a deliberately utopian view that will help us envision what it will mean for society if trust and confidence in financial services was restored

- Showing the contrast/compare between the Problem Statement and the Vision Statement will give the book a natural sense of direction


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Chapters 6 to 17; each dedicated to a Finance Development Goal

- Each of these FDG Chapters will be a collection of of thought-leadership essays written by relevent subject-matter experts mostly drawn from the TTF Ambassadors Each of their essays will be a response to an FDG-specific question:“How can we accelerate the rebuilding of trustworthiness and confidence in financial services through…better leadership?”…cultural reform?”…harnessing the power of transparency?”…harnessing the transformational power of technology?”…better governance?”…better product design?”…communicating authentically?”…greater purposefulness?”…intelligent incentives?”…stabilising the financial ecosystem?”…better consumer protection?”…better management of risk?”


Subject Matter Experts so far

First Name Surname Job Title Organisation FDG

Carol Nolan Drake President and CEO Carlow ConsultingGovernance

Chris Tobe Founder Stable Value ConsultantsTransparency

Darby Hobbs Founder Conscious CapitalismPurposefulness

Ian McDonald Founder Integral Business CentreLeadership

Jeff Mamorsky Co-Chairman Greenberg Traurig

Jon Lukomnik Founder Sterling Capital

Larry Bates Founder The Wealth GameTransparency

Laurence Wormald Investment Manager Random PerformanceRisk

Marcin ZabaInvestor Relations Manager SyndicateRoom

Communications

Mark Turner Managing Director Duff & PhelpsGovernance

Matthew Priestley

Head of Investment Management Oversight FundRock Partners

Meredith Gibson Principal Meredith Gibson AdvisoryCommunications

Nicholas Morris Adjunct ProfessorUniversity of New South Wales

Governance

Subject Matter Experts so far, continued


Paul MoxeyProfessor of Corporate Governance

London South Bank University

Governance

Paul Bates Founder Bates Barristers

Consumer Protection

Peter Schmid Managing Partner Iamdix

Piotr Konwick Senior LecturerUniversity of Hertfordshire

Rob Lake Founder Authentic InvestorPurposefulness

Robert Van Beek Founder About Life & Finance

Ruth Steinholtz Managing Partner AreteWork Culture

Simon Grover Lead Writer QuietroomCommunication

Sue LewisIndependent Board Member

Financial Services Consumer Consultant

Consumer Protection

Sue Jaffer

Sunil Chadda Managing Director Cairn ConsultingTransparency

Tamar Joulia-Paris Managing Director TJ Capital



Andrew Mills Director Insight Financial Research

Darby Hobbs Founder Conscious CapitalismPurposefulness

Graham Boyd CEO & Founder EvolutesixPurposefulness

Justin O'Brien Director The Trust Project

Susan Cuff Director Cuff AssociatesCulture

Robert Dellner Managing Director I3 Partners

Risk Management

Dan Brocklebank Director, UK Orbis InvestmentsIncentives

Sheri Markose Professor of Economics Essex UniversityFinancial Stability

Prabhu Guptara Executive Director Relational Analytics

John Hewson ProfessorCrawford School of Public Policy

Governance

William Jannace Senior Counsel Ross PLLC

Rohanna Wise Founder & CEO Wise Trading Technologies

Subject Matter Experts so far, continuedFirst Name Surname Job Title Organisation FDG

Thom Young President FARcapitalIncentives

Michael Erlanger Co-Founder GoKnownTechnology

Shann Turnbull PrincipalInternational Institute of Governance

Governance

Paolo Sironi Industry AcademyWatson Financial Services, IBM

Transparency

Guy Spier CEO Aquamarine CapitalIncentives

Willi Brammertz Managing Director AriadneTransparency

Allan MendelowitzActus Research Foundation

Transparency

Markus Krebsz Member

United Nations’ Group of Experts on Risk Management in Regulatory Systems

Risk Management

Cliff Southcombe Managing DirectorSocial Enterprise International

Purposefulness

Rory Ridley-Duff Co-Founder Fairshares AssociationPurposefulness

Liz MurphySteering Group Member UK Values Alliance

Culture

Kara Tan Bhala President & FounderSeven Pillars Institute for Global Ethics & Finance

Culture



David M. Rowe PresidentDavid M. Rowe Risk Advisory

Risk Management

Stefan Pagacik Co-Founder AI 4 Impact

Consumer Protection

Roger Miles Head of FacultyHead of Conduct and Academy

Pascal Hogenboom Associate Director Strategia WorldwideLeadership

Jeff Mamorsky Co-Chairman Greenberg TraurigLeadership

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Chapters 6 to 17; continued

- Each of these FDG chapters will also have a set of Formal Recommendations written collaboratively by members of The Scientific Committee; addressed to the 1,000 VIPs

