Common Purpose

TRACK THE MONEY PROGRAMME DAY
20th July 2005

Common Purpose, tel: 020 7608 8105, fax: 020 7336 6844, email: tracy.thurgar@commonpurpose.org.uk website www.commonpurpose.org.uk Programme Director: John Porter (07976 607079 m) Programme Co-ordinator: Tracy Thurgar (07787 577131 m)

Common Purpose UK, Company Limited by Guarantee, Registered Office (only) 35 St Thomas Street, London SE1 9SN Registered in England 3556983, Registered Charity 1023384 © The Common Purpose Charitable Trust 2003

Contents
Title
Aims and objectives

Page Number
3

Agenda

4

Venue details and map

6

Visit information

9

Speaker Biographies

11

Essential Information

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Common Purpose would like to thank Henderson Global Investors for sponsoring this day and all contributors for their support.

The contents of this pack are for general information purposes only. Where a view is expressed, it is not the view of Common Purpose. Common Purpose does not endorse any of the views contained in this pack and accepts no responsibility for reliance placed on the views contained in this pack.

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Aims and objectives

Track the Money
What drives the local economy? How does it fit into the national economic picture - and the international? Where are the innovations coming from? What could help us, what could hinder us, what could hurt us? Our focus on this day is firstly to understand the character of London’s economy and its strengths and weaknesses, thereby broadening and deepening our sense of place. Secondly, to make use of the market-place as an environment in which to engage with a variety of leadership challenges related to this sector – risk, competition, innovation, reward and creativity. The objectives of this day are: • to understand what helps and hinders the development of a successful local economy • • to explore the challenges facing the wealth creators in this area to identify learning that you can apply back in your work-place relating to risk, creativity, innovation and entrepreneurialism

Every society has some form of enterprise culture in which products are created and sold with some form of additional value generated through the transaction between seller and buyer – most commonly expressed in monetary terms. From the simple exchanges within a subsistence culture to the complexity of the knowledge economies in our digital age, trade and commerce underpin all aspects of a society’s character. The nature of commercial transaction – from barter to capitalism – creates a unique environment in which risk, enterprise, aspiration, creativity, motivation, reward, innovation and competition can have expression. However, this same system can also produce failure, poorperformance, corruption and unsustainable practices seem also to emerge. This environment is best described as “the market”. As the complexity, sophistication and strength of the market increases, there are on-going debates about appropriate levels of regulation and intervention and about the nature of the relationship between the market and the society within which it operates. Observations from Common Purpose Graduate Conference on Innovation & Entrepreneurship - 2005
http://www.commonpurpose.org.uk/home/public/graduatesandparticipants/graduates/GradCon200 5report.aspx

“Big organisations have to create small organisations internally to foster innovation.” - Digby Jones “Make people think like a market trader.” - Laura Tennison “Where’s the pain? Solve that first.” - Mike Southon

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Agenda

Track the Money
Draft agenda
8.20am 8.50am 9.10am Arrival and refreshments Welcome and briefing for the day Roger Yates, Chief Executive Henderson Global Investors Money makes the world go around? What’s your attitude to money, markets, profit? Decide which company should receive an award. Finding your way through the market maze Tarek El Diwany – Partner, Zest Advisory LLP Michael Collins, Associate Director, Specialist Equity Funds, Henderson Global Investors London is Europe’s financial capital. How do the money markets operate? What drives them? What do we need to understand about them? 10.40am 11am Break Making money - taking risks Patrick Frederick, Chief Executive Officer, Aimex International An examination of the conditions needed for success – including the role of competition, a strong national market, the role of government. In discussion time, we will explore what this means for us in our organisations. 12noon Lunch We will be joined by some staff from Henderson to discuss issues raised during the morning. There will also be an opportunity to visit the investment floor. 12.30pm (depart for visits) Meet the Wealth Creators – doing business in London Bankside Restaurant, Kelvin Macdonald, Managing Director Barclays, Grant Philips, Marketing Director – Medium Businesses London Small Business Growth Initiatives, Paulette Pryce, Director Out and about to gain insights into the challenges faced by local businesses and explore how different business leaders tackle the challenges of running a private sector organisation, particularly focusing on risk and entrepreneurship. 3pm Compare and contrast (with refreshments) In groups after the visits, explore the commonalities and differences in the private sector. Draw comparisons with the challenges faced in other sectors.

