2016, VOL. 2
NETWORK NEW YORK LONDON
www.babinc.org
Trending An Interview with Dominic Barton Managing Director McKinsey & Co.
2016
2016
Transatlantic Business Awards Dinner October 13 6:30 - 9:30 PM The Pierre Ne w York, NY
Honoring:
Lord William Hague of Richmond Ambassador Philip Lader Senior A dvisor, Morgan Stanle y Former Chairman, WPP plc
Lee Olesky Co-Founder & CEO, Tr ade w eb Mark e ts
Rober t Thomson Chief Ex ecutiv e, Ne ws Corp
CONTENTS
2016, VOL. 2
NETWORK NEW YORK LONDON
www.babinc.org
2 A Message from Wendy Mendenhall, Managing Director 3 TRANSATLANTIC COUNCIL
MEMBER LISTING 4 MEET THE NEW MEMBERS
13 The Changing Role of Corporate Real Estate Kyle Schoppmann, Executive Managing Director, CBRE
6 TRENDING 2016 An Interview with Dominic Barton, Global Managing Director, McKinsey & Co.
Trending An Interview with Dominic Barton Managing Director McKinsey & Co.
2016
BRITISHAMERICAN BUSINESS New York 52 Vanderbilt Avenue, 20th Floor New York, NY 10017 Tel: +1 212 661 4060 Fax: +1 212 661 4074 E-mail: nyinfo@babinc.org @BABNewYork London 12 Phillimore Walk West Wing, 2nd Floor London W8 7RX Tel: +44 (0)20 7290 9888 E-mail: ukinfo@babinc.org @BABLondon VISIT OUR WEBSITE AT www.babinc.org EDITOR James A. Weiss jweiss@babinc.org Photos by Marc Hall and Vincent Roazzi Jr.
8 FinTech’s Special Relationship Alastair Lukies CBE, Prime Minister’s Business Ambassador for FinTech & Chairman of Innovate Finance 9 2016: The Year for Action to Address Climate Change Velislava Ivanova, PhD., Principal, Ernst & Young LLP 10 NEW YORK MINUTE Ann Sarnoff, President, BBC Worldwide, North America 11 Strong Demand for Talented Cyber Security Professionals Bob Garrett, New York Office Managing Partner, KPMG
INDUSTRY INSIGHTS
12 International Tax And Transfer Pricing Reset Bill Sweeney, Director, Financial Advisory Services, AlixPartners, LLP
BritishAmerican Business NETWORK 2016, VOL. II
The Business and Economic Incentive for the Rule of Law Ian McDougall, Executive Vice President & General Counsel, LexisNexis Legal & Professional
14 The Cyber Leadership Gap Bill Sweeney, CTO, BAE Systems 15 Why Renminbi Should be Part of Your Business Strategy Patrick Burke, President and CEO, HSBC USA
The Role of Finance in the Evolving Energy Landscape Peggy Smyth, US CFO, National Grid
16 Governance: When a “narrow, cramped view”of Compliance Won’t Do Lance Croffoot-Suede, Partner and Ulysses Smith,Senior Associate, Linklaters’ IGDP
The “Chivas Regal” Strategy – Using Price as a Status Signal Noah Askin, Assistant Professor of, Organizational Behavior, INSEAD
18 POLICY UPDATE 19 PROGRAM HIGHLIGHTS
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M a n a g i n g D i r e c t o r We l c o m e
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Wendy Mendenhall Managing Director BritishAmerican Business wmendenhall@babinc.org @wendy_BAB
am pleased to share with you our latest issue of Network magazine. This edition focuses on the consumer trends observed in multiple markets throughout various industries during this fiscal year. What truly drives business? It’s a question I’m sure we’ve all asked ourselves. Arguably, the demand of the market coupled with adherence to impeccable customer service, and a thriving economy, certainly help, but business is ultimately determined by the consumer herself. Therefore, being able to anticipate where the consumer’s interests are aimed makes for a more profitable, diverse and sustainable global marketplace. This issue aims at offering more insight to answer this question with help from Dominic Barton, Managing Director of McKinsey & Co. With just half a year behind us, BritishAmerican Business New York has already achieved multiple milestones. I’m delighted to announce the solidification of our strategic partnerships with Innovate Finance and Out Leadership, whom we are looking forward to working with, to further
engage the Entrepreneurial Finance and LGBT communities. Also, I am pleased to report that the inaugural session of our Leadership Forum strongly indicated that this new series is sure to become a veritable champion for true thought-leadership, and cross-industry networking, alongside our insightful briefings, exclusive roundtables and member-focused receptions. Among our other achievements is the launch of the new BritishAmerican Business Council website earlier this year, soon after the re-designed BAB website. Our team is very proud to have made a strong step forward in 2016. Backed by Witt/Kieffer, Angela Mortimer and Willis Towers Watson, and hosted by Sullivan & Cromwell, BAB will examine just how the engine of human innovation is fueled at Innovation Conference: The Future of Talent & Leadership. As always, I hope to see you at our many events and programs, and am always eager to hear from you with any feedback or questions you may have. Thank you for your continued support.
Where is #BAB trending in 2016? BritishAmerican Business
@BABNewYork
@bab_newyork
BritishAmerican Business New York
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Our social media presence is on the rise. LinkedIn leads the pack, just ahead of Twitter, but with the new additions of Instagram and YouTube, it is only a matter of time before the world gets to know BritishAmerican Business. We can’t wait to Connect. Follow us, and we’ll follow you.
BritishAmerican Business NETWORK 2016, VOL. II
Tr a n s a t l a n t i c C o u n c i l M e m b e r s
TRANSATLANTIC COUNCIL MEMBERS Transatlantic Council Membership is reserved for a select group of BritishAmerican Business’ leading companies, and offers them a customized program of exclusive networking, promotional, and business opportunities, in addition to the regular benefits associated with membership in BritishAmerican Business.
A.T. Kearney
British Airways
FTI Consulting
Linklaters
Santander
Aberdeen Asset Management
Broadridge Financial Solutions
FTSE Russell
Lloyd’s America
General Atlantic
Lloyds Bank
Schroders Investment Management North America
Gibney Anthony & Flaherty
LSG (US)
Sheppard Mullin Richter & Hampton
Goldman Sachs & Co.