- The Scientific Committee will be made up of highly credible academics and renowned experts from around the world

- They will be a “Dream Team,” too credible to be ignored; and they will also be mostly sourced from the fast-growing community of Transparency Task Force Ambassadors…


Scientific Committee so far


Professor Anna TilbaAssociate Professor in Strategy & Governance

Durham University Business School

Financial Stability

Professor Andreas HoepnerProfessor of Risk Management & Data Science University College Dublin

Risk Management

Dr. Krzysztzof Grabowski Lecturer in Corporate Governance Kozminski UniversityGovernance

Professor John Wilson Pro-Vice Chancellor Newcastle University

Laurence Wormald Investment Manager Random Performance

Martin Rich Co-Founder & Executive Director Future Fit Foundation

Dr. Nicholas Morris Adjunct ProfessorUniversity of New South Wales

Professor Paul Moxey Professor of Corporate GovernanceLondon South Bank University

Professor David Webber Professor of Law Boston University

Dr. Shann Turnbull PrincipalInternational Institute of Governance

Governance

Dr. Piotr Konwicki Senior Lecturer University of Hertfordshire

Professor Tamar Joulia-Paris Managing Director TJ Capital

Scientific Committee continuedFirst Name Surname Job Title Organisation FDG

Professor Sheri Markose Professor of Economics Essex Univursity

Financial Stability

Dr. Ashby Monk Executive and Research DirectorStanford Global Projects Center

Transparency

Professor Michael Mainelli Executive Chairman Z/Yen Group

Andrew Mills Director Insight Financial Research

Raphael DouadySpecializing in Data Science, Financial Mathematics and Chaos Theory

University of Paris I-Panthéon-Sorbonne

Professor Justin O’Brien Director The Trust Project

Graham Boyd CEO & Founder Evolutesix

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Chapter 18: Conclusion

• New input wanted from existing subject-matter experts

• New subject matter experts invited to input

• The 1,000 VIPs invited to respond to the Formal Recommendations they have been given; the readers become the writers over time

• Invitation for suggestions for new additions to the 1,000 VIPs

• We will refresh the 1,000 VIPs each year; selecting out those that have not engaged and replacing them with those that do

• There will only ever be 1,000 people in the 1,000 VIPs


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Chapter 19: Thanks and recognition

• All contributions duly recognised and fully attributed• The book will be seen to be a team effort because that’s exactly what

the whole initiative is• We will be fully recognising all support given whether that be by way of

written content, operational support, project management support, technical input, sponsorship, guidance and so on

• We will be showing names, logos, websites and so on


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We aim for the book to be highly impactful

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• The people involved with the book will be a dream-team of experts• The book will be too credible and too compelling to be ignored• It will articulate good, Evidence-Based ideas; and it will explain precisely

who needs to do what to turn those ideas into reality• Each year there will be an updated edition with a refreshed set of

recommendations• We will be able to shine a bright light on who has done what in response to

the actions recommended by the Scientific Committee• If they wish, the 1,000 named individuals will be able to report on actions

taken and progress made since the previous edition• Over time, we hope and expect more and more of the 1,000 to become

increasingly involved in this initiative• The book will work like having a sat-nav for finance reform, always asking:

- Where are we?- Where do we want to get to? - How are we going to get there?



Dr Nicholas Morris, Adjunct Professor, Latrobe Law School; Visiting Fellow, The Martin School, Oxford; Adjunct Professor, University of New South Wales; Principal, Tasman Economics; former CEO, London Economics

Sue Jaffer, Senior Researcher, Latrobe Law School; Associate at ACIL Allen


CRICOS Provider 00115M

Rebuilding Trustworthiness in Financial Services

Sue Jaffer and Nicholas MorrisMelbourne 17th October 2019

Agenda

The Importance of Trust

Learning from History

• Why has the financial industry lost trust and respect?

• Why did regulation fail to prevent this?

What Next?

• Fixing the problems

Why Trust is crucial to Financial Services

Financial services is a trust-intensive industry

• Uncertain, long-term returns with asymmetry of information

• Customers cannot assess quality of products, unable/unwilling to read detail

• So need to believe promises/contracts will be honoured and agents will respect duties

• Incentives for managers to increase remuneration

• By creating products with tail risk and apparently high returns

• Excessive leverage generated unforeseen risks prior to the GFC

• Social consequences of the GFC were dire in UK and Europe

• Impact on smaller businesses and the vulnerable

• Taxpayers picked up the tab, extra million unemployed in UK

Our Book ‘Capital Failure: Rebuilding Trust in Financial Services’

Our claim is that self-interested, selfish motivations are not sufficient.

