Network Magazine Vol II 2015 London

NETWORK NEW YORK / LONDON

US Elections

A Look Ahead from Washington

Plus

Behavioural Microtargeting – The Future of Audience Engagement Also

What Does Leadership Look Like?

An Interview with Sir Martin Sorrell, CEO of WPP and Chairman of BritishAmerican Business International Advisory Board

OCTOBER – NOV EM BER 2 015

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Contents

60 Seconds – Maria C. Sebastian SVP Global Sales, Virgin Atlantic

Transfer Pricing: An Evolving Problem

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Welcome from our CEO New IAB and Board Members London Transatlantic Council Members Listing Meet The New Members 60 Seconds with Maria C. Sebastian SVP Global Sales and Customer Engagement, Virgin Atlantic

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Cover Story The US Elections

What Businesses Can Learn From The Arts

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9 What Does Leadership Look Like?

An Interview with Sir Martin Sorrell, CEO WPP 10 Transfer Pricing: An Evolving Problem

Insight

6 US 2016 Presidential Elections: A Look Ahead from Washington 7 Introducing Behavioural Microtargeting – The Future of Audience Engagement

11 Building a Digital Platform to Support European Smart Cities 13 Cyber Security: A Real and Present Danger Brits Abroad: Five Reasons UK Businesses should be Exporting 15 Sustainability Materiality and Changing Business for Good Smart Nutrition Makes Good Business Sense

Features

Culture

Cover Story

8 John Simmons – An Introduction for Members

16 What Businesses Can Learn From the Arts 17 Author Spotlight

Office Address

London Staff

BritishAmerican Business

Jeffries Briginshaw, CEO, BritishAmerican Business jbriginshaw@babinc.org

London 12 Phillimore Walk West Wing 2nd Floor London W8 7RX Tel: (0)20 7290 9888 ukinfo@babinc.org New York 52 Vanderbilt Avenue, 20th Floor New York, NY 10017 Tel: +1 (212) 661 4060 nyinfo@babinc.org Editor Rachel Reaney

www.babinc.org

Vina Bongiorno, Director – Membership, Sales and Marketing vbongiorno@babinc.org Helen Anderson, Director – Communications and Events handerson@babinc.org

What Does Leadership Look Like?

An Interview with Sir Martin Sorrell

Event Hightlight – Annual Corporate Citizenship Awards Dinner

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Forums & Policy 18 Workplace Talent A Balancing Act 19 Taxation Forum 20 Policy World: What’s New?

Events

21 London Event Highlights: Summer Networking Reception, SME Forum, An Evening with Dame Fiona Woolf CBE, Summer Reception with the Deputy Chief of Mission 22 Annual Corporate Citizenship Awards Dinner 2015 23 New York Event Highlights: Cyber Security Roundtable, An Evening at the Opera, The New Norms of Business in China, Briefing with David O’Sullivan, EU Ambassador to the US 24 BABC Annual Conference 2015 25 Events Calendar: New York and London

Get Social Sabina Hussain, Events Manager shussain@babinc.org Rachel Reaney, Communications Manager rreaney@babinc.org Emanuel Adam, Head of Policy and Trade eadam@babinc.org

Tariro Masukume, Membership Manager tmasukume@babinc.org

John Adam, Office Manager, Accountant jadam@babinc.org

Andrew Pantaleo, Membership Manager apantaleo@babinc.org

Sherry Dolatshahi, Executive Assistant to the CEO sdolatshahi@babinc.org

@BABLondon

“BritishAmerican Business”

BritishAmericanBusinessLondon

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CEO I BritishAmerican Business

Welcome

Jeffries Briginshaw I jbriginshaw@babinc.org One year from now, US Presidential candidates will frantically sweep the country, looking to pick up any remaining votes and garner lastminute support on the eve of the national elections. On November 3rd 2016, the world will wake up to the long-awaited revelation of America’s leader for the next four years. As business communities across the world follow the candidates’ journeys to the White House, we thought to bring some early focus by putting together some special coverage in this edition of Network on the US elections, and look at some of the campaign techniques with crossover relevance to business. We are delighted to feature insight from Alexander Nix, CEO of Cambridge Analytica that highlights the applications of behavioural targeting in building relationships with not only voters – but also customers (page 7). In addition, we thank The Honorable Richard W. Pombo, former US Congressman and principal of the government relations firm Gavel Resources for his commentary underscoring the significance of the election on public affairs in Washington (page 6).

Elsewhere in the magazine, we feature a selection of insights from our member companies including: AIG, Chelsea FC, Digital Realty, Fedex, Virgin Atlantic Airways as well as an exclusive leadership interview with Sir Martin Sorrell, Chairman of the BritishAmerican Business International Advisory Board on page 9. On page 16, in our ‘Culture’ section we explore a few lessons that the business world can take from the arts with Nicholas Selman, Director of Development at the London Symphony Orchestra and on page 17 we have an extract from Gavin Serkin of Bloomberg’s latest book ‘Frontier – Exploring the Top Ten Emerging Markets of Tomorrow’.

Looking forward to key events this winter, we hope that you will join us on Wednesday November 11th for our Women’s Forum Annual Conference. We are excited that the event will follow through on the work to date of our successful Women’s Forum, which means we can anticipate a unique BritishAmerican Business (BAB) blend of both inspirational and practical insights covering topics such as the ‘myths’ of recruitment, retaining and promoting women in business and the development of influence and persuasion skills for business success.

In addition, we hope that you, your colleagues and clients will join us for our Annual Christmas Luncheon at the Dorchester on Tuesday December 8th for what promises to be a hugely enjoyable afternoon of networking and entertainment with an impressive array of prizes - at the best Christmas lunch in town!

Finally, do turn to pages 21-24 to see our event highlights from last season, which include our Annual Corporate Citizenship Awards Dinner where we honoured Dan Glaser, President and CEO of Marsh & McLennan Companies and Steve Holliday, Chief Executive of National Grid for their exceptional commitment to corporate social responsibility. One of our key moments of the year so far was hosting the British-American Business Council (BABC) annual transatlantic conference in New York, where we shared business insights and developed new relationships. Upcoming events for your diary can be found on page 25 and on our website (www.babinc.org/events).

We hope you enjoy this edition of Network and look forward to seeing you at one or more of our great events taking place in the coming months.

New Board and IAB Members BritishAmerican Business (BAB) is governed by a transatlantic Board of Directors, led by our Chairman, Nicholas Walsh, Senior Advisor, AIG and our President and Deputy Chairman, Christopher Perry, President Global Sales, Marketing & Client Solutions, Broadridge Financial Solutions. The Board’s active support and commitment to BAB and its objectives are important to ensuring our continued success as an organisation. We also enjoy strong support from our International Advisory Board, consisting of Chairmen and CEOs from more than 100 major multinational companies. We are delighted to announce that the following new members have recently joined our Board of Directors and International Advisory Board.

NEW BOARD MEMBERS

NEW INTERNATIONAL ADVISORY BOARD MEMBERS

Eric Benedict Managing Director and UK Market Leader, AlixPartners

Andy Rubin Chairman, Pentland Brands

Matt Tuck Head of Global Corporate Banking, Barclays Marykay Fuller Partner, KPMG 2

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Ann Sarnoff President, BBC Worldwide North America Dylan Taylor CEO, Colliers International Carolyn Fairbairn Director-General, CBI

Truett Tate CEO and Head of Institutional Relationship Banking, America, ANZ Richard Jones Chairman, Proxima Group Antonio Horta-Osorio Group Chief Executive, Lloyds Banking Group www.babinc.org

Transatlantic Council Members NOVEMBER 2015

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A Aberdeen Asset Management ACE Group ACS International Addleshaw Goddard AIG AlixPartners American Airlines Aon Arnold & Porter Arup Asia House

B BAE Systems Applied Intelligence Baker & McKenzie Bank of America Merrill Lynch Barclays Blick Rothenberg Bloomberg BNY Mellon Boeing UK BP British Airways Broadridge Financial Solutions BT Bulgari Hotel & Residences London

C CBRE Certeco Chelsea Football Club Chevron Citi City of London Colliers Corporate Service at Harrods Crowell & Moring Cubitt Cushman & Wakefield

D Debevoise & Plimpton Deloitte www.babinc.org

Transatlantic Council Membership is reserved for a select group of BritishAmerican Business leading companies with over 100 employees or more. As a Transatlantic Council Member you can expect to be offered a customised programme of exclusive networking events, regular membership meetings and business opportunities, associated with this highest level of membership.