Marsh & McLennan Companies
Siemens Financial Services
Ace Group Brookfield Office Properties AIG
Brunswick Group
Akin Gump Strauss Hauer & Feld
BT
AlixPartners
Burson-Marsteller
Alston & Bird
CBRE
Hakluyt & Company (North America)
Chadbourne & Parke
Hearst Corporation
McKinsey & Company
Chubb & Son
Heidrick & Struggles
Mintz Group; The
Citi
Herbert Smith
Moelis & Com
City Football Group
Hill+Knowlton Strategies
Morgan Lewis & Bockius
Cognizant
Hinduja Group of Companies
Coller Capital
HSBC Bank USA
Colliers International
IBM Corporation
Corsair Capital
INSEAD
Cushman & Wakefield
Instinctif Partners
Debevoise & Plimpton
Invest Northern Ireland
BAE Systems Applied Intelligence
Deloitte.
IPSA International
Bank of America Merrill Lynch
Delta Air Lines
Jaguar Land Rover
Dentons
JetBlue Airways
Deutsche Bank
Joele Frank, Wilkinson Brimmer Katcher
Promontory Financial Group
JWT
Prosek Partners
Kingstree Group U.S., The
Proxima Group
Korn Ferry
PwC
KPMG
Relationship Capital Partners
Langham Place, Fifth Avenue
Richard Attias & Associates
Latham & Watkins
Royal Bank of Scotland, The
Legg Mason
Russell Reynolds Associates
LexisNexis
Samba Brands Management
AMC Networks American Airlines American Express ANZ Aon Hewitt Aon Risk Solutions Aquiline Capital Partners Arup Aspen Insurance Holdings
Barclays BBC Worldwide North America Beazley Group BGD Holdings BLJ Worldwide Bloomberg BNY Mellon
DLA Piper Economist Group, The EHS Partners EMC Corporation Exxon Mobil Corporation EY
Boots Retail USA Finsbury Boston Consulting Group; The BP America
Fragomen Del Rey Bernsen & Loewy
BritishAmerican Business NETWORK 2016, VOL. II
Guardian
McGraw Hill Financial McKinney Rogers
Standard Chartered Bank State Street Corporation Sullivan & Cromwell Tata Consultancy Services Thomson Reuters Tradeweb Turner & Townsend
Mountbatten Institute UBS NASDAQ UK Trade & Investment National Grid United Airlines News Corporation Virgin Atlantic Airways NFL VisitBritain Norton Rose Fulbright Vodafone Global Enterprise NYSE WeiserMazars NYU Stern School of Business Pfizer
Wells Fargo & Company Willis Group Holdings Winchester Capital Withers Bergman Witt/Kieffer WL Ross & Co. Xerox Corporation Young & Rubicam Group Zurich Insurance Company
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MEET THE NEW MEMBERS
New Board and IAB Members BritishAmerican Business is governed by a transatlantic Board of Directors, led by our Chairman, Nicholas Walsh, Senior Advisor, AIG and our Deputy Chairman/President, Christopher Perry, President, Global Sales, Marketing and Client Solutions, Broadridge Financial Solutions. The Board’s active support and commitment to BAB’s mission are critical to ensuring our continued success as an organization. We also enjoy strong support from our International Advisory Board, consisting of chairmen and CEOs from more than 100 major, multinational companies. Please join us in welcoming these new additions to our Board of Directors and International Advisory Board.
NEW BOARD MEMBERS:
NEW INTERNATIONAL ADVISORY BOARD MEMBERS
LUIS ARRIAGA Managing Director, (UK, Ireland & Nordics) UPS
SIR KIM DARROCH KCMG Her Majesty’s Ambassador to the USA Honorary Co-Patron of BritishAmerican Business
MARK TWEEDIE UK Corporate Banking Head Citi
CLARE FRANCIS Managing Director, Head of Global Corporates Lloyds Banking Group
Transatlantic Council Members
INNOVATE FINANCE www.innovatefinance.com
MERCK & CO. INC. www.merck.com Merck is an innovative, global healthcare leader that is committed to improving health and well-being around the world. Our core product categories include diabetes, cancer, vaccines and hospital acute care. We continue to focus our research on conditions that represent some of today's most significant health challenges - like cancer, hepatitis C, cardio-metabolic disease, antibiotic-resistant infection and Alzheimer's disease, and we are on the front lines in the fight against emerging global pandemics, such as ebola. We also devote extensive time and energy to increasing access to medicines and vaccines through far-reaching programs that donate and deliver our products to the people who need them.
DR CATHERINE RAINES CEO UK Trade & Investment
SIMON FREAKLEY Chief Executive Officer AlixPartners
JOHN PETTIGREW CEO National Grid plc
JOSH SAPAN President & CEO AMC Networks Inc
ANTONIA ROMEO British Consul-General, New York & Director General, Economic and Commercial Affairs USA
JESS STALEY Group Chief Executive Barclays PLC
Corporate Members AltFi
Northern Star
Angela Mortimer
Pharos Alliance
Appleseed Strategy
Rimini Street Inc.
Castle Brands (USA) Corp.
Robert Walters
DDC USA LLC
Scotwork (NA) Inc.
Fitch Learning
Sentinel Mangagement Consultants
The Guarantors Agency Sofitel New York Insperity The Standard Hotels International AutoSource (IAS) TMF Group Jamieson Corporate Finance Living Well Balanced
JOBSOHIO www.jobs-ohio.com JobsOhio is a private non-profit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention, and expansion efforts.
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BritishAmerican Business NETWORK 2016, VOL. II
Women’s Forum Since its launch in 2011, BAB has held a series of programming specifically targeting the women professionals amongst our member companies. Maria Bartiromo, Anchor of Fox Business Network, launched our Women’s Forum at an exclusive breakfast presentation, sponsored by Deloitte, United Airlines and National Grid, and hosted by Thomson Reuters. The principle objective of the Women’s Forum is to act as a consortium, providing an unparalleled opportunity to bring together women’s diversity groups and individual female executives from our member companies, enabling them to expand their networking reach, share best practices and generate topical discussion across all industries.
Join us for:
Why Tomorrow’s Great Leadership is Nothing Like Today’s - And Why Women Will Lead the Way June 28 | 8:00 - 9:30 AM Norton Rose Fulbright 666 Fifth Avenue Sponsored by:
TRENDS
Trending Interview with Dominic Barton, Global Managing Director, McKinsey & Co. With uncertainty in so many local markets, where should firms be looking to invest and expand? This year and the last have been tough for sure, but there are always pockets of growth – and we have seen a remarkable rebound in markets over the last month or so (with equities markets regaining $4.5 trillion that they had lost in value since the start of the year). We need to think about the long-term opportunities that are in front of us. In fact, we believe there is a disconnect between the turbulence Dominic Barton in the markets and the real economy. Global Managing Director The US is growing (it has seen 71 McKinsey & Co. months of consistent job growth, the longest streak ever) and even the EU, while volatile politically, has been stabilizing from an economic point of view. Emerging markets still have incredible potential as well – we estimate there will be 2.2 billion new middle class consumers by 2030, most of them in the developing world. With this in mind, firms should continue to invest in Asia and Africa. We estimate that 315 cities in Asia will fuel 31% of global GDP growth through 2025. Africa is also a continent to be reckoned with – the African consuming class will reach 128 million households by 2020, with consumer spending growing 8-9% per annum. And there is also still a lot of opportunity in North America and Europe (which represent 51% of global GDP today, and will retain a high share (37%) in 2035) – one needs to identify the “pockets” of growth in these regions. How can companies continue to perform in this global slow-growth environment? The most successful companies are responding in a few common ways. First, they are reallocating resources (people and capital) – dramatically. Analyzing 1,508 companies over 20 years, our corporate strategy practice has found that companies that raise their reallocation rate by 10% see a 2.5% increase in TRS within 5 years.