They only create what we call weak trust.• Agents/institutions with such motivations may not be trustworthy, even if they

promise not to behave badly. ⁻ Risk of cheating if unlikely to be detected.

⁻ Things will always turn out in unexpectedly different ways.

Strong trust is needed for a sustainable economic system.• This requires the other-regarding motivations emphasised by Adam Smith.

⁻ Repeated games are not enough.

⁻ Altruism, or at least the desire for approbation or esteem, is necessary.

⁻ Procedural motivations can sometimes give rise to the same outcome.

‘Framing’ can support strong trust and improve culture. • Some activities (eg. selling ice cream) only need weak trust

• But many, for example doctors and fund managers, do need to be trustworthy, because their patients and clients need to be able to rely on them in the longer term.

Trust was eroded, and bad behaviour grew….

• Western economies used to rely heavily on trust and reputation.

• However economists came to believe that markets will automatically produce good outcomes even if individuals and companies behave entirely in their own self-interest.

• The result was extensive deregulation of financial markets and a weakening of traditional legal protections. This encouraged untrustworthy behaviour.

• Steep rises in remuneration attracted managers with a different ethical outlook to the financial sector, and many companies behaved badly.

• Corporate scandals in US: Arthur Andersen, Enron, Health South, Merrill Lynch, Sears Roebuck, Tyco, and WorldCom.

• Global Financial Crisis: Lehmans, Goldman Sachs ABACUS; LIBOR manipulation; major losses at Barings, Societe Generale, Royal Bank of Scotland etc.; Greek and Euro crisis.

• Australia was also affected: Westpoint, Storm Financial, Opes Prime, sale of CDOs to Local Government pension funds. Also recent problems in Japan: Olympus, Toshiba and Germany: Volkswagen, Porsche.

…..because we misunderstood Adam Smith

Misplaced faith in the efficient market hypothesis allowed untrustworthy behaviour to go unchecked.

• Often justified by Adam Smith’s ‘Invisible Hand’.

But in fact Adam Smith believed strongly in the importance of ‘other regarding motivations’:

• “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”

• Theory of Moral Sentiments, 1759.

‘Other-regarding’ motivations include desire for esteem, for the approbation of others, and genuine concern for the well-being of others (i.e. altruism).

• This idea is important, as harnessing these motivations provides a valuable constraint on the unbridled operation of markets.

Why has regulation failed to fix the problems?

1. Ideas: The ‘new orthodoxy’ has been that competitive markets with light-handed regulation are the best way to generate growth and wealth. Self-interest is supposed to lead to public good, but often doesn’t.

2. Complexity: Administrative controls and rules cannot keep up with the ever-changing landscape.

3. Politics: Lobbying, political pressure, regulatory capture, the ‘money oligarchy’, etc….

And, of course,

4. Lack of Transparency: failure to enforce disclosure, consumer apathy, misleading claims about products

What Next? We think behavioural change is essential because:

• Caveat Emptor is only adequate with full disclosure and complete understanding – which often doesn’t exist

• Most financial products involve an ongoing relationship between seller and buyer, and many are very complex – which means some basis of trust is needed

• Intermediation and complex financial institutions often prevent trust relationships from developing, with many ‘degrees of separation’.

• External certification is difficult - and the ratings agencies have not performed. Branding doesn’t work well in this industry.

• Risk transference to those who understand risk least, with long term effects, for example in superannuation.

• Hence the seller/agent needs to have some kind of duty to protect the interests of the client

Fixing the Problems

Capital Failure set out a four-step implementation strategy designed to promote competence, truth-telling and promise-keeping.

The components of this strategy are:

(1) the appropriate definition of obligations;

(2) the identification of corresponding responsibilities;

(3) the creation of mechanisms for carrying out and enforcing responsibilities

(4) the holding to account of those involved, in an appropriate manner.

Law makers, regulators and consumers need to know who is competent, and the way in which it matters that the truth is told and that promises are kept.

Tools available to encourage trustworthy behaviour

• Law – through enforcement of fiduciary duties, and duties of care enshrined in public and private law

• Competition policy – to prevent dominance, collusion and exercise of market power by incumbents

• Regulation – caps on returns; product prohibition; safety and technical regulations; conduct of business rules; pro-active encouragement of efficiency; explicit protection of the vulnerable; public service obligations

• But historically these have not been effective, or have not been utilised effectively

• And this includes the disclosure regime in Australia!

The Landscape of Possible Reponses

Appropriate

behaviour towards

clients

Motivation, approbation and

esteem

Trust,

shame, peer

pressure

Economics of contracts and markets

Incentives

History of previous crises and failures

Policy

guidance,

accountability

Regulation , competition policy, professional

standards

Compliance

Penalties,

information,

standards,

accounting

Public debate,

morality

Law: fiduciary duties and duties of care

Codes of

practice

Can technology help?