Delta Air Lines Digital Realty DLA Piper Dow Jones

E Edelman Edwin Coe Esso Petroleum Company EY

F FedEx Flanders Investment & Trade Embassy of Belgium FMP Global Ford Fragomen Fried, Frank, Harris, Shriver & Jacobson (London)

G Grange Hotels Gulfstream Aerospace Corporation GVA

H

Knight Frank KPMG

L Linklaters Littler Mendelson Lloyds Banking Group Lockheed Martin UK London & Partners London Philharmonic Orchestra London Symphony Orchestra Loomis Sayles

M Moser Associates Magrath Marriott Hotels Marsh & Mclennan Companies McGuireWoods McKinsey MHI Global Moelis Montrose Associates Morgan Lewis & Bockius Mercer

Hays HCA Heathrow Airport Herbert Smith Freehills HSBC

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IBM Interel Invest Northern Ireland IPSA Irwin Mitchell

PACCAR Inc Pentland Brands Plc Philharmonia Orchestra Philip Morris Pillsbury Winthrop Shaw Pitch Factory Proxima Pullman London St Pancras PwC

J JPMorgan Chase JMI

K K+L Gates King & Spalding Kingstree Group

National Theatre

O Orrick Herrington & Sutcliffe

R RADIUS Raytheon

Reed Elsevier Reed Smith Reeves & Co Rolls-Royce

S Santander Shearman & Sterling Shell Smith & Williamson Spence & Partners Squire Patton Boggs Standard Chartered Bank

T TASIS The American School in England Taylor Made The British Land Company The New York Times Global The Risk Advisory Group Thomson Reuters Truphone

U UKTI United Airlines University of Chicago Booth University of Edinburgh Business School UPS US Embassy

V Verizon TC Virgin Atlantic Airways

W Weber Shandwick Weil, Gotshal & Manges Wells Fargo Welsh Government Willis Group Withers WPP

Z Zurich Insurance

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New Members

www.debevoise.com

www.digitalrealty.co.uk

Debevoise & Plimpton LLP is a premier law firm with marketleading practices, a global perspective and strong New York roots. Approximately 650 lawyers work in eight offices across three continents, within integrated global practices, serving clients around the world.

Digital Realty Trust, Inc. supports the data centre and colocation strategies of more than 600 firms across its secure, network-rich portfolio of data centres located throughout North America, Europe, Asia and Australia.

Gavin Collins, Assistant Director, Media & Communications gcollins@debevoise.com 65 Gresham Street London EC2V 7NQ +44 (0)20 7099 0803

www.avanteit.com.au Avante was created to help businesses of any size with their technology. We strive to provide businesses with the best technology, outsourcing, consulting and IT partnerships. We believe the best business IT is about the right mix of people, passion, culture, experience, technologies and process. Our board of directors is made up of successful business and IT professionals from Australia and the UK, so we never lose sight of our mission.

Scott Crawford, Chief Executive Officer scott@avante-group.com 266 Fulham Road, London SW10 9EL +44 (0)20 7751 5599

40 Gracechurch Street London, EC3V 0BT GB +44 (0)20 7954 9100

www.onyxrem.com Onyx is a boutique property services firm based in London.

We are experienced real estate professionals helping clients with all of their property needs, and will provide the highest level of service every step of the way.

We specialize in helping international clients as they move to London, from neighbourhood selection to finding the right home, whether a rental or purchase. However we are full services firm offering sales, lettings property management and interior design.

Ugoada Arinzeh, Founder and CEO ugo@onyxrem.com 111 Buckingham Palace Road, London SW1W 0SR +44 (0)20 8450 4187

www.certeco.co.uk

www.wefindgroup.com

Certeco is a Business change management consultancy specialising in Programme Management, Business Analysis, QA and Testing, Governance.

We Find Group based in Madrid, London, and Miami delivers Headhunting Services for multinational companies and coordinates Global Internship Programs for top US Universities in London and Madrid.

Jan Jackson, Marketing and Communications Manager jan.jackson@certeco.co.uk 25 Watling Street London, EC4M 9BR US +44 (0)20 7099 0803

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Jihann Pedersen, Head of Marketing jpedersen@digitalrealty.com

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Carlota Navarro, President carlota@wefindgroup.com Calle del Castillo de Fuensalda単a 4, Loft 221, Las Rozas, 28232 ES +34626737825

www.babinc.org

Feature

60 Seconds with...

INTERVIEW

Maria leads Virgin Atlantic Airways’ Global Sales and Customer Engagement division and is responsible for Worldwide Sales, Distribution & Strategy, Loyalty & Ancillary Revenue, and E-Business.

She joined Virgin Atlantic in July 2012 as Director of Worldwide Sales, responsible for the airline’s passenger revenue performance of over £2 billion. With over 19 years in the industry, Maria has incredible experience in global aviation and is a driving force behind the airline’s growing ambitions.

Maria C Sebastian

Senior Vice President, Global Sales & Customer Engagement, Virgin Atlantic Airways

Prior to Virgin Atlantic, Maria held the position of Managing Director, Worldwide Advertising, Promotions & Product Marketing for American Airlines. Previous to this she held the role of Vice President & Managing Director of Sales and Marketing – Europe, Middle East, Africa, and India, based in London.

What was your first job and how has that impacted your career?

it Winston Churchill who said ‘In success you deserve it and in defeat, you need it’?

I had 2 concurrent jobs right after university, before I went to graduate business school at Duke. As context, my undergrad degree is in Economics, Spanish Literature, and Dance, so while it may seem random that I was a pricing analyst for a large international shipping company while I was also a ballet dancer at a small dance company, that was by design and has been part of my career philosophy from the early days. Both of these roles impacted my career as the shipping company was my first job within transportation, a sector I have been in for almost 20 years. Similar to those early days, I really enjoy combining the analytical with the creative. At Virgin Atlantic, I have responsibility for Global Sales, Loyalty, and Digital, and those functions very much combine the analytical with the creative.

One thing you want people to know about Virgin Atlantic is?

We fly to over 200 destinations worldwide from the UK, on Virgin Atlantic and our partner, Delta Air Lines.

You travel a lot, where do you go to get away from it all?

Shoes, dark chocolate, and the fear of missing out!

If you could live off one type of food for the rest of your life what would it be?

If you could re-live one memory, what would it be and why?

Non-conventional.

What’s your biggest weakness?

I grew up on the ocean in Florida, so I just love seafood. As for a drink, there is always a good excuse for a nice glass of champagne. Wasn’t

www.babinc.org

Your life philosophy, in under 10 words is?

Be yourself. Live a proud life of passion and adventure.

What is your favourite thing to do when you’re in London?

That’s hard to answer, as the excitement and variety of London is what draws me to live here and call it home for the last 10 years. In the summer, the variety of outdoor activities, from festivals to quiet walks, is wonderful and unique. But if I had to choose one thing, it would be the amazing breadth and depth of London theatre.

Definitely Deer Valley, in Park City, Utah. We try to get there twice a year. As a historic miningtown-now-ski-resort in the Rockies, it is very relaxed, which is wildly different than our buzzy city life in Central London. That said, I also love to escape to our garden square with my two kids. It is amazing how you can get away from it all with just a few hours in the garden.

Describe Richard Branson in one word?

she first saw her sister was priceless. I try to remember that day when I am asked to referee one of their arguments!

What’s the most rewarding part of working with Virgin Atlantic?

Working with an incredible team of people dedicated to ensuring an enjoyable and memorable flight experience.

The day my oldest daughter (now 10) met her younger sister (now 4). After months of anticipation, the smile on her face when

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Cover Story

US 2016 Presidential Elections: A Look Ahead From Washington US ELECTIONS

The Honorable Richard W. Pombo

Principal, Gavel Resources US House of Representatives 1992 – 2007 Chairman of the Resources Committee Vice-Chairman of the Agriculture Committee

The US Presidential elections are a year away, but already it has been a noisy summer of political campaigning. Jason Jarrell, director at the global public affairs consultancy Interel, sat down with The Honorable Richard Pombo, former US Congressman and principal of the Washington government relations firm Gavel Resources, to examine the current state of the US elections and what it means for public affairs in Washington.

So far the media has largely focused on the more sensational elements of the US Presidential race, but as we move forward what do you think will be the defining policy issues of the elections?

When we look at the vast number of candidates seeking their party’s nomination for the US Presidency, it’s important to keep in mind that candidates who peak early often cannot sustain their positions.

For example, the 2012 Presidential primary season saw a number of Republican candidates as the front runner before they ultimately dropped back in the polls.

mapping out their administrations and forming transition committees ahead of the elections.

You served in Congress for more than 15 years and have witnessed a number of big elections. From a public affairs perspective, how does Washington change in an election year in terms of rule-making and engaging with government stakeholders?

In every major election cycle policy issues have more volatility, so politicians more narrowly consider their approach on major issues and carefully weigh the potential impact.

In the 2016 primaries expect immigration there is more pressure to take a Washington insiders who are Simultaneously, reform to continue to be a major issue. Every stance on issues, either through a vote, a floor aware of the remaining goals of speech, or the press. candidate will attempt to present their own unique and judicious solutions. The economy the President’s administration In a presidential election year, when the will remain a major issue – because of the weak have a lot to gain or lose in 2016. incumbent is retiring, there is always a major push job market and general lack of confidence within that party to achieve the unfulfilled agenda in the trajectory of the US economy by the of the President. average voter. Finally, expect that the perceived ability of a candidate to manage national security will be significant in winning voter confidence. How is TTIP currently perceived on the Hill and what do you think

the prospects are for the trade agreement after the elections?

To outside observers, the US presidential election system can appear rather arduous given the various caucuses, primaries and conventions as well as the electoral college. What are some of the key events for businesses to keep an eye on?