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Second, leaders (and the organizations that they lead) need to look at the global environment with both “a telescope and a microscope” – they need to be focused on the long-term trends for their business, while also managing the near-term issues. Randall Stephenson, CEO of AT&T, is a case in point. AT&T anticipated the trend toward mobile media consumption and completed a merger with DirecTV in order to capture the opportunity. They are also investing in aggressively retraining their 280,000 employees to prepare for the future. Third, companies are “organizing for the future.” We are seeing flatter, more decentralized organizations that can innovate at speed – for example, Haier has reorganized its 80,000 person workforce into 2,000 self-governing units of about 40 people each, each with its own P&L. Companies are also thinking of themselves and their products as “platforms,” not traditional structures – DJI, the Chinese drone manufacturer, focuses developing their “core technology” gives away developer kits for free, allowing others to create apps for the drones. This has allowed DJI to scale incredibly quickly – they are now the top civilian drone maker worldwide. What will be the next industry to be disrupted by high-tech upstarts? All industries are being disrupted – no one is immune, including us at McKinsey. The most obvious changes are happening in “business-toconsumer” industries (for example, media, retail, telecom, retail banking), but we are also seeing significant shifts in “business-to-business” industries—from manufacturing to mining to energy. A good example of the kind of transformation occurring in “business-tobusiness” industries is the acceleration of “Industry 4.0” in manufacturing. 24 billion data-collecting sensors were purchased in 2014 – up from just 4 billion in 2012. These and other technological advances are making production far more efficient. Using sensors, manufacturers are also producing “smarter” machines, which can deliver huge value. Optimized scheduling and predictive maintenance, for example, can improve a locomotive’s velocity by 1 mile per hour per day – which is potentially worth a couple hundred million dollars in annual profit for a large railway. These kinds of changes are happening across all industries, creating challenges (how do we adapt?) and incredible opportunities. What will be the next industry to be disrupted by high-tech upstarts? As we all know, China is undergoing a transition from an economy led by investment and exports to one led by consumption and services – I am
BritishAmerican Business NETWORK 2016, VOL. II
2016 “Leaders need to look at the global environment with both ‘a telescope and a microscope’ — focusing on the long-term trends and managing near-term issues.” confident in the country’s technocratic leadership, though, and remain “bullish” on China. Growth in 2016 will be lower than it has been for the past 25 years, but will nonetheless be robust (likely around 6.5%) and from a much larger GDP base than before ($11 trillion). A close read of the 13th Five Year Plan shows the scale of reforms and investment that the Chinese government is making to support long-term growth – they aim to create 50 million new jobs by 2020 and raise 56 million people out of poverty, while also reducing emissions, retraining redundant industrial workers, and improving the country’s urban housing stock. Global firms looking at opportunities in China need to remember that growth varies by sector – Gordon Orr, who led our China practice for many years, says, “China’s economy today is made up of multiple subeconomies, each more than a trillion dollars in size – some are booming and some are declining.” Manufacturing output is falling, but consumption and services are booming. Services surpassed 50% of Chinese GDP for the first time in 2015. Household consumption is nearing 40% of GDP, and will continue to grow as Chinese consumers become wealthier and spend more – ecommerce sales, for example, grew 33.3% last year, to $600 billion. The talent market is again competitive, what trends are you seeing in recruitment/retention problems and solutions? One of the biggest trends we are seeing is the growth of online talent platforms – these tools are making the talent market much more competitive. 50% of working-age adults in the US have registered for
BritishAmerican Business NETWORK 2016, VOL. II
sites like LinkedIn, Monster.com, and Glassdoor – these services make it easier to find talented people, but also make it harder to retain them, since employees can very easily compare their compensation, lifestyle, and career track to those at other companies. One way companies are responding is by creating internal talent platforms. Our McKinsey Global Institute has found that digitized internal “job boards” (e.g., Société Générale’s international talent mobility platform, which connects employees to job opportunities abroad) can significantly improve retention – potentially leading to a 9% increase in output and 7% reduction in the cost of the human resources function. These benefits aren’t restricted to sectors with high recruiting costs, such as professional service – for example, the average retailer could use an internal talent platform to improve store output by 3% and reduce talent and human resources costs by 5%. n
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TRENDS 2016
FinTech’s Special Relationship By Alastair Lukies CBE, Prime Minister’s Business Ambassador for FinTech & Chairman of Innovate Finance.