9.40am

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Agenda
3.30pm The Bottom Line Rob Lake, Head of Corporate Engagement, Henderson Global Investors Experience the bottom line directly. As trustees of a pension fund your task is to decide which companies to invest in. 5pm 5.10pm Break So what can I do? In learning groups, reflect on what you will take from today in terms of your own leadership in your own organisations. 5.40pm What’s our challenge? Initial work on the next challenge day “Over to You”. We will identify which challenge(s) you want to work on and start to identify who you need to talk to in order to work out your strategy for change and even to start effecting that change. 6.30pm Depart

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Venue Details
Venue Henderson Global Investors 4 Broadgate London EC2M 2DA Michael Collins – 020 7818 5618 There is no car parking available at Henderson’s 100 – Aldgate, Wapping, Shadwell 205 – Aldgate Station and Whitechapel 11 – St. Pauls, Trafalgar Square, Victoria, Fulham Broadway. 23 – Bank, Oxford Street, Trafalgar Square, Westbourne Park 153 – Moorgate, Islington, Barnsby, Finsbury Park. 214 – Angel, Kings Cross, Camden town, Higate. 133 – London Bridge, Elephant and Castle, Brixton, Streatham. Liverpool Street on the Central Line, Hammersmith and City Line, Circle Line and Metropolitan Line. Main Lines from Eastern England including London Stansted Airport

Contact person Car Buses

Tube Train

Broadgate is behind Liverpool Street Station, take the main exit from the mainline station, opposite Marks and Spencer on the upper level, or Delice de France on the lower level and take the escalator up. Turn right and cross Sun Street Passage, right onto Liverpool Street. From Liverpool Street underground exit, walk out onto Liverpool Street, with the Railway Tavern in front of you. Walk past UBS on your right hand side. At the end of UBS building turn right. In front of you is a sculpture, walk straight past it. You will come to a circular open area. Walk left around it. 4 Broadgate, Henderson Global Investors is directly in front of you. Please report to the main reception, you will be given a guest pass and directed up to the 7th floor. For a map please refer either to an A-Z go to http://www.streetmap.co.uk/, or visit http://www.multimap.com, type in the postcodes and the sites will provide you with a map.

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Venue Details

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Venue Details

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Visit information
Bankside Restaurant, Kelvin Macdonald, Managing Director
Kelvin is married with 2 Boys aged 18 months and 3. 2004-2005 Kelvin has taken J P Morgan’s staff canteen and opened a 250 seater restaurant and large bar next to the Bank of England EC2 on target for £1million first year. 2000-2005 Took a disused office basement turned it into a 170-seater restaurant next to the Globe theatre in SE1 with a turnover £1.2 million. 2004 Bankside became, "Small company of the year" BITC IIP accredited 1997-2000 Kelvin owned an outside catering and event company, whose clients included, No 10 and 11 Downing St & Aston Martin 1991-1999 Personal Chef to the Chancellor of the Exchequer included Lord Lamont, Kenneth Clarke and Gordon Brown. 1985-1991 British Army Chef trained, had tours in Belize, Canada, N Ireland, Germany 1968-1985 Dragged up in Lancashire, started work at 9 and had a 28 hr week job by the age of 11. Enjoys all sports and eateries! HTTP://WWW.BANKSIDERESTAURANTS.CO.UK/

Barclays, Grant Philips, Marketing Director – Medium Businesses
Grant Phillips, an Oxford graduate, joined Barclays in 1977. His four-year training programme included two years with Barclays Bank of California based in San Francisco working with "hightech" companies in Silicon Valley. He spent four years with the Bank's Inspection Department, rising to become Assistant Chief Inspector with responsibility for the Group's International Operations. In 1990 he was appointed Caribbean Director, based in Barbados where his work included restructuring of the Barbados sugar industry and ongoing financing of the citrus and banana industries of Central America. In 1993, he became Managing Director of Barclays Unicorn Ltd, the Bank's Unit Trust Company, and the fifth largest in the UK. He was appointed as Director, Communications and Training for the Barclays Corporate Banking Euro Programme in 1997 and spent two years as the Bank's media spokesman on Euro issues. He has wide experience of TV, radio and press and has made over 200 conference presentations on the Euro. Grant took up a new appointment as Managing Director, Barclays Agricultural Banking in January 2000 and was appointed Marketing Director, Medium Business and Agriculture in April 2003. 9