Yes, the US Presidential elections can get a bit complicated as it is a long, multi-stage process that really amplifies existing policy issues and can introduce new ones, sometimes unexpectedly. A lot of this might be noise early in the process, but the political discussions really begin to crystalise through the primaries and caucuses that move state to state to select a presidential nominee from each party. It’s actually a good barometer to gauge public opinions on issues and a bellwether in terms of what policy priorities might be in the next administration, regardless of outcome.

Party conventions are an interesting opportunity for engagement as these events concentrate on many political influencers at one place and time. And don’t forget the presidential nominees will already be

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Trade will continue to be a major issue in the US as many see new trade agreements as the driver to future economic expansion and growth.

The two parties have generally taken differing positions on trade and TTIP and it will be interesting to see how these pan out as the presidential race moves forward.

Elections aside, how have government relations in Washington evolved over the last decade and how do you see them developing over the next 5-10 years in the US in general?

Government relations in Washington, D.C. have dramatically changed due to the 24 hour news cycle and the public’s ease of access to policy information through the Internet. While a good thing, this dynamic can make it more challenging to obtain “good information.” Knowledge of the inner workings of political bodies is therefore vital, as businesses need to be able to react quickly to changing circumstances. Having 25 years of experience in Washington, I can say it’s now more important than ever to be have the right inputs for accurate, timely information and to be agile – particularly in a big election year!

www.babinc.org

Cover Story

Introducing Behavioural Microtargeting

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Alexander Nix CEO, Cambridge Analytica

The Future of Audience Engagement US ELECTIONS

The 2008 Obama victory set the standard for contemporary political campaigning. In its aftermath, political commentators were quick to praise the value of microtargeted audience engagement, and commercial brands were equally fast to start looking for ways to leverage their consumer data in order to improve Customer Relationship Management (CRM).

First used at scale in the 2014 US midterms, Behavioural Microtargeting™ helped win several state and national senatorial races, and dramatically increased awareness of key electoral issues including national security and economic stability across the United States.

57% 39%

But just having a lot of data isn’t enough. Big data only becomes useful when you can see the patterns within it that reveal the true make up of the people you’re trying to engage. Crucial differences in the behavior and attitudes of target audiences may be hard to spot in large data sets, but they can be the difference between failure and success for political campaigns and commercial services.

By combining predictive data analytics with pioneering research in psychographic profiling, Cambridge Analytica uses an approved methodology called Behavioural Microtargeting™ to provide marketers and campaign teams with the data-driven insights they need to punch through the noise of an increasingly crowded media market.

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I’ve used their product, and it’s better than anything I’ve ever seen – Ted Cruz for President

”

Working with large data sets, we are able to identify behavioural drivers by mapping individuals on up to 5000 data points. Cambridge Analytica’s methodology can help you understand why people who look the same act differently, and why people who seem completely unconnected can actually be very similar.

Are they more interested in new ideas or traditional values? Do they respond better to a hard or soft sell? Will they want the same thing from you again and again or will you need to offer them something new to keep their attention?

Identifying and leveraging these differences within the political realm is important because every candidate, every race, and every campaign is unique.

The days of broad subject messaging and simple geographic and demographic targeting are long gone. Knowing how prospective supporters, donors and volunteers think and behave over time lets you craft engagement strategies that appeal directly to them and drive actions that you want them to take.

By combining vast data sets of demographic, consumer and lifestyle data alongside advanced psychographic analysis of key personality traits, like openness to new experiences and conscientiousness, campaign teams and businesses can create rich, granular and highly targetable audience groups.

www.babinc.org

MESSAGED

CONTROL

“

Uplift in issue awareness among key Bolton Super PAC target groups

MESSAGED

CONTROL

Uplift in issue ranking across all Bolton Super PAC target groups

I t’s something that no one has done in politics. Period. It was the most costeffective, efficient way to reach voters.

We were very pleased – Bolton Super PAC

”

Now companies in the US, UK and beyond who want to improve relationships with their customers while simultaneously growing their consumer base are starting to use this new product in the commercial world.

The potential applications for this kind of deep audience insight stretch across the whole consumer cycle, from customer acquisition to retention and overall experience.

By identifying the hidden behavioral patterns and triggers that drive decision-making, companies are able to accurately predict what customers want today and tomorrow so they can build products and services that anticipate these needs.

Similarly, by understanding the key differences within their target audiences, highly individualised engagement strategies can be created that resonate with people on a personal level, improving business-tocustomer relationships.

Cambridge Analytica’s methodology also powers more cost effective campaigns. By only showing selected messages to key audience groups they are most likely to respond to them, and spend and waste is minimised while impact and conversion rates are optimized.

From helping raise awareness of key issues in political races to showing brands how to spot and fill gaps in their purchasing cycles, Behavioural Microtargeting™ is revolutionising the way conversations are held and relationships are built with voters and customers.

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Feature

Meeting John Simmons

Minister Counselor For Commercial Affairs, US Commercial Service INTRODUCTION

John Simmons

John.Simmons@trade.gov

John Simmons is a career member of the United States Senior Foreign Service. He began his current assignment as the Senior Commercial Officer at the US Embassy in London in August 2015.

From 2011-2015 he was stationed at the US Embassy in Abu Dhabi, United Arab Emirates, where he served as the Regional Senior Commercial Officer for the Gulf. Here, John was responsible for coordinating commercial programs with US Embassies in Kuwait, Oman and Qatar, in addition to UAE operations in Abu Dhabi and Dubai.

Previously, he served as the Senior Commercial Officer in Pakistan (20102011), overseeing commercial offices at the US Embassy in Islamabad and the US Consulates in Karachi and Lahore. John also served a three-year tour as the Senior Commercial Officer in Lima, Peru (2007-2010); as well as Commercial Officer positions at the US Embassies in Hanoi, Vietnam (2003-2006), and Tokyo, Japan (1999-2002). Additional assignments have included the US Export Assistance Center in Long Beach, California and in Washington, D.C. with the Office of Japan Trade Policy and the Office of South Asia.

John holds a B.A. in Political Science from the University of California, Santa Barbara and an M.A. in International Affairs from the School of International Service at American University, Washington, D.C. I am delighted to have recently taken up my new assignment as the Minister Counselor for Commercial Affairs at the US Embassy in London.

Having previously served in East and South Asia, the Middle East and Latin America, I look forward to the challenges and opportunities of working in a new region.

I welcome equally the opportunity to work “with BritishAmerican Business (BAB) and its

members. Collaboration with business chambers is a lynchpin of our commercial strategy when operating in international markets and I hope to build a strong relationship with BAB during my tenure in the UK.

”

In the coming months there will be a range of issues on which collaboration between BAB and the Embassy will be important. We will continue to support efforts to conclude the Transatlantic Trade and Investment Partnership (TTIP). As officials meet in Miami during

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October for the 11th round of TTIP Negotiations, it will be important that we diligently make the case for TTIP’s relevance to our companies and workers, particularly within the SME community. We are also working with companies to understand the impact of – and respond appropriately to – the UK Government’s proposals to limit skilled nonEuropean Union migration through changes to the UK’s Tier 2 visa category. We would welcome the views of BAB members on this topic.

My office will also remain focused on initiatives designed to expand bilateral commercial activities.

“

Over just the next quarter, we will bring some 200 American companies to the Defense and Security International Exhibition (DSEI).

We will host an equal number of US exhibitors at London’s World Travel Market exhibition in November; and we will take a delegation of UK start-ups to the United States to facilitate new business ventures.

”

In other areas, and of particular relevance to many BAB members, efforts are ongoing to facilitate eased business travel to the United States. As many of you are aware, relevant US Government agencies are engaged with their UK counterparts in discussions regarding the possible establishment of pre-clearance facilities at UK airports, with Manchester and Heathrow currently being viewed as potential initial sites. Preclearance allows travelers to conclude all immigration, customs and agriculture inspection requirements, as well as TSA formalities, before boarding aircraft bound for the United States. Upon arrival in the US passengers by-pass any further screening procedures, disembarking as would those traveling on domestic flights. Last year, the United States welcomed almost four million UK travelers, including over 10,000 students enrolled in our universities. For these travelers, and especially for the estimated 120,000 UK residents who visit the United States four or more times a year, pre-clearance should provide tangible benefits and will hopefully encourage expanded business ties.

In working on these and other topics, I look forward to forging a close and productive relationship with BritishAmerican Business and its members in the coming months and years.

www.babinc.org

Feature

What Does Leadership Look Like?

Sir Martin Sorrell, CEO of WPP and Chairman of the BritishAmerican Business International Advisory Board INTERVIEW

Sir Martin Sorrell founded WPP, the world’s leading advertising and marketing services group in 1985 and has been chief executive throughout.

WPP companies, which include some of the most eminent agencies in the business, provide clients with advertising, media investment management, data investment management, public relations and public affairs, branding and identity, healthcare communications, direct, digital, promotion and relationship marketing and specialist communications services.

Collectively, WPP employs nearly 175,000 people (including associates) in over 3,000 offices in 110 countries. The Group’s worldwide companies include BritishAmerican Business members such as J. Walter Thompson, Young & Rubicam, The Brand Union, Finsbury. BursonMarstellar, Millward Brown, and Hill+Knowlton.

We were delighted to sit down recently with Sir Martin Sorrell to discuss the important topic of leadership. He responded in his well-known straightforward style:

What does effective leadership look like to you?