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his year marks the 70th anniversary since Winston Churchill coined the historic phrase, ‘the special relationship’, referring to the unique diplomatic, political, economic and cultural relations between the United States and the United Kingdom. Coincidentally, this year both nations are in the midst of critically important electoral processes, the outcome of each hugely significant for the other, but at the core of Alastair Lukies CBE both the Presidential election and Prime Minister’s Business European referendum remains a Ambassador for FinTech common theme: what‘s best for & Chairman of Innovate our respective societies in the Finance. here and now? Over the past decade, we’ve seen new waves of FinTech innovations, each one making its mark on the evolution of financial services, and providing the consumer with more choice on how to interact with his or her finances. Last year in particular was testament to a growing industry with a number of record-breaking FinTech IPOs, acquisitions and partnerships between new and old alike. The Worldpay and Square IPOs stand out as two capital market transactions that topped the scales, but also highlighted the industry’s core theme of enabling consumers to engage with their money more seamlessly, in these cases via point-of-sale (POS) products and services. On reflection of a year of large industry deals, two that stand out as demonstrative of M&A activity at the upper echelons of FinTech businesses include the sale of SunGard to FIS for $9.1B, and the acquisition of IDC by ICE for $7.8B. Activity of this scale shows two things: (i) the awareness of the FinTech opportunity, and (ii) a land-grab underway. Today we see a unique opportunity on both sides of the Atlantic to continue evolving more efficiently and effectively, as regulatory innovation meets technological innovation, placing the consumer at the centre of new propositions by the incumbents and disruptors – there will be a number of key trends emerging. Having seen the significant increase in VC investment over the past year (up over 250% from 2013 to 2014), the increase in deal sizes and funding rounds, and the sheer number of start-ups in the FinTech space, it is likely that the sector will experience a levelling in valuations and maturity for both private and public companies. I also believe that with a reality check on valuations, there will be a global consolidation of
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FinTech businesses aiming to gain scale and international distribution as synergistic companies “merge to surge.” In the past, the UK has lead a number of significant FinTech developments including the world’s first ATM by Barclays Bank in 1967, the first rollout of the chip and pin standard and real-time payments, and the globally renowned design and thought behind M-Pesa in Kenya. The UK’s open-mindedness to be at the bleedingedge of FinTech and payments regulation has also contributed to the Open Banking Working Group (OBWG), a task force leading the exploration of how data can be used to help people control their money, established in 2015 at the request of HM Treasury. The OBWG has set out an Open banking Standard to guide banks in this area ahead of the mandated implementation of the European Union’s PSD2, ensuring that the UK has a succinct, efficient and societally beneficial set of standards ahead of the curve. HM Treasury’s foresight here is yet another demonstration of regulatory innovation being as important as technological innovation, and I believe we will see the fruits of labor here within the next few years. As I began writing this, the UK Chancellor released his budget for 2016, and whilst I don’t intend to lament on the detail, there were two points that jumped out: an increase in the ISA limit to £20,000 and a new Lifetime ISA (for under 40s) of up to £4,000 with an additional 25% government bonus for saving. Both these points are suggestive of this Government’s encouragement for the next generation to have the choice and flexibility to save. However, while the UK has a number of favourable characteristics in the FinTech space, there are of course a number of areas that the other half of our special relationship still leads us in – principally in the investment space. The US lead $7.5B of the total global $12.5B VC investments in FinTech in 2014, and with firms like SoFi doing $1B funding rounds in 2015 it looks set to remain weighted that way. Whilst the UK could learn a lot from the US investor mind-set, and could equally benefit from investment entities of the US scale being established here, we also hope that the UK can continue to be seen as something of a 51st state – a fertile FinTech landscape for US investors to sow their seeds and a springboard into Europe for firms looks for international scale. The launch of the TransAtlantic Policy Working Group in March this year, and the establishment of Innovate Finance in the US later in 2016, will endeavour to support development, investment and growth on both sides of the pond. And if both governments continue to embrace the evolution and prioritize social benefit and advancements in this area, then the special relationship has a long way to run and a huge amount of potential to realize, with FinTech as a cornerstone of its future progress. This is an important space that is here to stay – I recommend you pay attention. For further information about Innovate Finance, contact Janine Hirt at janine@innovatefinance.com n
BritishAmerican Business NETWORK 2016, VOL. II
2016: The Year for Action to Address Climate Change
Why is 2016 a remarkable year for global climate change? Business, governments and nonprofit organizations achieved several historic milestones in 2015, including the launch of the Sustainable Development Goals (SDGs) and the Paris accord at the 21st session of the Conference of the Parties (COP21). Both were developed through an unprecedented collaboration between governments, business and civil society. More than 190 countries adopted the accord and publicly outlined what post-2020 climate actions they intend to take under the agreement, known as Intended Nationally Determined Contributions (INDCs). In addition, the presence of approximately 200 companies during the Paris negotiations demonstrates their support for the accord. For example, more than 120 companies are now committed to science-based emissions targets and almost 60 companies are committed to procure 100% of their electricity from renewable sources in the shortest practical time scale. In 2016, governments and businesses have started to implement their commitments. Businesses are the indispensable implementation partner for the solutions that we urgently need. What is shifting in how businesses talk about climate change and sustainability with their stakeholders? Climate change has been on the corporate agendas for decades. The difference now is that stakeholders, including shareholders, investors, regulators and customers, are expecting companies to disclose climate change risks in their operations, products and supply chains, and to be prepared to adapt and mitigate these risks. According to EY’s 2015 institutional investor survey most investors factor Environmental, Social and Governance (ESG) information into their decision-making. A notable 62.4% of the 200 institutional investors participating in the survey are concerned about stranded assets risks. More than one-third of respondents report cutting their holdings of a company in the last year due to this risk and an additional quarter of respondents plan to monitor this risk closely in the future. Customers are another key stakeholder category. For example, 75 companies with more than $2 trillion in combined purchasing power participate in the CDP’s supply chain program and require over 4,000 companies in their supply chains to provide information on climate and water risks. Peer pressure is also increasing. For example last November, a coalition comprised of CEOs from 79 companies signed a call to climate action. They are working together to raise stakeholder awareness for climate action, focusing on solutions and economic opportunities. What trends are you seeing in planning for resiliency, risk and business continuity in the face of climate change? We provide our clients with services that focus on identifying and managing risk. Today, one of the greatest risks businesses face is the consequences of inaction related to climate change. We are now able to translate these risks into dollars and that is something that resonates with our clients and their shareholders and investors. By investing in energy efficiency, reducing energy consumption and resulting greenhouse gas (GHG) emissions, and
BritishAmerican Business NETWORK 2016, VOL. II