Obligations

Responsibilities

Mechanisms

Holding to Account

Mapping of legal and regulatory requirements to products and servicesMonitoring and policing of conflicts of interestEnsuring algorithms are designed to reflect obligationsEducating trustees, managers, board members about their obligations

Regtech and complianceSuptech and risk control, including for high-frequency tradingClarity on interface between staff and technology – who does what?

Providing clear information, including on costs, to facilitate choiceImproving transparency and reducing effects of asymmetric informationEnsuring algorithms produce ethical outcomesFacilitating new competition – P2P lending, crowdfunding, use of mobiles, branchless banking, benchmarking

Automation of compliance enforcementPrivacy and data protection, mitigation of incidental risksEthical remuneration and promotion systemsPublicity about bad behaviourImplementation of penalties

Thank you

[email protected]: +44 (0)7501 460308

Suggestions for “The 1,000 VIPs”

• Politicians?• Policymakers?• Regulators?• Leaders of relevant Trade Bodies?• Leaders of relevant Professional Associations• Bankers; including leaders of the Central Banks• International organisations such as the OECD, WEF, IMF, UN Global

Compact• Leaders of large and powerful commercial organisations• Others…



Peter Hanlon, Principal Advisor, Financial Institutions and Management; Financial Controller, QT Power Ltd; former General Manager of Group Non Traded Market Risk, National Australia Bank, Melbourne; former Head of Independent Risk Oversight, National Australia Bank, Europe


RESTORING TRUSTWORTHINESS WITHIN THE FINANCIAL SYSTEM

EMBEDDING CORPORATE VALUES INTO THE CONDUCT

OF BUSINESS

PETER HANLON

F.I.M.A

EMBEDDING CORPORATE VALUES –IT’S PERSONAL

VALUES AND BEHAVIOURS ARE INCULCATED WITHIN PEOPLE AND ORGANISATIONS – EXTERNAL LOBBYISTS, CONSUMERORGANISATIONS, ADVISORS AND SUPERVISORS CAN ONLY ADVOCATE AND CONSTRAIN

PROFESSED VALUES AND BEHAVIOURS PROLIFERATE ACROSS THE CORPORATE WORLD – TALK THE TALK V WALK THEWALK

HAYNE UNEQUIVOCAL “ PRIMARY RESPONSIBILITY TO MAINTAIN TRUSTWORTHINESS LIES WITH BOARDS AND SENIORMANAGEMENT WHILE DEMANDING CONSIDERATION OF MORE THAN FINANCIAL RETURNS “

BEYOND FINANCIAL SERVICES – REMUNERATION AND REWARD STRUCTURES, EMPLOYMENT PRACTICES, CUSTOMEREXPLOITATION, ENVIRONMENTAL COMMITMENT

EMBEDDING CORPORATE VALUES –HOW DID WE GET HERE

•

•

•

•

•

•

• BLINDSIDED BOARDS – NO LINE OF SIGHT TO DIRECT AND EVIDENCE PRACTICE V PROFESSED VALUES –REPORTING ON PRODUCT, SERVICES, DISTRIBUTION CHANNELS

• ESG REPORTING A SHORT-TERM RESPONSE

78

EMBEDDING CORPORATE VALUES –WHAT’S TO BE DONE

• POST HAYNE PUSHBACK – NO PLACE FOR SOCIAL OBLIGATIONS, OVERBURDENING REGULATION, INTRUSION ON

MANAGEMENT – PHALANX OF COMPLIANCE OFFICERS, EXTERNAL ADVISERS

• THE STARTING POINT –A STANDARD OF “IF IT’S LEGAL, WE’LL DO IT” IS DISCARDED, AND “ DOING THE RIGHT

THING” EMBRACED OR REJECTED I.E. BEYOND COMPANIES ACTS LEGISLATION

• WHAT THAT REPRESENTS HAS TO BE ARTICULATED; IF NOT , THERE CAN BE NO CONSTRUCT OF AN EFFECTIVE

CORPORATE INTEGRITY RISK CAPABILITY TO DIRECT, MONITOR, REPORT AND OVERSEE

PATHWAY TO GET THERE

•

•

79

EMBEDDING CORPORATE VALUES –HOW DOES IT WORK

CUSTOMERS - “HONEST, FAIR, INDEPENDENT SERVICING, EVIDENCED IN THEIR BEST INTEREST, WHEN ENGAGING WITH

THE ENTERPRISE, COMPLEMENTED BY TIMELY, EFFECTIVE REMEDIATION IN THE EVENT OF FAILURE.”

80

EMBEDDING CORPORATE VALUES -A NEW FRONTIER V A BRAVE NEW WORLD

•

•

•

•

•

• EMBEDS “DOING THE RIGHT THING “ FOR EACH INSTITUTION

81

EMBEDDING CORPORATE VALUES –WHAT’S NEXT ?