It’s not really for me to pontificate, but I would say, if pushed, that effective leadership revolves around establishing a clear and simple strategy and implementing it – and, of course, communicating it.

Who is the one leader (corporate, government, etc.) that has inspired you recently?

I don’t know about recently, but I would say my Dad, Lord Weinstock and last, but not, least Sir Jules Thorn. None of whom will be known to you.

What does WPP do to encourage leadership and risk-taking across its global network of varied brands?

That’s a difficult one in the sense that our clients have become very short-term because of tepid economic growth, low or no inflation and, therefore, little pricing power and the consequent focus on cost. Having said that, because our major investment is in people, that is $12 billion a year out of $19 billion of revenue, our investment is in talent or human capital and the payoff from such investments is fairly rapid. That’s to say you know pretty soon whether somebody is working effectively or not and it doesn’t take a long gestation period.

The nature of our business is such that the investments are longterm investments, which pay off, or should pay off, in the short-term.

Having said that, it’s still difficult in the current environment to focus on the long term when your clients are focusing on the short term. For example, in 2014, dividends and buybacks for the S&P 500 exceeded retained earnings. No need to say anymore.

www.babinc.org

How do you and WPP identify and encourage and form new leaders? Are leaders born or made?

I think leaders are both born and made. Obviously, there are some people who are better at it than others, but I think it is true to say that you can develop an environment which encourages leadership and growth. We continuously review our top people. Not just our top people maybe, but even people at the so-called “medium” and “lower” levels. We have Fellowship programs and training programs like “The X Factor,” for our female leadership, which encourage diversity and growth of a diverse population. Of course, we have, increasingly widespread training opportunities. For example, our advertising schools in China and now India.

What is the big global issue that you think is in desperate need of better leadership from the business community?

The focus on the short-term. i.e., start to focus on the long-term. Clear and simple.

What kind of leadership was required of you to turn WPP into the premier marketing and communications parent company in the world?

That’s for others to say. The only comment I would make is that when we started WPP with two people in one room in 1985, our objective was to build a major multinational marketing service as a company.

Thinking of your most difficult leadership strategy for the past year, what did it teach you, if anything?

One of the most difficult challenges that we have is the technological challenge. There are two buckets of challenges, really. One is geographical, which is reasonably easy to analyse and respond to – e.g. Vietnam, Myanmar, Cuba or even potentially, now Iran. The technological bucket, however, is very difficult. How will we be disintermediated? Will we be disintermediated by two people in a garage? It pays to be paranoid and that’s what you would focus on.

How is WPP leading the way in terms of sustainability, diversity and corporate social responsibility?

We are taking a lead, I am proud to say. Just look at the reports we produce each year. In additional to our “standard,” multi-award-winning annual report, we have our sustainability reports. They show first what we do for our communities for the 112 countries that we operate in and then, secondly, what we do with our clients for people in those countries. We lead by example.

What advice do you have for the next generation of corporate leaders?

Learn Chinese and code.

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Feature

Transfer Pricing: An Evolving Problem TAX PROFITS

HM Revenue & Customs (HMRC) challenges to transfer pricing (TP) policies generated extra tax demands of £1.1 billion last year alone. Much of that came from the Large Business Service that handles many wellknown multinational businesses, but over £300 million came from Small and Medium Enterprises (SMEs). So if transfer pricing wasn’t on your agenda, it should be.

Technology is reducing the significance of national borders. With a rising awareness of TP issues continuing among tax authorities, many are increasing efforts to defend (or grow?) their tax bases.

TP rules exist to ensure that transactions between related parties are carried out at arm’s length prices to prevent companies from manipulating their profits and, by association, their taxes. The volume of cross-border intercompany transactions is growing rapidly, and identifying “correct” transfer pricing is increasingly complex.

So what should we do?

Complying with the varying requirements of more than one tax jurisdiction is complicated, time consuming and fraught with risk; the average time to settle a TP enquiry with HMRC is more than two years.

HMRC has been given significant additional funding in this area, and the specialist group that examines TP within multinationals has secured an extra £5.8 billion in tax since it was established in 2008.

Given this, it’s crucial that companies have a suitable up to date TP strategy and robust documentation. Anything more than two years old is likely to need reviewing and updating.

Historically the Internal Revenue Service (IRS) was intimidating enough that many US businesses (or non-US companies whose international reach extended only into the US) paid scant attention to other national rules, assuming that keeping the IRS happy would be sufficient for all other purposes.

According to Kari Ritz Thiessen, TP Leader at our US partner firm (eksh.com), the IRS has already been aggressive in developing antiavoidance rules.

While the US doesn’t defend stateless income, it’s unclear whether the OECD’s BEPS (Base Erosion and Profit Shifting) and country by country reporting will do anything to increase the European tax base (to which the US will certainly be opposed).

What is clear is that it will lead to increased transparency, more tax disputes, differing and more costly TP strategies such as Advance Pricing Agreements (APAs), and additional TP personnel.

The US continues to defend the idea that transfer pricing should be a reflection of the arm’s length standard, and supports proposals for taxing

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Melissa Christopher

Partner, Tax Advisory & Global Expansion, Fitzgerald and Law

Kari Thiessen

International Advisory Group – Transfer Pricing Leader, EKS&H

profits in low tax jurisdictions over a change to the TP rules. US buy-in will be necessary and have consequences on the broader adoption of BEPS recommendations to ensure global consistency.

The lead role of the UK in reforming the framework is the introduction of BEPS and the rushed (or rash) introduction of the Diverted Profits Tax (DPT) have all raised the UK’s profile in terms of global tax - not always in a positive way.

Arguably, the rules themselves are not the problem – adherence, enforcement, and consistency across borders is actually where attention should be focussed.

What does the future hold?

Hopefully by 2020 a new framework will be in place that’s agreed on by most, if not all, tax authorities. Until then, there will inevitably be some inconsistencies. The UK’s introduction of DPT appears to have a far wider reach than was intended. Sometimes referred to as the “Google tax”, DPT applies a 25% tax (the current UK corporation tax rate is 20%) on profits diverted from the UK to other countries. The tax is initially calculated by HMRC and must be paid within 30 days, but appeals can only be made much later.

The UK has historically not attempted to become a tax haven or to compete with the low tax rates of its neighbour, the Republic of Ireland.

We have proudly held ourselves high as paragons of consistency, clarity, and fairness within our tax system. There is now a perception that this is false.

Undoubtedly, our understanding of how DPT will be implemented and treated elsewhere, whether more countries will follow, and how the BEPS work will be concluded, will all become clearer in the ensuing 2-3 years.

Where does this leave us?

Unquestionably, enterprises of all sizes should take ongoing advice from those with knowledge of, and experience in, the relevant markets.

We hope we’ll end up with a common sense, consistent and arm’s length principle that will allow us to continue to trade across borders without drowning in administration, ambiguity, and a fear of the high-powered tax authority.

F&L’s Melissa Christopher is a tax and global expansion expert, helping American companies setup in the UK. EEKS&H’s Kari Thiessen is a US transfer pricing and global expansion specialist based in Denver, Colorado.

www.babinc.org

Industry Insight

Building a Digital Platform to Support European Smart Cities SMART CITIES

Across the region, cities are racing to make themselves ‘smarter.’ Aiming to improve the future quality of life for their citizens, councils and governments are hard at work on a range of projects that will shape urban centres for decades to come.

These projects are taking many forms. Some focus on transportation strategies while others look at issues such as waste management, high-speed networks, commercial buildings, and housing. Together, the projects are supporting a larger vision – a platform for a smart city.

To work effectively, such a platform must connect all the components and projects that make up the overall smart city vision. These could be anything from sensor networks monitoring roads to green energy generation plants on rooftops.

Using the platform to share data between different systems means a smart city can become even smarter over time.

Traffic control signals can change based on the number of cars on the road, buildings can alter power consumption based on weather patterns, and citizens can have ready access to information and government services.

By Ricky Cooper Vice President, EMEA & APAC Digital Realty

To encourage the trend, the European Union established the European Innovation Partnership on Smart Cities and Communities. This initiative was designed to foster big ideas that could help large cities across the region reach their smart and green energy goals by 2020.

Some cities are setting their own objectives and timelines for creating smart ecosystems. For example, in Vienna, the city council is encouraging the creation of community-funded power plants. Solar panels located in solar power plants can be ‘purchased’ by residents with an agreed rent then paid back against their power bills. The city-owned energy provider Wien Energie has a goal of producing 50 per cent of its energy requirements from renewable sources by 2030.

Meanwhile, Barcelona has captured global attention with its BCN smart city and 22@Barcelona initiatives. The city is investing heavily in everything from transportation systems and public infrastructure to payment systems and health services. Part of the plan involves a push to encourage a shift to electric vehicles in the city. The Council is investing in electric taxis and buses and has established a network of 300 free public charging points for private cars.