Visit information
With five marathons and a Barbados triathlon under his belt, Grant now keeps fit as a qualified rugby referee. HTTP://WWW.BARCLAYS.CO.UK/

London Small Business Growth Initiatives, Paulette Pryce
Paulette has had a rich and varied career in a number of enterprise sectors. These have included computer technology, travel and tourism, import/export markets and the food and catering industry. From creating new market opportunities for Caribbean spices in Europe and establishing one of the UKs first successful Caribbean restaurants, she is well recognised as one of the UKs pioneering entrepreneurs of her generation. Paulette currently combines her numerous business initiatives, which ranges from property development to agriculture with business advisory support for new and emerging entrepreneurs. She is currently the Director for Destination Brixton, a major international Creative and Cultural Industries Expo for London.

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Speaker Biography
Patrick Frederick, Chief Executive Officer, Aimex International
PATRICK S. FREDERICK B.Sc. (Eng), MBA Nationality - Creole and British. Born in Dominica in the Caribbean in 1949 and arrived in the UK in 1956. Honours Degree in Mechanical Engineering & Masters Degree at CASS Business School SMITHS INDUSTRIES PLC - International Industrial Engineering Group (14 Years) · Apprenticeship and graduate training program. · Held senior engineering and management positions. · Qualified as a Chartered Production Engineer. J.P.MORGAN, INC - Major American Investment Bank (7 Years) · Joined the London office in the City and received several promotions. · Held senior management positions in Global Finance working with London, New York and Brussels. FINANCIAL MANAGEMENT CONSULTANCY (10 Years) · Developed own business through offering Business Advisory Services to Small & Medium Sized Enterprises (SME's) and Financial & Investment advice to Personal and Corporate clients. AIMEX INTERNATIONAL - Founder & Chief Executive Officer (1996) · Established International Consultancy offering Corporate Funding and Advisory Services. · Maintains close relationships with Institutions and high net worth individuals throughout the world. BOARD APPOINTMENTS · Jamieson Capital Inc. - Co-founder & President · Undertakes financial transactions for the Jamieson Group, based in Canada. · On the Board of several companies within the Group involved in a wide range of activities including Corporate Funding, Real Estate Development and Corporate Leisure & Asset Ownership. · Bird of Paradise Properties Ltd - Regional and Board Director. · With the immanent establishment of seed funding, the Australian Company will be marketing a unique and highly advanced low-cost housing product to numerous Governments around the world. · Individually responsible for 37 countries throughout South America, South Africa and the Caribbean. · Accountable for the company's financial management controls. · Friends in the City Ltd - Co-founder & CEO · A networking company established to help new arrivals plug into London's best culture and entertainment and meet those all-important friends and contacts quickly and easily. · · SpringBoard4Business Group Ltd - Non-Executive Director. Assisting Small & Medium Sized Enterprises (SME's) in optimising their development.

Speaker Biography
CORPORATE MEMBERSHIPS & AFFILIATIONS · Confederation of British Industry (CBI) - Member of both the London Regional and SME Councils. An independent organisation, whose voice influences the global competitiveness of British business. · Private Investment Commission (PIC) - Member of the Advisory board within the London Development Agency (LDA). It advises the Mayor of London's Agency on initiatives and opportunities for Economic Development, Regeneration and Job Creation within London. · Under Discussion - To become a special adviser to the Shadow Government advising on SME business and policy development. Further, to become a member to the All-Party Government and Entrepreneur Group to assist in optimising the global performance of the UK's entrepreneur sector. · African Caribbean Business Network (ACBN) - The inaugural Chair initiated by Mayor of London. INTERESTS AND ACTIVITIES · International Business Affairs, Ancient Rituals, Martial Arts, Sports.

Tarek El Diwany, Senior Partner, Zest Advisory LLP
http://www.zestadvisory.com/z_home.htm Tarek is the senior partner at Zest Advisory LLP. Between 1996 and 1998 he headed the Islamic Finance department at Prebon Yamane in London, having previously established an OTC bond derivatives dealing operation for the same company. He is the author of The Problem With Interest (1997) and founder of www.islamic-finance.com (1997). Tarek holds a BA Hons in Accounting & Finance from the University of Lancaster in the UK (1985) and is a founding partner of Zest Advisory LLP.

Essential reading

Below are some summaries of articles to stimulate your thinking for the programme day ahead. For further reading on related subjects, please see the ‘Further Reading’ section of the website.