•

•

•

82


Denis Kilroy, Managing Director, KBA Consultancy


The Transparency Taskforce

Introducing the BASOS Initiative

October 2019

BASOSBusiness Acting in Service of all Stakeholders

What is BASOS …

▪ Business Acting in Service of all Stakeholders

▪ Exists to provide understanding, tools and capabilities necessary for businesses to deliver a sustainable level of ongoing wealth creation, in ways that enhance wellbeing for all stakeholders

▪ Outcome of 25-year development effort from late 1994, ‘bookended’ by 7-year research program completed in 2018

▪ Initial findings in book published by Palgrave Macmillan in 2017

▪ Two aspects: philosophical and economic

▪ Potential successor to Shareholder Primacy Paradigm

18 October, 2019 ©The KBA Consulting Group 85

Customer Value, Shareholder Wealth, Community Wellbeing[Palgrave Macmillan 2017]

https://www.springer.com/gp/book/9783319547732?wt_mc=Affiliate.CommissionJunction.Authors.3.EPR1089.DeepLink&utm_medium=affiliate&utm_source=commission_junction_authors&utm_campaign=3_nsn6445_deeplink_PID8433885&utm_content=deeplink

https://www.springer.com/gp/book/9783319547732?wt_mc=Affiliate.CommissionJunction.Authors.3.EPR1089.DeepLink&utm_medium=affiliate&utm_source=commission_junction_authors&utm_campaign=3_nsn6445_deeplink_PID8433885&utm_content=deeplink

What is the Purpose of Business

▪ Being in business is an opportunity to create wealth by being of service to society

▪ Being in business should not be an opportunity to appropriate wealth in the name of shareholders, at the expense of non-shareholder stakeholders

▪ Key to the second of five main philosophical outcomes which in combination, provide a comprehensive underpinning for an emerging purpose-centric business paradigm


It is crucial to understand the difference between wealth creation and wealth appropriation

Finding 1: Focus on Building an Enduring Institution

Even from the perspective of a shareholder, the economic objective should not be to maximise shareholder value or even enhance shareholder wealth per se

▪ The economic objective of the leaders of a listed company should be to build an enduring institution that:

• Creates real value for its customers

• Delivers a sustainable level of ongoing wealth creation for its shareholders

• Does both in ways that enhance the wellbeing of everyone and everything involved

▪ There is a lot more to this than is immediately apparent

• The way a company journeys towards this goal is just as important as eventually getting there

• This is because if pursued with integrity, the journey and the destination become one

• The way a company goes about creating customer value and building shareholder wealth effectively determines its ability to continue to do so on an ongoing basis


Finding 2: Choose to Create Wealth not Appropriate Wealth

Whether consciously or not all companies make a choice between two alternative paths: the path of wealth creation and the path of wealth appropriation

▪ In most cases, this is an entirely unconscious choice. But we need to make it a conscious choice. When we do, Boards can choose to ‘build in’ good behaviour rather than regulators having to ‘inspect out’ poor behaviour

▪ Only the path of wealth creation is sustainable. Wealth appropriating behaviour is a a facet of short-termism and constitutes a form of exploitation

▪ True wealth creation flows from a noble intent or purpose that goes beyond trying to enhance the wealth of existing shareholders

• Business outcomes can range from positive to negative irrespective of intent

• But with intent itself, the situation is black or white. There are no shades of grey

• Crucial factor is whether setting out to create real or artificial value for customers, together with level of concern for other non-shareholder stakeholders


Finding 3: Must Use Economic Measures – not accounting ones

Only with economic measures can we observe how the financial performance produced by management

in the market for their company’s products and services, translates into the capital market outcomes experienced by shareholders

▪ When we understand the dynamics of this link, it become apparent that seeking explicitly to enhance the wellbeing of non-shareholder stakeholders is a benefit for businesses and their shareholders, not a burden

▪ Crucial problem is that it is not possible to understand how wealth is really created in listed companies by relying on accounting metrics

▪ Accounting metrics like Earnings, EPS and EPS growth, are incomplete measures of management performance

• There is a widely held but nonetheless misguided belief that enhancing short-term Earnings and EPS will tend to create shareholder wealth. This is not true

• Instead, their use can lead to a situation where non-shareholder stakeholders are regarded as adversaries in the pursuit of higher profits over the short-term, rather than as allies in the creation of wealth over the long term


Finding 4: Focus on Long Term, Not the Short Term

Contrary to widespread belief, top performing companies generally don’t beat short-term financial performance expectations – despite enormous pressure to do so from the business press

▪ Top performing companies create wealth through innovation and capability creation. They do this steadily, year after year, with what seems to be a clear focus on the longer term. They don’t ‘shoot the lights out’