At the same time, London is progressing with its Smart London Vision. This comprehensive plan tackles ways in which the city can cope with an estimated increase in its population of one million people during the next decade. Part of this plan involves innovative approaches to the use of energy in the city, such as re-using waste heat from underground shafts and electricity sub stations.

ntic a l t a s n al Tra ce 2016 u n n A BABC ss Conferen le, Social Busine s – Smart, Susta2in01a6b th Citie Future May 11th – 12 , London tN Hosted a

ews UK

r t, s – Sma it ’s ie it C e r nd tu e on ‘Fu her the BABC a UK c n e r e f ar’s con g toget erica and the Next ye ocial’ will brin king th Am S oss Nor thought provo able, r c in a a s t r s e u f S pt ive cha amme o l networking respect ference progr e v le n igh . for a co ussions and h eld in London c h s dis ie it un opp or t n visit formatio ents in e r o For m rg/ev abinc.o www.b www.babinc.org

We can expect to see many more such initiatives being adopted by cities throughout Europe and around the world in coming years. As smart city platforms evolve, the promised benefits for citizens will become tangible.

The lifeblood of a smart city platform is data. From sensors, devices and citizens, this data is vital for the success and positive impact of all the interconnected systems.

Naturally, the vast amount of data generated by a smart city needs to be managed, stored, and processed within a digital centre ecosystem that is future proof and has access to low latency networks and robust cloud platforms. For this reason, purpose-built connectivity-rich data centres are an essential component within the platform of every smart city as they will support the myriad of activities that go into taking a smart city from a concept to a reality

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Industry Insight

Cyber Security: A Real and Present Danger CYBER SECURITY

The number of detected cyber attacks skyrocketed in 2014 to 42.8 million – 117,339 attacks each day – up 48 percent from 2013, according to consulting firm PWC. The types of incidents range widely both in cause and location. From an insurance claims perspective, we now receive over two notices per business day on a global basis with an increase in cyber extortion claims as criminals look for more ways to monetise their exploits. In addition, the rise of the “internet of things” and the reliance on third-party cloud providers means that a host of devices connected to the internet are now exposed to new types of risk, which could increase the number of business interruptions.

Despite this, many organisations have an inadequate knowledge and understanding of the issue. The cost of a breach can be high. Typical costs include notification costs, experts to control the damage, costs of credit and ID monitoring, investigation costs, third party liabilities and regulatory investigations along with industry fines and penalties.

However, the threat of lost income stemming from systems failure either from security failures, attacks or viruses, or that might have come about internally – for example a patch that failed – is increasing. More firms are using off-site Cloud services for their business operations or rely heavily on outsource services providers, and in the event of a cyber incident, these firms could suffer significant losses with critical services being unavailable.

By Mark Camillo

Head of Cyber, EMEA, AIG

There are some interesting regional differences in terms of risk awareness. In the US, the states’ requirement for the notification of data breaches means that companies are more aware of the potential costs and liabilities arising from them. In the EU, businesses are more focused on business interruption, although this may change with the proposed reform to the Data Protection Directive.

Regardless of location, there can be no doubt that cyber liability is an issue no organisation can afford to ignore. The solution lies in risk managers working together with industry professionals to understand the company’s risk profile so that it can get the best cyber protection programme available in the marketplace.

Brits Abroad: Five Reasons UK Businesses Should be Exporting UK EXPORTS

By Trevor Hoyle

Vice President, Northern Europe Operations FedEx Express

Over the last year, exporting small to medium sized enterprises (SMEs) have gone from strength to strength and the rise in value of British exports to outside Europe, including the US has risen 20%1. There is a real sense of positivity and while British SMEs are tending to export farther afield than a year ago, the majority continue to trade with Englishspeaking countries rather than high-growth markets. 35% of exporting British SMEs do so to the US2 but for some smaller businesses, concerns do remain.

Our Great British Export Report 2015 showed, despite the current UK activity in the US market, it is still perceived as one of the most challenging markets to enter, alongside Australia and China. 58% still feel they need more support to go global3, however, many analysts argue there hasn’t been a better time for UK businesses to look to foreign shores.

Here are five reasons why it should be considered: 1 Britain is on-brand. Britain’s international reputation is riding higher than ever, with ‘Brand Britain’ and its quality products in high demand. It is a very good time to be a British brand abroad, and to export further afield.

2 There’s a world of opportunity. The UK’s population is equivalent to 0.88% of the total world population4 and to reach the remaining 99% of the world, we have to encourage exports. Driven by the internet, small businesses have the potential to capture this global customer base.

3 Exporting partners are expanding their footprints. Many businesses believe they lack the in-house skills and knowledge to export, but businesses should consider taking advantage of global-facing logistics organisations, who are well-versed in assisting in this area.

4 E-commerce is booming. The UK has become the second-most popular shopping destination for five key markets across the globe: US, China, Germany, Australia and Brazil5. Next-day international delivery allows businesses to remove the geographical and time limitations to entering overseas markets.

5 Technology is making exporting easier. Technology is transforming exporting. Having the right paperwork in place is essential, and your logistics partner should have online tools which can help you manoeuvre customs easily.

www.babinc.org

See Footnotes p25

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24 flexible function suites 60 syndicate rooms with pitch views Millennium & Copthorne hotels with 281 rooms A choice of onsite restaurants and bars State-of-the-art music venue; Under the Bridge Onsite parking for 180 cars Luxury health club and spa

To speak to a member of the events team, call 0871 984 1955 or email events@chelseafc.com

Industry Insight

Sustainability Materiality and Changing Business for Good The principles of materiality are helpful in sustainability strategy planning. They’re helpful for organisations that are new to setting a sustainability strategy as it provides a framework. And they’re also helpful for those organisations that are already on their sustainability journey as it can provide some credibility to the strategy and keep it relevant.

The trick is to not get too bogged down in the detail and find a process that works for your organisation.

MATERIALITY

So wherever your organisation is on the sustainability spectrum, where to start? First off, trust your instinct. You know what your organisation’s environmental and social impacts are. At Virgin Atlantic we know that our biggest environmental impact is the greenhouse gas emissions from flying our aircraft, so that’s where we focus our efforts: buying new fuel efficient aircraft and pioneering new sustainable fuels. Your greenhouse gas inventory will hold one answer. For social impact, we focus on noise mitigation and community investment in some of the destinations we fly to. These priorities may seem obvious for an airline; no one said sustainability materiality had to be difficult.

The next step is to ascertain what your stakeholders think. What’s important to them? This outreach can be as big or small as required, depending on whether you’re starting out or doing a strategy refresh. The results may or may not surprise you…

But materiality doesn’t have to be just a risk management approach. There are lots of opportunities out there to change things for the better. As a consumer-facing brand, we recognise the value in addressing things that our customers directly experience. For example, we ensure that the food and drink we serve is ethically sourced, and we’ve incorporated recycled content into our cabin crew’s uniforms. This gives us the opportunity to engage with our customers and bring sustainability to life.

By Sian Foster

General Manager, Government & External Relations, Virgin Atlantic Airways

The success of a sustainability strategy lies in buy-in from your leadership team or board and their commitment to embed it into the organisation. The materiality assessment will help define the priorities and how you communicate with your internal and external stakeholders.

Customers are increasingly expecting organisations to be values-based and before everyone realises that sustainability and changing business for good makes complete business sense, use it as a brand differentiator.

Smart Nutrition Makes Good Business Sense I challenge you to find anyone who hasn’t heard about the benefits of clean eating and clean living. What looks good on the outside – vibrant green leaves, sunshine oranges, and bright red berries on our plate – feels good on the inside. But is it another leisurely food fad? I’m not sure it is. Clean living translates not just to how we live, but how we work, and there’s nothing leisurely about it. In the fast-paced ‘work-hard-play-hard’ lifestyle of today, the mental demands of balancing our lives at work and at home mean we need to be focused and energised nigh on 24/7, conscious that what we eat and drink can affect how we think, perform and behave during the day just as much as getting a good nights’ sleep in anticipation of the next.

SMART NUTRITION

Food provides us with energy, stamina, endurance and the clear thinking we need to work effectively if it’s healthy, balanced, and nutritious. The connection between nutrition and brain capabilities has been illustrated by numerous studies. A recent study published in the Journal of Neuroscience, showed eating a small portion of antioxidantpacked blueberries every day improves the ability to learn and short-term memory and can result in reversal of nerve cell damage.

By Simon Hunter

Head of Venue and Brand, Chelsea Football Club

STAMFORD BRIDGE

www.babinc.org

Food and drink has moved firmly up the rankings in the selection criteria for booking meeting venues – it’s not just value based on price and location, but more importantly, the value of what they eat on the body and mind. We’ve added more oat-based dishes, seeds, and fresh fruit in our menus to deliver a slow release of energy and nutrients that can lower blood pressure, increase blood and oxygen to the brain, keep metabolic rates at a steady pace all day, and boost cognitive function.

Gone are just simply the deep fried lunch options of meeting venues of old – dishes such as omega-3 salmon with sesame seeds and broccoli are rich in brain strengthening magnesium and antioxidants which can help to deliver that all-important clarity of thinking. It’s clean eating for clean living, at work and at play. Seems like the perfect balance to me.

STAMFORD BRIDGE

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Culture

What Businesses Can Learn From The Arts

By Nicholas Selman, Director of Development, London Symphony Orchestra LSO was watched by more than 4 billion people when it performed at the Opening Ceremony of the London Olympics, led by Simon Rattle and ‘conducted’ by Rowan Atkinson’s Mr Bean. The LSO returns to the USA at least once a year and in October presented two high-profile concerts at the Lincoln Center. Events like these provide a key platform for international businesses who wish to build their brand, host clients, and be seen supporting a world-leading arts organisation.