Capitalism Works, Geoffrey Owen, Prospect December 2003 In this article Geoffrey Owen, senior fellow at the LSE's Institute of Management and a former editor of the Financial Times, argues authoritatively that America's shareholder-driven business model has curbed its excesses and remains the most effective system of wealth creation. He argues that the “American Business Model” has suffered since the stock market crash and corporate scandals such as Enron, and observes that consequently it “is widely condemned as both immoral and inefficient”. Some have concluded that the shareholder based model “is flawed and managers should be answerable to a wider set of stakeholders, including employees”. Owen believes, however, that the scandals, while shaming, “have not negated (its) enormous strengths” and that the race to introduce changes to the system, especially in changing the focus from shareholder value, responding to what investors want you to do, and responding to workforce and community needs, is misguided. ”During this quarter of a century the system has undergone big changes, the most important of which are a larger role for the stock market in disciplining companies and a stronger emphasis by managers on shareholder value. These changes have enhanced the position of the US as the world's most productive country. Neither Enron nor the bursting of the stock market bubble has undermined American leadership.” The shareholder value revolution, linked to innovation in financial markets, has made US industry more flexible and productive. To the extent that Britain moved in a US direction during this period - and it did so to a much greater extent than other European countries - the results were also beneficial. Unwieldy conglomerates were broken up, and companies were quicker to close loss-making businesses. Deregulation allowed new entrants to prosper, Vodafone being a spectacular example. And an expanding venture capital industry supported many business start-ups in new areas such as biotechnology.” He argues that the purpose of corporations is to create wealth by profitability, and that should be their main focus – “its ability to provide goods and services at a price which more than covers the costs it has incurred. If the corporation achieves this in a competitive market, there is a reasonable presumption that it is using its resources efficiently, and thus contributing to social welfare. “ Shareholders invest in a company on the basis of its current and future profitability, reflecting in share prices. Dangers arise when the share price gets out of line with reality – “an overvalued share price can be as dangerous to a company as an undervalued one”. Owen espouses the view that managers need to look to long term profitability, acknowledge that businesses may have to shrink, sell off unprofitable areas, and respond to changes in the market, such as sector demand by getting smaller if necessary and return the cash to the shareholders, and thus “ keep the interests of shareholders and by extension those of society

Essential reading

as a whole. “ Owen suggests that if companies concentrate on shareholder value rather then short term and personal management gain it could form part of the solution. And, he suggests that if the UK embraced this strategy then we would be on the way to closing the productivity gap between the USA and the UK.

Globalisation and the UK Economy http://www.tutor2u.net/economics/content/topics/trade/globalisation_ukeconomy.htm The UK has one of the most open economies in the western world. Twenty years ago, foreign exchange controls were abolished and our financial markets have been gradually deregulated. Trade with other countries assumed a high and rising percentage of total national output. Clearly, the globalisation process impacts significantly on the British economy – some examples include: • • • High levels of foreign direct investment (both inwards and outwards). Rising level of import penetration. Globalisation increases the importance for Britain of continuing to develop a competitive advantage in industries with major growth-potential. Greater investment is needed in high value goods and services – for example in high and medium-high technology manufacturing and in knowledge-intensive service sectors. Structural change in industries – for example the long-term loss of output and employment in industries such as textiles and other manufacturing sectors. The current wave of globalisation places heavy emphasis on the importance of human capital, and the global demand for high skill services and high value-added manufacturing output remains strong. The UK will require a substantial improvement in the skills and flexibility of the workforce. The impact of globalisation on the British government – for example in changing the corporate tax regime and reforming labour markets and the welfare system. Globalisation has increased competitive pressures on British businesses in tradable goods industries. Cheaper prices for many international commodities and manufactured goods have helped to control inflation in recent years.

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Would-be entrepreneurs fail to act on impulse, Clearly Business, 7 March 2005 http://www.clearlybusiness.com/cb/articles/nf_111022519010496.jsp People in the UK are failing to act on promising business ideas, thereby starving the country of useful inventions, new research has revealed. A survey by the East of England Development Agency (EEDA) shows that while the UK is fertile ground for business brains, many are unable or unwilling to take their ideas forward. Just under three-quarters of respondents admitted to only recording ideas in their head, while 43% went as far as telling someone else and a mere 13% committed pen to paper. As a result,