technology innovation, companies are lowering costs and creating more financially viable, long-term solutions. Many companies are exploring scenarios for potential exposure to carbon taxation or pricing and are modeling abatement scenarios. Over 20 governments and 75 private sector entities (including EY) participate in the Carbon Pricing Leadership Coalition, sharing experiences working with carbon pricing and exploring the most effective carbon pricing systems Velislava Ivanova, PhD. and policies. Companies also are recognizing Principal that supply chain emissions make up Ernst & Young LLP a large part of their environmental footprint, creating business continuity risks. EY is currently collaborating with the United Nations Global Compact to develop the State of Sustainable Supply Chains study that explores how companies are increasing the sustainability of their supply chains. With input from over 60 companies globally, the study will identify the steps companies are taking to address risk, and the challenges they face. The final report will be launched in June 2016. What opportunities exist for coupling sustainability initiatives with new business growth and innovation? Innovation was a key theme at COP21. The transition to a low-carbon economy is one of the greatest business opportunities in the next 50 years and leading companies are already adopting innovative low carbon, circular business models. The Low Carbon Technology Partnerships initiative (LCTPi), for example, includes over 150 companies and 70 partners committed to accelerating the transition to a low-carbon economy. The LCTPi could deliver 65% of the emissions reductions that are required by 2030, while stimulating $5 to $10 trillion of investment and supporting 20 to 45 million jobs each year. The LCTPi actions will create business opportunities and contribute to achieving the INDCs’ and SDGs’ targets. What is the next great sustainability challenge for global business? The unrecorded values of Natural Capital are becoming more apparent to corporations and governments globally as natural resources become more degraded and scarce, resulting in new risks and higher costs. Measuring, valuing, reporting on and managing natural capital can present complex business challenges. A recent EY article outlines actions for businesses to capture and maintain natural capital benefits. If managed well, natural capital is a long-term asset; does not depreciate; and can represent a cost-effective way of achieving multiple development goals, including climate change mitigation and adaptation. n
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N E W YO R K M I N U T E Ann Sarnoff, President, BBC Worldwide, North America We sat down recently with Ann for a quick NEW YORK MINUTE: What makes the perfect TV show? Complex characters and an intriguing plot
Coffee, Tea, or… Definitely coffee -- I’ve been drinking it since I was 5
Our readers should be watching… London Spy and Orphan Black Season 4
What do you still find surprising about New York City? Pretty much everything
What is the last thing you googled? Matt LeBlanc Top Gear
Do you have a favorite cocktail? A dry rose
What is one food you can’t resist? French fries (preferably lightly salted and not overcooked)
You don’t have fun when… I’m with people with negative energy
What drives you absolutely crazy? Loud talkers The TV industry in one word: Dynamic! What does Leadership look like? Setting the vision, hiring great people, and clearing the path so they can do their jobs
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When you visit the UK, what’s your first stop? The Royal Garden Hotel to take a shower after the redeye What something about yourself we couldn’t find out from LinkedIn or Google? My mother was the youngest of 13 and I have 32 first cousins
s President, BBC Worldwide North America, Ann Sarnoff is responsible for driving growth and profit across the company’s diversified business divisions in the US and Canada. She oversees BBC Worldwide Productions (producers of Dancing with the Stars, Getting On), Adjacent Productions, linear and digital program sales and co-productions, home entertainment, licensing, live events, film and BBC.com. She also leads efforts to amplify BBC Worldwide’s global brands Top Gear, Doctor Who, and the natural history brand BBC Earth. In her previous role as COO, BBC Worldwide North America, Sarnoff was responsible for most major revenue streams for the company and led cross-business franchise development for global brands. Sarnoff oversaw negotiations around major MVPD deals for BBC AMERICA leading to an increase in distribution from 68M subscribers to 80M; grew digital program sales to where they now exceed linear program sales; built sales of Doctor Who merchandise to over $100M at retail; spearheaded the BBC.com features section strategy; and launched the first-ever conference for BBC.com ‘BBC Future: World-Changing Ideas Summit.’ Prior to joining BBC Worldwide, Sarnoff was President of Dow Jones Ventures and Senior Vice President of Strategy, where, she was responsible for leveraging the assets of Dow Jones to create new businesses focusing on digital and B2C markets, and for overseeing corporate strategy and business development. Sarnoff created The Wall Street Journal executive conference business, launching a number of new conference franchises including The Wall Street Journal CEO Council, a gathering of 100+ top CEOs from around
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the globe, ECO:nomics, for executives in the clean-tech space, and Viewpoints West, a series based in Silicon Valley; and oversaw the D: All Things Digital conference. Sarnoff launched FINS.com, a career and jobs site targeted at financial professionals, which later broadened to cover tech, sales and marketing professionals. FINS. com became the backbone of the WSJ.com Careers site and was subsequently sold to eFinancialCareers. She also chaired the board of FiLife.com, a personal finance joint venture with IAC. From 1993-2003, Sarnoff worked with some of the best-known brands in television at Viacom. As Nickelodeon’s Executive Vice President for Consumer Products and Business Development, she built Nickelodeon consumer products into a multi-billion dollar revenue business at retail. In this role, Sarnoff developed Rugrats and Blue’s Clues into successful off-air franchises by launching them into toys, apparel, publishing, home video, video games, live events and themed attractions. She also led the teams that developed new cable channels TV Land and Noggin. Subsequently, she became COO for VH1 and CMT where, in addition to strategic planning and business operations, she oversaw the company’s websites, radio, audio and video products, and launched the channel VH1 Classic. Following Viacom, Sarnoff was COO for the Women’s National Basketball Association, where she was recruited by and sat on the executive team of NBA Commissioner, David Stern. In addition to running the league’s business operations and overseeing player personnel and programs, Sarnoff redefined the WNBA brand, secured new league sponsorships, and instituted innovative marketing campaigns for the league. n
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SPONSORED CONTENT
Strong Demand for Talented Cyber Security Professionals By Bob Garrett
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mid growing concern about the vulnerability of computer systems to attacks, the demand for talented cyber security professionals has never been stronger. A recent report from Cisco cites 1 million cybersecurity job openings globally, rising to 6 million by 2019, with a projected shortfall of 1.5 million professionals. Our clients tell us they especially need candidates who not only possess the appropriate technical skills, but also the ability to fully understand and explain the nature of various threats, and to take the appropriate steps to mitigate the risks to the organization. Here are the top five skills that hiring managers, consulting firms and cyber security agencies are seeking:
Bob Garrett New York Office Managing Partner
Communication – The ability to diagnose complex cyber issues and clearly explain them to management. Being able to analyze a cyber issue and recommend a solution that helps protect the business’s reputation, customers, vendors and stakeholders is critically important. Risk Management – The ability to understand how the business operates and to organize a systematic plan to minimize disruption when cyber incidents occur. Every attack is different so there is no onesize-fits-all approach. A good analyst/manager will assess the situation, recognize and neutralize the immediate vulnerabilities while keeping an eye on smaller issues. Technical Understanding – Being well versed in many technologies. A mobile expert who knows nothing about mainframes, for example, won’t be able to devise a strong strategy to respond to an attack via the mainframe. Professionals who understand multiple technologies will be in a great position to provide real value. Consensus Building – People in departments outside IT, such as finance and marketing, may not fully understand the importance of cyber security, but their voices will affect IT’s budget, size of staff and available resources. It’s critical to be able to understand their viewpoints and challenges in order to develop robust cyber security strategies. Program Management – Cyber security isn’t a project with an end date. It is a living organism that is constantly evolving. Cyber professionals need to be vigilant and drivers of constant change and updated information across their organizations. They need to stay up-to-date on all reported cyberattacks and adjust accordingly to make sure that the organizations security program is proactive rather than reactive as much as possible. For more information on KPMG Cyber, please visit http://advisory.kpmg.us/kpmg-cyber.html. n Bob Garrett serves as the New York office managing partner for KPMG LLP where he is responsible for overseeing the delivery of high-quality client service, driving cross-functional quality growth efforts, attracting and retaining key talent, and representing KPMG in the New York marketplace and community. In this role, Bob also serves as Account Executive for many of KPMG’s largest clients.