Sir Simon Rattle, incoming Music Director of the London Symphony Orchestra

In changing financial and political climates the arts have come to play a growing role as a ‘soft power’, serving as important ambassadorial representatives for ‘Brand Britain’ on the global stage. Businesses have reported that it has become more difficult, as well as increasingly expensive, to cut through into the marketplace and get to hard-to-reach customer segments. Arts organisations have led the way in offering new solutions to these evolving business needs.

As one of the UK’s leading creative forces, the London Symphony Orchestra (LSO) is an example of how the arts can showcase the very best of British excellence, ambition and success. The LSO has crossed the Atlantic countless times, establishing strategic partnerships and loyal audiences in the United States and around the world, performing throughout the year in key international markets that include China, India, South Korea, Hong Kong, Russia, Japan, Australia, and Europe.

The LSO’s role as an ambassador for Britain began in 1912 when it became the first British orchestra to visit America. On that historic tour, the LSO had tickets to travel on the Titanic but an incident on one of her sister ships meant the Titanic’s maiden voyage was delayed. The LSO had to choose between sticking with the Titanic and delaying the start of its tour or leaving on the replacement ship, the Baltic. Choosing the latter, they arrived in New York safely, but soon heard of the disaster that befell the Titanic.

The Orchestra has since gone on to fly the flag for the UK not only in concert halls, but on other significant occasions. It has performed at the United Nations HQ in New York, in British Ambassador’s residences around the world, and

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An orchestra is an example of a community functioning at the highest level and the creative industries are uniquely placed to share a range of learnings with business. The LSO has worked with senior teams from leading corporate organisations, assessing core elements of the orchestra’s work and applying them to business scenarios. Nothing is more crucial to an orchestra’s success than teamwork, communication, and leadership. When executive teams and emerging leaders from the corporate world are brought into the orchestra, meet with musicians and conductors, and view rehearsals and performances, they see at close-hand the parallels and how lessons can be applied to their own business operations.

From its base in the City at the Barbican Centre, and across its international tours, the LSO has been able to provide business partners with strategies that leverage its position, networks, and activities. Increasingly for businesses, there is a wish to link back to the communities in which they work. For an arts organisation like the LSO, with extensive education programmes in diverse communities in East London boroughs, meaningful connections can be established.

Evidence now demonstrates the impact music has on young people, improving their attainment in maths, early language skills, and literacy.

Studies show that students from low income families who take part in arts activities at school are three times more likely to gain a degree than children who don’t. Participating in arts activities supports those who feel disconnected from their community, helping them feel accepted and connecting them with others beyond their immediate environment. This important work is a key part of the LSO’s activities, and the support received from the business community builds a different kind of loyalty for the corporate partner and sends a clear message about positive corporate citizenship.

The London Symphony Orchestra’s world-leading music education and community programme, LSO Discovery, works with 60,000 people each year.

There are many ways strategic alliances with the arts sector are delivering measurable benefits for both partners. The ‘creative economy’ is sharing its experience and expertise and providing credible and original solutions to changing business challenges.

www.babinc.org

Culture

The Other American President This Election could change everything in Argentina AUTHOR SPOTLIGHT

As the US election gets underway, another American presidential vote looms closer: Argentina’s. In a tour of countries for his book Frontier -acclaimed as a “must read” by the Financial Times – Gavin Serkin explores the potential for Argentina to take its place among the top ten emerging markets of tomorrow.

Traveling from Bucharest via Barcelona to Buenos Aires gives a feeling of faded Latin glory, and nowhere more so than in Argentina – swinging with the world’s ten wealthiest nations before its drift into progressively crazier economic policies.

The lunacy hits before you step foot in the country. This is the only immigration form where I have to state the mobile I possess and accessories. I faithfully declare my iPhone 5 and charger.

When it comes to buying pesos, I have a choice: swap $100 legally for 550 pesos or get a thousand on the street. It’s hard to avoid falling into crime.

In Calle Florida, the main shopping street, an official kiosk is void of customers. Within 5 meters a woman waves a calculator, calling “cambio.” Locals nickname them arbolitos, “little trees.”

A teenage arbolito spots me. He shows me his calculator and punches in 950. I shake my head, “mil.” He enters 980 and beckons me to a dress shop. He’s the broker; the woman with the dresses is the dealer.

The arbolito tells me how he loves British culture – he’s seeing the English 80s band Depeche Mode tonight and he’s a big fan of Monty Python. Around us, the Union Jack is a la mode on T-shirts and handbags – surprising for a nation whose populist president has been whipping up the idea of kicking the Brits out of the Falkland or Malvinas Islands.

It’s Saturday and the shops are packed with people spending money like it’s going out of style – which in Argentina, of course, it is.

The peso is crashing. Everyone’s been through this enough times to recognize the signs. Currencies are created, inflated and disbanded. A hundred pesos moneda nacional were replaced by a single peso ley in the 70s, then 10,000 peso leys by one peso Argentino, 1,000 peso Argentinos by an austral and 10,000 australes by a peso convertible.

By the early 90s, as inflation hit 20,000%, a single peso convertible – or ARS as the “Argie spot” is suitably known in the language of currency traders – equated to 10 trillion of the pesos used two decades earlier to buy a coffee President Carlos Menem’s economy minister, Domingo Cavallo, broke the pattern by making the peso convertible to the dollar. The exchange rate peg survived Mexico’s “tequila” crisis, Asia’s economic flu and the Russian debt default of the 90s.

But the currency’s strait jacket could only buy so much time without accompanying cuts in government spending. By the end of the decade, farmers were struggling to compete against Brazilian exporters benefiting from a plunge in the real. When President Fernando de la Rua came to power in 1999, Argentina was in recession and running out of funds to support the peg.

www.babinc.org

Gavin Serkin

Emerging Markets Editor-at-Large at Bloomberg News and the author of Frontier – Exploring the Top Ten Emerging Markets of Tomorrow (Bloomberg/ Wiley 2015, £29.99, Hardback ISBN: 9781118823736) Having shoveled billions in support, the IMF threw in the towel at the end of 2001, causing Argentina to renege on $95 billion of debt.

While Néstor Kirchner – becoming Argentina’s fourth president in two years in 2003 – managed to keep a lid on the peso, rising spending during his wife Cristina Fernandez de Kirchner’s presidency eroded the reserve of dollars. As the currency weakened further in 2011, Fernandez restricted dollars to those traveling abroad or importing.

To the wealthy, it was an invitation to scam. Argentines flew to New York or took the hour-long boat trip to Uruguay to draw cash on credit cards.

The most popular purchases were goods hardest to find back home because of import restrictions – like iPhones, fetching triple the cost in New York.

One economist in our run of meetings bought a car with borrowed pesos. The 20% interest rate was below the 30% inflation and 50% devaluation. A commodities trader was finding inner peace at a Buddhist retreat when “the ARS fell out of bed” in 2014. He’d bought soybeans on loan. They were gaining on Chinese demand as the peso tumbled.

By the time the government got around to closing the loopholes by slapping taxes on credit cards and purchases abroad, backed by controls like my immigration card, the roads were chock-a-block with German cars.

There have been many lunatic policies, reflects Lucha, a drama student who part-times as a city tour guide. By way of illustration, she leads a route past mothers begging on the steps of the Catedral Metropolitana to the beautiful mosaic floored interior.

A couple of years earlier, all of these hundreds of thousands of tiny tiles were individually broken off and cleaned, she says, shaking her head.

“They had nothing better to do.”

Investor Analysis: Adelante Asset Management’s Julian Adams on Argentina Bottom Line • Optimism is supported by the idea that all the bad things have taken place. The confrontational style that radicalized the country into pro-government and enemy camps has become unacceptable to the public.

• Argentina has experienced capital flight and disinvestment for the past decade, so if you have a half sensible government with orthodox and balanced economic policies then you should get a big return of capital, creating an investment-driven recovery.

• The low debt level would make it easy for Argentina to tap the capital markets and the bonds should trade with a low and very affordable interest rate.

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Forums

Workplace Talent A Balancing Act WOMEN’S FORUM

Yvonne Smyth

Director and Head of Diversity, Hays

The last 20 years have seen a significant change in the approach to the equality agenda. CEOs and senior management teams are now actively reviewing and implementing increasingly innovative ways to recruit, develop, and retain talented women.

The rationale for a more ‘enlightened’ approach can vary. Companies may seek to move women to higher positions to enrich decision making and leadership, to be beacons for their talent pipeline, or make a positive statement to employees, customers, clients, and investors.

But, in an era where talent, competence and skills continue to be in short supply, companies taking positive action surely stand to reap the advantage of a more complete and diverse skills pool which can only be of commercial benefit.

The question of how many women will succeed – how long they will stay, how high they will climb, how completely they will fulfil their promise and potential – will be directly linked to the strategies and initiatives a company adopts that are designed to support women in the workforce.