▪ Over the short term, they tend to meet or slightly underperform market expectations. But they more than offset that through innovation and capability creation, leading to the establishment of new and higher expectations, which they then deliver over time

▪ It is rare for top performing companies to outperform short-term expectations. Apple Inc. is one of the few that does. It is particularly rare for them to do it continually

▪ Importantly … the longer the timeframe, the more the interests of all stakeholders align

▪ Once again, we can only see these truths when using economic measures

• Economic Profit (EP) and Economic Profitability (ROE-Ke) in the product and services market

• Wealth Creation (TSR-Ke) in the capital market


Finding 5: More is Not Always Better

There appears to be an optimal level of economic profitability (ROE-Ke) that is sustainable in the product

and services market; and an optimal level of ongoing wealth creation (TSR-Ke) that is sustainable in the capital market

▪ Seeking to outperform these sustainable level of economic performance can be counterproductive

▪ So can the use of relative performance measures like relative TSR – which are generally expressed in percentile rankings in order to encourage outperformance

▪ Such measures dominate the way we reward executives and fund managers. But they are not consistent with the way wealth is created

▪ Worse than that, their use can promote wealth appropriating behaviour in the product and services market as we saw in the Banking Royal Commission, and tends to encourage volatility in the capital markets

▪ Both these phenomena tend to benefit the few at the expense of the many, and the many always includes lots of superannuation and pension fund members


How Weath is Created in Top Performers: CSL Limited

CSL Limited created a great deal of wealth over the three years to June 2018. But it all came from establishing new EP expectations. It did not come from outperforming existing EP expectations

$0.8b reduction in shareholder wealth by failing to meet EP expectations in place on 30 June 2015

$43.0b enhancement to shareholder wealth by establishing new EP expectations to be delivered beyond June 2018

30 June 2015

30 June 2018

Pair of EP Bow Waves for CSL Limited – 30 June 2015 to 30 June 2018


It’s All About the Long Term: Wealth Creation in NYSE Top 100


2017-18

2015-18

2013-18

2008-18

Underperformed Expectations over One Year Slightly Underperformed Expectations over Three

Years

Just Met Expectations over Five Years Exceeded Expectations over Ten

Years

Sources of Wealth Creation

Wealth Created by Outperforming Expectations (97,828)

Wealth Created by Establishing New Expectations 696,609

Total Wealth Creation 598,781


Wealth Created by Outperforming Expectations (38,914)

Wealth Created by Establishing New Expectations 2,354,565

Total Wealth Creation 2,315,651


Wealth Created by Outperforming Expectations 35,071




Wealth Created by Outperforming Expectations 208,248



Australian vs US Companies: Some Important Differences

Australia’s top innovators are different to the exemplars in the US. US companies are faster to translate

innovation into an increase in delivered economic profits

Companies like CSL and Cochlear ‘destroy wealth’ by failing to meet market expectations on left-hand side of Pair of EP Bow Waves.

But they more that offset this by creating new and higher EP expectations on right-hand side (to be delivered in the future). Apple and other US tech companies are able to translate new expectations into delivered performance much quicker


Pair of EP Bow Waves for Apple Inc over Ten Years (2008-18)

79.0% of total wealth created stemmed from establishing new EP expectations – largely through innovation. Over ten years, the level of embedded expectations expanded significantly. But there was also time for it to transition to a delivered EP stream

Relatively high level of wealth created by delivering EP in excess of expectations over a ten-year measurement period(21.0% of total wealth created)

EP Expectations set in 2008 not met until 2018. This destroyed $1,585m in shareholder wealth

Pair of EP Bow Waves for Cochlear Limited over Ten Years (2008-18)

$8,146m in wealth created from establishing new EP expectations –giving net wealth creation of $6,561m

Expectations vs Delivered Performance: Different Markets

Note. 100* comprises the 100 largest companies listed on each stock exchange for at least 10 years, excluding resource and financial services companies (to improve comparability between exchanges)

EEA Index means Embedded Expectations Achievability Index

18 October, 2019 ©The KBA Consulting Group

ASX 100*

NYSE 100*

LSE 100*

EEA Inde

x

43 52 57 71 68 69 84 97 101 110 117 103 117 114 111 114 120 113

EEA Inde

x

40 51 64 71 74 66 95 99 100 106 110 104 98 98 95 84 78 45

EEA Inde

x

78 88 86 89 90 75 91 117 102 92 88 81 79 79 79 79 83 88

• Although performance is improving, ASX 100* companies are much less economically profitable than NYSE 100* and LSE 100*

• Material gap has existed since GFC between embedded EP expectations and EP actually being delivered in ASX 100* companies

• It was there before the GFC as well. Relationship only inverted at the peak of the GFC