Essential reading

23% of male respondents said their idea was seized upon and exploited by someone else. The same was said by 16% of female respondents. Charles Kitchin, regional marketing manager for the EEDA, said: "With innovation being heralded as the new currency for business success, these statistics should cause concern to the business community. "It is clear that people have the ability to come up with great ideas, but they are not being helped or encouraged to capitalise on them." However, earlier research shows that thousands of people in the UK are acting on ideas. Figures contained in this years' global entrepreneurship monitor show that 6.3% of working adults were involved in a business venture. Commenting on today's figures, Mike Southern, co-author of 'The Beermat Entrepreneur', said: "People have business ideas every day without realising it. What sets the entrepreneur apart is that they acknowledge their ideas and then put them into practice. "People need to recognise their great ideas, write them down on anything that comes to hand - a beer mat for example chat about it with friends and then go for it!" For people wanting to transform business ideas into a working project, Southern offers the following advice: • • • • sum up your idea in two sentences - it needs to say what the idea is, who will benefit most from it and why you are the right person to provide the product or service. get a mentor to bounce your ideas off find your first customer by doing a trial run - getting someone to part with money is a way of gauging whether there is a market for your idea. constantly assess how things are going in the early stages - this will help with business planning.

Essential reading

Key Facts about the City of London http://www.marwaha100.freeserve.co.uk/facts/key.htm Key facts about the City of London: • London as a Centre for International Financial Market • Economic importance of financial services • Banking • Fund Management • Foreign Exchange • Foreign exchange turnover, April 1998 • Maritime services • Insurance • Derivatives • Securities dealing • Foreign equities turnover, 1998 • Bullion market • Advisory services • A quick history

Corporation of London, Working for a World Class City http://www.cityoflondon.gov.uk/Corporation/media_centre/keyfacts.htm The City of London is the worlds leading international financial and business centre a global powerhouse at the heart of the UK financial services. This sector made a net contribution to the UK's current account of over £13bn, a significant amount of which was generated within the Square Mile. The City contributes 3% to the UK GDP and 13% to London GDP, while London contributes 20% to the UK GDP. The Corporation of London prime role is to support and promote the City. Our services sustain the City 24 hour operational needs and our strategic economic development positions the City for the future. We will take every opportunity to ensure the City continues to thrive as the world leading international finance centre and Europe financial capital.

Essential reading

Benefits, Britain in Europe http://www.northwestineurope.org.uk/inyourarea/london/regional-factsheet Membership of the EU is vital for the economy in London: In 2000 a report by South Bank University found that 388,000 jobs in London depended on exports to the EU. The European Union is London's most important export market. In 2001, 44% of goods exports from London went to countries in the EU, bringing £10.3 billion a year into its economy. In 2001 there was an average of 2594 companies that exported from London to the EU each month. Tourism is one of London's biggest industries and 41% of tourists who visited London in 2001 came from the EU countries.

About London http://londonctcollege.com/college/about%20london.htm West London has a population of over 1.3 million people and is of major economic importance to the UK/London. It is the home of Heathrow Airport, many of the country’s media and corporate organisations. The buoyant economy of West London and the proposed Terminal 5 developments at Heathrow Airport continues to create significant opportunities and gives a major boost to the local economy and general prosperity of the region. London’s Heathrow Airport lies within West London and Hillingdon’s boundaries. Heathrow is a significant source of employment for residents and is a catalyst for major business activity in the area. West London has been successful in attracting a large number of national companies with growth potential and is the headquarters for many companies who need to be located near the airport.

GLA Economics, London’s Economy Today, October 2003 http://www.london.gov.uk/mayor/economic_unit/docs/londons_economy_today_no14_221003. pdf The London economy is improving These positive developments for the UK and US economies provide an encouraging backdrop for London’s economy. The latest Royal Bank of Scotland London Poll business activity index rose to a three-year high of 59.8 in September, a significant improvement on August’s reading of 57.1 and above the UK average of 56.7. The tourism sector appears to be enjoying an upturn after stabilising in recent months. In the three months to August, overseas visitors to the UK and spending by these visitors rose by 11 per cent and 7 per cent respectively compared to the previous three months. Passenger numbers at the British Airports Authority’s three London airports (Gatwick, Heathrow and Stanstead) were up by 1.7 per cent in September on the same month a year ago. However, out of line with these figures, the British Incoming Tour Operators Association reported a fall in visitor arrivals of 3.5 per cent in August 2003 compared to August 2002. Overall, however, the indicators for London’s tourist sector appear positive.

Essential reading