Whilst times, and workplaces, are changing, issues can still arise when typical female socialisation values encounter the more typical male corporate culture of career development based on hierarchical competition. Factors that women cite as important for workplace engagement include: the ability to associate with respected peers and seniors, the opportunity to manage their own time, and a collaborative

environment and a culture of recognition. The absence of these ‘pull’ factors can create a ‘push’ factor and the draw of family and societal reasons to leave the work environment becomes greater.

When constructing an equality agenda, to actively recruit, develop, and support women in the workplace, the following could be considered a ‘best practice’ checklist for organisations embracing this challenge: 1 Committed top-down leadership programmes that facilitate women’s career and family roles.

2 Appointed career watchers and a network of buddies, mentors and sponsors to nurture and support talent and develop peer-to-peer learning.

3 Trainings around inclusive leadership and influencing factors such as unconscious bias.

4 Appointed active role models and communicate and promote true life stories.

5 Appointed leads for the equality, diversity and inclusion agenda.

6 Established policies to enable and support remote working flexible working and access to case studies.

7 Promoted internal and external ‘old girl’ networks that link women to inside power brokers and outside business players.

8 Return-ship programmes for women on maternity or caring leave.

In summary, many organisations are fully underway with programmes designed to continue to advance women in the workplace, others are earlier in their journey. But for all, the challenge of continuing to access the skills of our most talented human resources is not a luxury, but a business imperative. It is one that, if planned and supported well, will reap the value of its investment many times over and ensure businesses have the talent pool to succeed.

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www.babinc.org

Forums

Taxation Forum

An Update on One of our Key BritishAmerican Business Forums TAX

John Cater

Former Forums Programme Manager, BritishAmerican Business

“

The Taxation Forum provides a collegiate and productive environment supporting the UK-US business case for reform across the personal and corporate taxation regimes. The Forum represents BAB member views in a balanced and proactive fashion across the wide spectrum of taxation matters affecting transatlantic activity and global tax planning

”

Peter Badenhuizen, Chair of the BritishAmerican Business Taxation Forum and Partner, Deloitte The BritishAmerican Business Taxation Forum is a great demonstration of the BAB ecosystem in London. The Forum brings together British and American tax experts to chew the fat over coffee and breakfast whilst discussing the major taxation developments in the corporate and personal fields in the UK and the US. The Forum throws a spot light on issues that have fundamental implications for competitiveness on both sides of the Atlantic. It’s lively, well informed and senior.

A key trend of the last few years has been greater cross jurisdictional information sharing catalysed by Foreign Account Tax Compliance Act (FATCA) and efforts by governments and international bodies like the Organisation for Economic Co-operation and Development (OECD) to clamp down on base erosion. Both these trends are helping demonstrate their era of greater transparency and international cooperation. The fallout affects both corporates and individuals alike.

In this new era groups like the BAB Taxation Forum are absolutely crucial in ensuring new legislation is clearly thought out with business playing its part to work with policymakers to ensure the transatlantic economy remains prosperous and mutually beneficial to both the public and private sectors.

This piece for Network is my final one for BritishAmerican Business as I depart for new pastures at the Royal Mail. I have had a fantastic time working with BAB members through the Forum and Events programme in London over the last seven years. It has been a pleasure working alongside the various Forum Heads throughout that time and I’d like to give special thanks to my colleagues at BAB for their unflagging support in delivering a varied and stimulating programme of events that always kept the values of BritishAmerican Business at their heart. I wish my successor all the very best and look to hearing greatly about the Forums progress in years to come.

www.babinc.org

Purpose of the Forums BAB has a large and diverse membership committed to pursuing their transatlantic business priorities. This is achieved through opportunities provided by BAB networks and event platforms, sometimes in collaboration with other like-minded business-focused organisations.

The forums play a vital role in developing the networks, policies, themes, events and other activities that are a central component of BAB’s ongoing value to its members. Activities are grouped around three themes – Networking, Intelligence and Advocacy.

BAB has a unique, cross-sector transatlantic character that presents a strong basis for engaging with governments and advocating effective, evidence-based and strategic approaches to the wide range of regulatory challenges faced by transatlantic business on a daily basis. These challenges are both bilateral (eg between the UK or EU and the US), and also, increasingly, in the third country marketplace (eg other than in the US or the EU Single Market) as our members seek to find common cause in establishing a global level playing field for business.

As a network based on insights, expertise, and the cross-pollination of ideas, BAB Forums are also a catalyst for the valuable relationships that BAB seeks to nurture and sustain as intrinsic to its mission and heritage.

How to join the Forums Please contact at ukevents@babinc.org to join the mailing distribution lists for specific forums. You will receive invitations to attend the planning meetings throughout the year, minutes from each meeting and the opportunity to directly contribute to policy work and other initiatives.

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Policy

Policy World: What’s New? An update on our key policy work this Autumn INITIATIVES

Emanuel Adam

Head of Policy and Trade eadam@babinc.org Follow Policy on Twitter @BABPolicy

The importance of the transatlantic relationship requires policies that ensure that the transatlantic economy as a whole remains a sustainable and attractive destination for business.

BritishAmerican Business seeks to embed this approach in all we say to governments. Here are four areas that we picked out to place on the radar this Autumn:

Uber – A Disruptive ‘Transatlantic Success Story’ On July 22nd 2015, New York Mayor De Blasio dropped his plans to place a cap on the number of vehicles the car service company Uber operates. The decision must have been noted by Uber in London with some relief. In both cities (and elsewhere) Uber faces an often emotional resistance from City Halls and local cab drivers who fear the service undercuts fares and regulations.

With every ‘disruption’ there is a need to address its impact on existing rules and structures. London and New York as the most important Uber markets are likely to lead this process. Something we must not overlook when assessing the impact is that Uber is a transatlantic success story, offering an innovative and creative product; representing the continuing success of the transatlantic economy.

US-UK Immigration – Cutting a Vital Artery of the Transatlantic Economy There are so many US citizens living in the UK that it is hard to find exact numbers. For the US and the UK, migration is a pulsating artery in its successful economic relationship. With the UK’s efforts to cut nonEU immigration, this crucial element of our relationship is under threat.

Cutting the number of Tier 2 visas, in particular, will largely affect US skilled labour immigration.

No one denies the need for governments to deliver outstanding education systems for their nationals enabling them to compete and win higher positions in the labour market. Reducing foreign skilled labour as a consequence, however, is short-sighted. Businesses operating internationally often rely on foreign skilled labour that in the end creates new jobs. A sensible approach is needed that both recognizes the UK’s domestic objectives while ensuring the UK remains “open for business” and able to attract the best and brightest from around the world.

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UK Infrastructure – Fight for Additional Airport Capacity in the UK Will Continue On July 1st 2015, the UK’s Airport Commission released its final report clearly recommending a new northwest runway at Heathrow Airport.

Despite the Airports Commissions’ recommendation, opposition to the project may still delay progress.

In the lead up to a decision by the newly formed aviation committee, likely in the autumn, BAB will continue to work with the Prime Minister and key stakeholders to ensure the transatlantic voice of business remains strong on this issue. Further consultation will be required as part of the decision making process. So the fight for the desperately needed additional airport capacity in the UK will continue.

Investor State Dispute Settlement – Time for a New Approach?

ISDS, short for Investor-State Dispute Settlement, has become a major stumbling block for the TTIP negotiations. For proponents of the mechanism, such as BAB, an (improved) ISDS system is an integral part of the agreement. ISDS provides a non-political, independent and fast way to resolve disputes and a TTIP without ISDS would make it much harder to include it in future agreements with other states.

There are signs, however, that only a substantially changed system can be successful in the long term. In July 2015, an EU Parliament resolution even asked for a “new system” that would replace ISDS. New ideas and solutions are needed that help negotiators to agree on something that will find approval in Parliaments. One of the big questions in the process may be whether, in a world where we hope will see ever increasing investment flows, we need a stronger public interest to guarantee when states resolve dispute with investors? Maybe a good time for a new approach for business.

If you are interested in engaging and in receiving regular policy updates, please get in touch with BAB’s policy team at policy@babinc.org and follow us on Twitter @BABPolicy.

www.babinc.org

Event Highlights

LONDON

Summer Networking Reception at the Sky Bar, Grange Hotel St Paul’s Sponsored by Taylor Made Computer Solutions and Hosted by Grange Hotels On Tuesday July 7th the BritishAmerican Business annual summer networking reception took place at the Grange Hotel’s Sky Bar. Members enjoyed an evening of networking, drinks, and canapés in the rooftop bar and outside terrace with spectacular views overlooking St Paul’s Cathedral.

Women’s Forum: An Evening with Dame Fiona Woolf CBE: “The Squeezed Middle” Sponsored by Hay and Hosted by Orrick Herrington & Sutcliffe On Tuesday June 16th Dame Fiona Woolf CBE, Senior Partner at CMS Cameron McKenna and Lord Mayor of London in 2013/14 spoke at our most recent installment of the Women’s Forum. Dame Fiona spoke about the importance of the role that middle management plays in the progression of women in the workplace which was followed by a networking drinks reception.

www.babinc.org

SME Forum: Can the UK take the US crown when it comes to producing entrepreneurs?

Hosted by EY On Wednesday July 1st a panel of speakers including Lord Digby Jones, Former Director General CBI, discussed the US and the UK’s differing approaches to building a strong environment for nurturing entrepreneurial spirit. Topics discussed included financial support, education and talent, tax and regulation, government support, and national culture.