• Average Economic Profitability of 10 per cent is high and stable in US companies

• Material gap opening up between embedded EP expectations and EP actually being delivered – due largely to impact of ‘digital monopolies’

• Embedded expectations stable at 5 per cent in UK. Performance delivered has been improving and now matches US

EEA Index by Company: Intel, Netflix and CSL Limited

CSL Limited

Intel Corp

Netflix Inc

Significant differences between companies…

96

0 10 0 21 28 47 29 80 57 82 99 140 121 89 103 104 80 103EEAIndex

0 10 0 21 28 47 29 80 57 82 99 140 121 89 103 104 80 103EEAIndex

n/a n/a 0 61 25 67 60 52 0 0 110 68 0 0 0 0 0 0

▪ EP expectations were well above delivery for Intel at time of Dot.Com Boom. Now in alignment at ROE-Ke = 10%

▪ NetFlix had a 70 percentage point difference between expected and delivered economic profitability (ROE-Ke) in December 2018. Gap would have closed with recent drop in share price

▪ CSL is a phenomenal performer in both product and service market (ROE-Ke = 50%) and capital market. But market is demanding more

EEA Indices by Market

ASX 100* NYSE 100* LSE 100*

A different mix of companies in each market … and will be available daily in 2020

97

Importance of TransparencyOur work suggests there are many benefits to having a capital market that exists primarily to fund sound and sustainable economic endeavour

▪ This demands a situation where …

• Market values track fundamentals, perhaps with Boards playing a role in helping ensure this is the case

and

• There is a minimum of volatility

▪ This will only be possible if there is transparency in relation to both the performance and the prospects of individual companies

▪ This will lead to greater trust and less opportunities for the few to appropriate wealth at the expense of the many

▪ We are not there yet. But movements like The Transparency Taskforce and The BASOS Initiative are important steps in the right direction



Paul Resnik, Convenor of the Financial Stability Forum & Executive Director, PlanPlus Global


[email protected]

• The TTF shines a light on problems; to help solve them

• The TTF also shines a light on transparency champions; to encourage others

• We do this by awarding a Transparency Trophy at each of our symposia

• The winner gets to keep it

• The star-shape is significant - people can navigate using the stars so the star shape has been chosen to symbolise the idea that the winners are helping to navigate the sector to a better place

Mobile: +44 (0)7501 460308

About


[email protected]

• February 2016: Tomas Wijffels, Pensioen Federatie

• April 2016: Rachel Haworth, ShareAction

• June 2016: Jackie Beard, Morningstar

• September 2016: Gina & Alan Miller, the True & Fair Campaign

• October 2016: Robin Powell, Evidence-Based Investor

• November 2016: Daniel Godfrey, The People’s Trust

• December 2016: Ralph Frank, Cardano Risk Management

• February 2017: Con Keating, Brighton Rock Group

• May 2017: David Pitt-Watson, London Business School

• July 2017: Mike Barrett, The Lang Cat

• September 13th 2017: Steve Conley, Founder, Values Based Adviser

• September 28th 2017: George Kinder, Founder, The Kinder Institute

• November 15th 2017: Angela Brooks, Founder, Pension Life

Mobile: +44 (0)7501 460308

Previous winners of


[email protected]

• November 23rd 2017: Dr. Chris Sier, Independent Chair, FCA’s IDWG

• November 30th 2017: Dan Brocklebank, Head of UK, Orbis Investments

• March 8th 2018; Henry Tapper, Pension PlayPen, First Actuarial & AgeWage

• March 14th 2018; Bob Compton, Director, ARC Benefits Ltd

• May 24th 2018: Susan Flood, Vice Chair, Ark Campaign Group

• May 24th 2018: Nicholas Morris, Adjunct Professor, Faculty of Law, UNSW

• July 11th 2018: John Howard, Director, Consumer Insights

• July 26th 2018: JB Beckett, UK Lead, Association of Professional Fund Investors

• September 20th 2018: Heather Buchanan, Dir. of Pol. APPG/Fairer Business Bk’g

• 6th November 2018: Lesley Curwen, Reporter, BBC Freelance

• 14th November 2018: Dr. Kara Tan Bhala, President and Founder, Seven Pillars Institute for Global Finance and Ethics

Mobile: +44 (0)7501 460308

Previous winners of continued


[email protected]

• 17th December 2018: Julia Dreblow, Founder, SRI Services & The Fund EcoMarket

• 16th January 2019: Norma Cohen, Former Financial Times Correspondent

• 12th March 2019: Darby Hobbs, CEO/Founder SOCIAL3, Co-Founder & Chairperson Conscious Capitalism Boston Chapter; and Professor Boston University

• 14th March 2019: Connie and Michael Erlanger, Co-Founders of GoKnown.