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I N D U S T RY I N S I G H T S
International Tax And Transfer Pricing Reset
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Bill Sweeney Director, Financial Advisory Services AlixPartners, LLP
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he days of tax opportunism are rapidly coming to an end. Although corporate inversions remain in the news and one still hears about aggressive tax avoidance, in fact the worldwide crackdown on multinationals’ tax structures is here now. The days of tax opportunism are rapidly coming to an end. Although corporate inversions remain in the news and one still hears about aggressive tax avoidance, in fact the worldwide crackdown on multinationals’ tax structures is here now. The burden on multinationals to comply with new requirements and defend their tax structures will likely be enormous. The OECD’s project to counter base erosion and profit shifting through tax transparency has produced demanding country-by-country (“CbyC”) reporting requirements and new standards for assessing harmful tax practices. The new CbyC reports require that multinationals provide revenue, profit/loss, capital, and accumulated earnings for each country of operation. The European Commission has ordered certain multinationals to repay funds from tax rulings it deems constitute “illegal state aid” by EU member states such as the Netherlands and Luxembourg. The U.K. has a new diverted profits tax, dubbed the “Google tax”, which became law amidst concerns that multinationals were shifting profits to tax havens. This law permits the government to levy a higher corporate tax rate on any profits it deems were improperly shifted from the U.K. Google, like many successful global companies, avoided billions in tax using intercompany contracts to shift taxable
income (in Google’s case, to Bermuda). The U.S. has witnessed a surge in IRS court actions against multinationals for various alleged tax and transfer pricing abuses. In such cases, the IRS issues a notice of tax deficiency against the company, with millions or sometimes billions at stake. If the IRS designates the case for litigation, the company is blocked from obtaining an administrative settlement (e.g., through Appeals) and will almost certainly wind up in U.S. Tax Court, although it might have wound up there anyway. Many court matters concern the ownership, development and/or migration of intangibles and appropriate compensation. It remains fine to be tax efficient provided profits are earned where value is created and a fair share of taxes is paid at each location consistent with economic substance. However, the environment is such that all multinationals, including those with conservative tax postures, may now have to deal with the increased risk of tax audit and litigation. To be prepared, multinationals should first reverse any positions that are overly aggressive and be certain that intercompany contracts are aligned with actual conduct at each location (and move people if necessary). Multinationals should create systems to generate required data for the CbyC reports and make sure they can meet all other regulatory requirements. Multinationals should be forthright with the tax authorities at the outset of an audit and put their best argument forward pro-actively. Finally, multinationals might consider boosting their tax contingency reserves. n
BritishAmerican Business NETWORK 2016, VOL. II
The Changing Role of Corporate Real Estate Key insights from CBRE Americas 2015/2016 Occupier Survey
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Kyle Schoppmann Executive Managing Director CBRE
oday’s business leaders find themselves faced with workplace demands that influence how they run their organizations. CBRE’s most recent Occupier Survey, conducted among 229 corporate real estate (CRE) executives, provides a unique look into CRE strategies, priorities and practices among leaders across multiple markets and industries. Three challenges emerged repeatedly, regardless of business type, size or location – skilled labor shortages, cost escalation and economic uncertainty. These challenges are reshaping the role of corporate real estate, and establishing key areas of focus for CRE leaders. Enabling Talent: CRE executives are focused on delivering an environment that serves as an effective tool for attracting, engaging and retaining highperformance talent. Among survey respondents, 57% see employee attraction and retention as a main driver of workplace strategy. This includes linking CRE, HR and IT missions to deliver distinctive environments that emphasize their brand, deliver true functionality, provide freedom of work style and promote connectivity among employees. Additionally, talent can drive a decision to relocate as half of respondents make location decisions based on talent availability.
Managing Cost: Cost emerges as a leading decisiondriver at the building level and is used effectively to position companies within the market. Where possible, companies benefit by “saving in place.” With low vacancy in play across established markets, creatively restructuring leases and floor plates can optimize occupancy scenarios, both functionally and financially. In the past year, 85% of survey respondents employed space restructuring as a lever to impact cost and improve efficiencies. Expanding Influence: CRE management teams have evolved into lean, strategic teams that recognize the value of better analytics and leveraging internal and external partnerships as they focus on enterprise goals. Case in point, 51% of respondents are seeking to improve C-Suite sponsorship to support corporate real estate strategy. The Takeaway: Whether it’s retaining and recruiting talent, promoting workplace culture or realizing greater efficiencies, these challenges call for a strategic partner that understands how real estate can influence workplace environment, the bottom line and everyday operations. Real estate isn’t simply “a space to work”, it’s room to create the competitive advantage that businesses need to realize greater success. n
The Business and Economic Incentive for the Rule of Law
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he rule of law brings up significant issues for the corporate world when considering investment in other countries. Political stability, independence of the judiciary, the increased risk for the company's profile, the need for greater due diligence, land rights, workers in the supply chain, to name a few. Where there is not a strong adherence to the rule of law, there is weak growth and it is difficult to invest. Last year, as part of the Business for the Rule of Law (B4ROL) initiative highlighting the foundational and mutually beneficial relationship between advancing the rule of law and sustainable development, the United Nations Global Compact launched the B4ROL Framework. This represented a pivotal moment in raising awareness of the importance of the rule of law and the role the legal profession, and General Counsel particularly can play in advancing corporate sustainability among the global business community. The Framework offers a guide for businesses around the world. It advocates proactive, voluntary actions to support the rule of law in everyday operations and relationships. LexisNexis was a critical source of inspiration for the B4ROL initiative, which was
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introduced in September 2013 by United Nations Secretary-General, Ban Ki-moon. LexisNexis and Baker & McKenzie also made a significant contributions to the initiative by working with the UN Global Compact and local networks, to mobilize consultation workshops around the world, to develop the Framework. Advancing equality and accountability under the law, transparency of laws, access to laws including those that protect fundamental human rights, as well as many other critical aspects of the rule of law, not only benefit the greater good, but also are imperative to protecting and supporting the goals of global business. Studies show a direct connection with GDP, the economic growth of a country, and the rule of law. While lawyers can, and should, lead this effort, we need to engage one of the biggest sectors of society that can make an immediate and significant difference—the business community. As a company whose purpose and values are rooted in the rule of law, LexisNexis is proud to partner with the United Nations Global Compact and our customers spearheading these efforts. n
Ian McDougall Executive Vice President & General Counsel LexisNexis Legal & Professional
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I N D U S T RY I N S I G H T S
The Cyber Leadership Gap
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Bill Sweeney CTO BAE Systems