Summer Reception Hosted by Deputy Chief of Mission of the Embassy of the USA Sponsored by Lockheed Martin and Wells Fargo On Thursday June 4th we were delighted to invite BritishAmerican Business members to a reception held at the Deputy Chief of Mission’s official residence at Wychwood House in Kensington.

Guests enjoyed an evening of networking with complimentary drinks and canapés served in the beautiful garden.

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Event Highlights

Annual Corporate Citizenship Awards Dinner 2015 LONDON

On Wednesday June 10th 2015, BritishAmerican Business London presented Dan Glaser, President and CEO of Marsh & McLennan Companies and Steve Holliday, Chief Executive of National Grid with our Annual Corporate Citizenship Award in recognition of their exceptional commitment to corporate social responsibility. Guests enjoyed a welcoming drinks reception in the courtyard of Merchant Taylors’ Hall followed by a three course dinner in the historic hall where the awards ceremony took place.

Above: Steve Holliday networks with other guests over drinks in the courtyard of Merchant Taylors’ Hall

Above: Tamara L. Lundgren, Chairman, US Chamber of Commerce addresses guests seated at dinner

citizenship is needed now more than ever in a challenging business landscape. Through engagement “ Corporate

in BritishAmerican Business, we help drive innovation and create solutions to the issues of our time. It is a privilege to be recognized by this distinguished organisation for our contributions to corporate citizenship.” wish to express my gratitude to British American Business for honouring me with the Corporate Citizenship “ IAward.

I am tremendously proud to receive this Award especially in the year that National Grid is named as UK Responsible Business of the Year. I am delighted to be joining the illustrious list of BAB Award alumni.”

Dan Glaser, President and CEO, Marsh and McLennan Companies

Steve Holliday, Chief Executive of National Grid

Aon

Barclays Citi PLATINUM CMS Cameron McKenna LLP SPONSORS Deloitte

National Grid

Marsh & McLennan Companies

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With thanks to our sponsors GOLD Ascot Underwriting SPONSORS Norton Rose Fulbright

Above: Sir Simon Fraser presents Dan Glaser with his BritishAmerican Business Corporate Citizenship Award

Hiscox KPMG Mercer SILVER

Wells Fargo SPONSORS Zurich

City Year

Special Olympics

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Event Highlights

NEW YORK

Briefing with David O’Sullivan, EU Ambassador to the US Sponsored by KPMG and Zurich Insurance

The New Norms of Business in China Sponsored by The Mintz Group A highlight of the New York events calendar was an exclusive roundtable on trends for businesses operation in China. Leading the discussion was Randall Phillips, who heads their Beijing office and was formally the Chief CIA Representative in China.

Attendees discussed the regime’s new attitude towards corruption as well as specific “how-to’s” for ensuring due diligence in China.

The new EU ambassador to the US journeyed to New York to address members and update them on the sovereign debt crisis and free trade negotiations. This evening programme gave members the chance to ask questions of the ambassador and get the most up-to-date and accurate read on the European markets.

An Evening of Opera at Paul Stuart In partnership with the Italy-America Chamber of Commerce

Exclusive Cyber Security Roundtable Sponsored by BAE Systems Applied Intelligence

Our members enjoyed a stylish evening at Paul Stuart’s flagship store on Madison Avenue. While guests enjoyed drinks and networking, they were also treated to a live performance of several opera arias by Anita Rogers of member company British American Household Staffing.

Our roundtable of high-level security and IT executives met to discuss current cyber threats, response techniques, and strategies for engaging corporate leadership in defensive planning.

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Event Highlights

BABC CONFERENCE

NEW YORK HOSTS ANNUAL BABC TRANSATLANTIC CONFERENCE NEW YORK

The Innovation Imperative Strategy Technology Growth In May, BritishAmerican Business in New York hosted the annual transatlantic conference for British-American Business Council, welcoming local members and those from chapters in the UK and the US. This sell-out Conference brought members of the BABC’s 20 chapters together to share business insights and develop new business relationships through a high-level program of panel discussions with industry-leading CEOs and innovators and of business networking with other senior executives from throughout the US and UK.

The business programme featured leaders from companies such as BAE Systems, Barclays, The Boston Consulting Group, BT, Delta, the Economist, Johnson & Johnson, JWT, LinkedIn, Mastercard, Russell Reynolds, Tata Consultancy Services, Thomson Reuters and Virgin Atlantic Airways; and the social program included cocktails and dinner on a private yacht as it toured the New York Harbor and a Reception at the Residence of the British Consul-General in New York and Director-General of UK Trade & Investment for the USA. The highlight of the conference was a keynote interview with Ed Bastian, President of Delta Air Lines, and Craig Kreeger, CEO of Virgin Atlantic Airways.

“This Conference was a fantastic opportunity for high-level business networking and learning,” said Steve Allen, BABC President. “I made some great business connections and picked up many valuable business insights, and am sure that all the other participants did as well.”

The Conference was held on the top floor of the Thomson Reuters building in Times Square and was sponsored by Delta Air Lines, Virgin Atlantic Airways, The Boston Consulting Group, Deloitte., BAE Systems Applied Intelligence, Berkeley Research Group, LLC, Future Foundation and Tata Consultancy Services.

Sponsors Title Sponsors Delta Air Lines Virgin Atlantic Airways Underwriter The Boston Consulting Group Innovator Deloitte

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Discovery BAE Systems Applied Intelligence Berkeley Research Group Supporting Tata Consultancy Services

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Events Calendar LONDON

October

December CEO Roundtable with Dame Helen Alexander Tuesday 20th October 2015 12.20pm – 2.30pm Hosted by Deloitte

Open For Business: What TTIP means to the UK Automotive Sector Thursday 5th November 2015 10:00am - 1:00pm Sponsored by BT / UPS

CEO Roundtable with Richard Solomons, Chief Executive Officer of Intercontinental Hotels Wednesday 2nd December 2015 8.00am - 9.30am

BAB Rugby Breakfast Club Thursday 22nd October 2015 8:00am - 9:30am Hosted by AIG

Women’s Forum Annual Conference Wednesday 11th November 2015 8:30am - 1:30pm Sponsored by Hays and United Airlines

Annual Christmas Luncheon at the Dorchester Tuesday 8th December 2015 12.00pm - 3.00pm Sponsored by HSBC

Chairman’s Lunch Wednesday 4th November 2015 12.30pm – 14.30pm

Thanksgiving Reception Thursday 19th November 2015 6.30pm - 8.30pm Hosted by BT Tower

BABC Annual Conference 2016 May 11th - 12th 8.00am - 4.00pm Hosted by News UK

November

NEW YORK

November

October Transatlantic Business Awards Dinner Wednesday 7th October 2015 6.00pm – 9.30pm Hosted by The Pierre Hotel

Annual General Meeting and Reception Thursday 21st October 2015 5.00pm – 7.15pm Hosted by KPMG

Washington Insight Thursday 5th November 2015 8.00am – 9.30am Sponsored by Alston & Bird

Cyber Security Roundtable Wednesday 7th October 2015 6.00pm – 9.30pm Sponsored by BAE Systems

European-American Chamber of Commerce Fall Networking Cruise Thursday 22nd October 2015 6.00pm – 9.00pm

Fall Pub Quiz Wednesday 18th November 2015 6.00pm – 8.30pm Sponsored by The British International School of New York

December Oktoberfest for Business Thursday October 15th 2015 Hosted by Work Better

Business Briefing: The Key Talent Challenges Tuesday 27th October 2015 8.00am – 9.30am Sponsored by ACCA

Annual Christmas Luncheon Friday 11th December 2015 11.30pm – 3.00pm

To view both London and New York’s full events calendar online please visit www.babinc.org/events or contact us for more information at ukevents@babinc.org Brits Abroad: Five Reasons UK Businesses Should be Exporting 1 FedEx Great British Export Report 2015 <http://www.fedex.com/gb/small-business/export-report-2015.html> 2 FedEx Great British Export Report 2015 <http://www.fedex.com/gb/small-business/export-report-2015.html> 3 FedEx Great British Export Report 2015 <http://www.fedex.com/gb/small-business/export-report-2015.html> 4 Worldometers, 2015 <http://www.worldometers.info/world-population/uk-population/> 5 http://www.growthbusiness.co.uk/growing-a-business/ebusiness/2390143/open-for-export-uk-businesses-should-look-to-overseas-shoppers-for-growth.thtml <http://www.growthbusiness.co.uk/growing-a-business/ebusiness/2390143/open-for-export-uk-businesses-should-look-to-overseas-shoppers-for-growth.thtml> , 15 August 2013

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s s e in s u B n a ic r e m BritishA n o e h c n u L s a m t is r h C l Annua Supporting

At

The Dorchester

Tuesday December 8th 2015,12:00pm - 3:00pm As our Annual Christmas Luncheon at the Dorchester returns for 2015, we hope that you, your colleagues and clients will join us for what promises to be another hugely enjoyable afternoon of networking and entertainment.

With an expected equally impressive array of prizes to be won in our raffle as well as silent and live auctions, our Christmas lunch remains the highlight of the London events calendar and the perfect setting to reward employees and entertain clients during the festive season.