• 20th March 2019: Mark Falcon, Director, Zephyre

• 16th May 2019: Dr. Anna Tilba, Associate Professor in Strategy and Governance, Durham University Business School

• 29th May 2019: Paddy Delaney, Founder, Informed Decisions

• 6th June 2019: Paolo Sironi, Watson Financial Services, IBM

• 18th June 2019: Guy Spier, Chief Executive, Aquamarine Fund

• 20th June 2019: Josina Kamerling, Head of Regulatory Outreach, EMEA, CFA Institute

Mobile: +44 (0)7501 460308



[email protected]

• 10th September 2019: Chris Tobe, Founder, Stable Value Consultants

• 11th September 2019: Jon Lukomnik, Managing Partner, Sinclair Capital

• 12th September 2019: Robert McNulty, Dir of Prog’s, Hoffman Ctr for Business Ethics

• 10th October 2019: Rick Adkinson, Chief Executive, Private Capital, Hong Kong

• 15th October 2019: Dr Shann Turnbull

• 17th October 2019: ???????

Mobile: +44 (0)7501 460308



[email protected]: +44 (0)7501 460308

Lunch & networking break We restart at 13:50 please, ready for the “team photo”



Gordon Noble, Associate, The Blended Capital Group; former Founder, the Responsible Investment Initiative; former Director of Government Relations, the Association of Superannuation Funds of Australia



Sally LoaneChief Executive Officer, The Financial Services Council; Former Broadcaster, Australian Broadcasting Corporation



The Power Panel"How can we accelerate the rebuilding of trustworthiness and confidence in financial services?“

- Carla De Campo, Head of Corporate Affairs, Cbus Super; former Director of Communications, Australian Council of Trade Unions; former Media & Policy Adviser, Australian Government

- Brad Collins, Principal, Insightful Coaching Solutions; BBus (Accounting) and an FCPA; he has a Diploma of Financial Services; former leader of national Financial Services distribution teams and leader of AXA’s adviser capability development function.

- Amanda Oliver, Principal, Governance Consultant, Mercer

- Catherine Wolthuizen, Customer Advocate, Retail Banking and Small Business; Chair, Consumer Policy Research Centre; Board Member and Chair, Consumer Advisory Committee, Victorian Legal Services Board; Panel Member, Australian Financial Complaints Authority; Chair, Economic Abuse Reference Group

- Willem Punt, Partner, Governance, Compliance & Conduct Advisory, Deloitte Touche Tohmatsu; former Group Ethics and Conduct Risk Officer, FirstRand Bank Ltd; former Director, Ethics Institute of South Africa

….leading to the Open Debate


[email protected]

What does this all mean to you?

Mobile: +44 (0)7501 460308

• You have the option, if you wish, to be included in the project

• I believe that the best form of teamwork is where everybody gets to play to their strengths; so the best way for you to be involved is for you to do what is best and easiest for you

• What are your strengths and how can we help you to use them for the cause?

• The cause is both noble and necessary; please help if you can

• I will be in touch to schedule a debrief ‘phone call with each of you ☺


[email protected]

Our work is done, for today!

Thank you for your attendance, input and ongoing support!

Mobile: +44 (0)7501 460308

Andy AgathangelouFounding ChairTransparency Task Force


[email protected]: +44 (0)7501 460308

Many thanks again to today’s host, sponsors and everybody else for taking part so fully!


[email protected]: +44 (0)7501 460308

Very brief introductions please

Please very briefly, in just a few seconds, deal with:

• Who you are; and what you and your organisation do

• Why the question “How can we accelerate the rebuilding of trustworthiness and confidence in financial services?” matters to you

Just before your introductions, a short video

Some of the speakers at our 16th May 2019 symposium in London

https://youtu.be/Ky0Qg9IpjCA


https://youtu.be/Ky0Qg9IpjCA

[email protected]: +44 (0)7501 460308

Our second short video…

Some of the speakers at our 16th May 2019 symposium in London

https://youtu.be/Is7N5DqjfXM


https://youtu.be/Is7N5DqjfXM

[email protected]

“How can we accelerate the rebuilding of trustworthiness and confidence in financial services?”

Mobile: +44 (0)7501 460308

From 3 minutes 50 seconds to 7 minutes 25 seconds https://www.ted.com/talks/onora_o_neill_what_we_don_t_understand_about_trust?language=en


https://www.ted.com/talks/onora_o_neill_what_we_don_t_understand_about_trust?language=en


Discussion:

“What are the consequence of low levels of trust and confidence in financial services; for- Regulators?- Policymakers?- Market participants? (commercial entities) - Society as a whole?”


mercer, melbourne; october 17th, 2019 · the 219 edelman trust barometer. mobile: +44 (0)7501...

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