yber risk—specifically the potential for data breaches or business disruption that could result from successful cyber attacks – is globally recognized as a business risk on par with market volatility and supply chain disruption and far more likely than other causes of business interruption. While the vast majority of business executives quickly admit that the consequences of cyber attacks are dramatic, a startling number remain uninformed about the fundamentals of their company’s cyber security and how to better defend their organizations. We recently polled a cross-section of managers about their companies’ cyber security. Our findings showed that while 70 percent of executives consider data breaches a definite threat to business, 40 percent struggled – or altogether failed – to accurately describe company cyber security policies and protocols. When asked to explain how their organizations defend against increasingly sophisticated “social engineering” schemes such as email phishing – which can deliver devastating malicious software – executives overwhelmingly said they rely on network perimeter technologies, with 97 percent citing firewalls neither of which will meaningfully impact phishing attacks. While our research confirmed the overall deficit in cyber security awareness by managers, it also pointed to a solution. Executives, by way of their institutional knowledge and extent of decision-making latitude are the unrealized answer to achieving better cyber security. And, the strategies they need are easily identifiable and within reach:
Build a ‘human firewall’ – Our research showed 38% of companies conduct cyber security training for staff biannually. By implementing consistent staff training and testing on a quarterly basis, executives can reduce network compromises from phishing emails. Include in your training awareness of the risks of social media and social engineering. The former can make your company vulnerable by revealing too much information; the latter makes your people vulnerable to manipulation. Don’t rely solely on Encryption – 87% of the companies we surveyed use some form of encryption to protect the most sensitive corporate data. But companies need to better prioritize data and recognize that encryption is not a ‘silver bullet.’ Organizations need an integrated approach that incorporates other protective measures. Befriend the CISO – Incorporating the chief information security officer, or CISO, into company leadership can provide executives budget for cyber defense. Your CISO can coordinate a security risk assessment, and can create the plan for remediation. Cyber security awareness and training programs need to be more than an infrequent, ‘check-thebox’ activity. To be effective, it must have a lasting impact. Programs need to have a cognitive element to ingrain these practices into employees’ daily routines and empower them to be more engaged, increase their knowledge of bad practices and awareness of the most common threat techniques. And, as with any training program, senior management must show belief and commitment. n
Perk Up!
Member Perks from BritishAmerican Business
Many of our members provide exclusive offers or discounts on their services and products to fellow members of BritishAmerican Business, and the wider BABC network of 21 chapters, either through an online or in-store redemption. BritishAmerican Business Member Perks are reserved exclusively for our members. To view the details of our current offers listed in Business Services, Travel & Accommodation and Retail & Leisure, please visit: babinc.org/perks If you would like to promote any of your own services/products in this way to your fellow BritishAmerican Business members, please contact Mariah Measey at mmeasey@babinc.org or 212.338.9635. For more information on the BABC network, please visit: www.babc.org/chapters
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BritishAmerican Business NETWORK 2016, VOL. II
Why Renminbi Should be Part of Your Business Strategy
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Patrick Burke President and CEO HSBC USA
or US companies doing business with China, or competing for a share of its growth, using the renminbi (RMB) should become an integral part of their strategy as they can experience numerous benefits, including deepening relationships with suppliers, reaching new suppliers, reducing their exposure to currency fluctuations, and gaining market share. For instance, adopting the currency may allow a company to negotiate better prices or terms with Chinese suppliers. Until recently, the only option to conduct trade with Chinese suppliers and customers was to use the US dollar. This changed in 2010 when the Chinese government eased restrictions on its currency by legislating measures that allow RMB accounts to be accessed offshore. Companies in China have been able to settle cross-border trade with RMB since March 2012, and HSBC predicts that half of all trade with China will be settled this way by 2020. Because US businesses have been slower to adopt the RMB than their international counterparts, those willing to give the currency a try will have a competitive advantage. Considering that the RMB is now the second, mostused currency to settle trade, and is among the top five currencies used for global payments, it slated for
inclusion in the International Monetary Fund's basket of Special Drawing Rights – joining the US Dollar, the Euro, the Pound and the Yen. This year, the ability of US companies to access RMB to trade and make payments may become even easier. The Working Group on US RMB Trading and Clearing, which counts HSBC among its members, was established to investigate opportunities to develop and expand the trading, clearing and settlement of RMB in the US, which could mean significant new opportunities for economic growth and development with the world’s largest trading nation and the second largest trading partner of the United States, after Canada. A hub could help US companies not only save on transaction costs by making it easier and more efficient to convert US dollars to RMB, but in turn may make it easier for US companies to export to China, especially if its consumers and companies can pay in the local currency. Greater US exports could lead to greater economic growth and increased competition. As trade continues to grow between the US and China, US business leaders will do well to learn more about RMB, and how using it might boost their bottom lines. n
The Role of Finance in the Evolving Energy Landscape
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lectric car charging stations and rooftop solar panels are quickly becoming “the norm” in our communities: They are signs that the vision for a decarbonized energy future is well within our reach. Along with technological advances, energy companies, and their finance organizations, are challenged to act nimbly to meet shifting industry demands. The ability for financial professionals to anticipate change and modify accordingly will be a key differentiator for energy companies to be successful in the 21st century – and for any company facing an environment with dynamic change like the kind we’re seeing in the utility industry. Here are a couple of ways that Finance organizations can provide the best level of support: 1. Promoting agile organizational structures – Designing Finance organizational structures that can keep up with the pace of change will be critical. It will require finance business partners to think and act differently to best serve internal clients, demonstrating availability and flexibility to meet changing needs. It will call for trust and collaboration to enable decision-making based on customized data analysis. As in all cases, having the right talent in place to promote this way of working will be a priority. To follow the common saying: We need to
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hire good people, and then get out of their way. 2. Putting power in the hands of the customer – We live in an environment where apps and smartphones are part of our everyday lives. Finance organizations that include customer-facing billing functions need to be thinking about how mobile solutions can empower customers to take charge of their bills and control services. In the utility industry, this means developing ways for customers to make educated decisions that could help lower their bills, like providing access to real-time usage and energy efficiency data. Putting power into the hands of the customer and providing insight into their own spending habits will lead to more satisfaction, and perhaps ultimately, a greener planet. n
Peggy Smyth US CFO National Grid
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I N D U S T RY I N S I G H T S
Governance: When a “narrow, cramped view” of Compliance Won’t Do
O Lance Croffoot-Suede Partner Linklaters’ IGDP
Ulysses Smith Senior Associate Linklaters’ IGDP
urs is a world of transparency. Actions that take place in an obscure corner of the world are now 140 characters away from pinging across the globe and toppling the market capitalization of major corporations. An oil spill in the Niger Delta, a disgruntled indigenous community near a mine in Peru, an emissions scandal in Europe – these situations now erupt instantaneously in the public eye, with the potential to dramatically impact share value in just minutes. At the same time, regulators, particularly those in the US, are demanding more from the companies they regulate. Leslie Caldwell, Assistant Attorney General for the Criminal Division at the US Department of Justice, stated in a recent, illustrative speech, “a narrow, cramped view of compliance – that it requires only adherence to specific regulations – ultimately will inure to the company’s detriment.” What is called for in this environment is governance, which represents a holistic, proactive, stakeholder-focused approach to addressing regulatory challenges and operational risks, rather than simply compliance with the law. A governance approach is characterized by the quality and effectiveness of the manner in which a company addresses risks and challenges. It is a determination of whether a company’s programs exist on paper only, or actually support a culture of compliance.
Questions companies should ask when seeking to achieve governance as the standard include: (1) Are the compliance programs supportive of a strong culture of compliance, such that the company, and its leadership, are actively and explicitly supporting compliance? (2) Are the programs tailored to context, such that they are effective given the company’s business lines, jurisdictions, risk factors and cultural contexts? (3) Are the programs adaptive and up-to date, such that the company is regularly scrutinizing their effectiveness to ensure the programs successfully address evolving risks and circumstances? (4) Are the programs pro-active with respect to anticipating the company’s own evolving risks while also promoting a broader culture of good practice and governance in the jurisdictions where it operates? In this world of transparency, regulators expect companies to meaningfully and proactively address the complex array of risks and challenges they face. Beyond compliance, this is about how companies “govern” themselves in the difficult business and diverse cultural contexts in which they operate. In order to protect a company’s assets and thrive, instilling effective governance must be at the top of the agenda. We need to demonstrate how and what it can deliver if we’re to change attitudes. This requires experimentation, and for pioneers to spread the word. Watch this space; we certainly are. n
The “Chivas Regal” Strategy – Using Price as a Status Signal
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here is folklore in marketing about the Chivas Regal brand of whiskey, which is said to have doubled its sales and its price. The brand had previously been viewed as middling at best, and such a rise in price should not have led to a subsequent increase in sales. Yet it did, demonstrating that price is more than just a sacrifice that buyers make when purchasing a product or service – it is also a signal and a strategy that organizations can employ. In a recent study, published by Matthew Bothner from The European School of Management and Technology, and myself, we found that the use of price as a signal extends beyond for-profit enterprise to higher education. Top-tier private colleges and universities in the United States have actually raised their tuition levels more than expected following a significant drop in the highly competitive U.S. News and World Report rankings. This is particularly true for those schools who are most “status anxious,”or those in the crowded middle of this elite group. Somewhat surprisingly – even for organizations as
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well known as these schools – this strategy actually works, though only to a small extent. Schools are able to regain a very small amount of lost ground (think: one or two rankings) when they use this tactic. Actual improvements in services and amenities are surely needed in order to fully recoup such status losses. With the relatively recent introduction of fees at the top universities in Britain, and their established status hierarchy, we would expect to see similar price-setting behavior among these organizations, albeit on a substantially smaller scale. Sticker prices in the UK are substantially lower than those in the US. Curiously, we did not find evidence of schools substantially raising, or lowering, their tuition in reaction to significant improvements in the rankings. So, while INSEAD may have just achieved a “triple first” – that is, three of our MBA programs are currently ranked #1 in the Financial Times – our research suggests subsequent tuition changes are likely to be in line with previous years. n
Noah Askin Assistant Professor of Organizational Behavior INSEAD
BritishAmerican Business NETWORK 2016, VOL. II
Brexit
The Transatlantic View In March 2016, BritishAmerican Business (BAB) surveyed its members in London and New York on the EU referendum. BAB is the leading transatlantic business organization. It incorporates the American Chamber of Commerce in the UK and the British-American Chamber of Commerce in the US. Collectively members who responded employ 327,000 people across the UK.
70%
1 in 10
of members who responded stated that if the UK were to leave the EU it would have a negative impact or a strongly negative impact on their company’s future investment or business prospects in the UK
respondents would consider moving operations out of the UK if it were to leave the EU
46%
42%
US headquarters
95%
of respondents are in favour of the UK remaining in the EU
UK headquarters
88%
of members who responded stated that access to the EU Single Market makes the UK a more attractive investment destination for their company
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89%
of respondents would keep business operations in the UK were it to leave the EU
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P O L I C Y U P DAT E ABANDONING TRADE:
A new trend in US policy?
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ecently, the United States was on a straight forward, and minimally-contested path to further define the global trade agenda. With the Trans-Pacific Partnership (TPP) agreement close to conclusion, and the Transatlantic Trade and Investment Partnership (TTIP) agreement under negotiation, the US proved yet again its leadership in promoting free trade, yet again. Trade policy has been seen as central to America’s global leadership and economic growth strategy by the Obama Administration. However, since the start of the 2016 presidential campaign, the direction for US trade policy has changed. In the public debate, trade now assumes a fairly negative connotation; It is discussed as a detriment to the economy and labor force. Contestants for the White House have willingly adopted such language throughout the election’s coverage. Not one of the leading presidential candidates is openly supporting a free trade agenda. In the contrary, while Republican candidate, Donald Trump, and Democratic Senator, Bernie Sanders, promoted a strong protectionist agenda early on, Republican Senator, Ted Cruz and Former Secretary of State, Hillary Clinton – both traditionally known as supporters of free trade – have joined the chorus of those who sharply criticize past US trade deals, and oppose the forthcoming version of the updated TPP agreement.
History proves that a critical position towards trade in presidential campaigns in not unusual as other presidential candidates have taken positions criticizing trade in the past, including President Obama. Most criticism is based on the fact that trade knows its winners and losers. Indeed, polls continue to suggest that Americans worry most about in particular the impact of trade on the current job market. The strong criticism towards trade – that also raises concern over the completion of TPP and TTIP – is surprising given the state of the US economy, which continues to be in a healthy.1 In February 2016, the The Bureau of Labor reported the lowest unemployment rate in five years.2 Some of the economy’s success is built on trade. Exports already support roughly 11.7 million jobs.3 98 percent of exporters are Small- and Medium-sized enterprises (SMEs) with fewer than 500 employees.4 Simply put, trade has helps the US economy. By creating jobs, trade affords the US an increase in spending power and, in turn, the payment of higher salaries.5 But, there are still valid concerns raised by those who do not benefit through trade deals. The Economist, suggests that active labor market policies can run alongside trade policies that help absorb any increased competition.6 Political leaders should look to trade in order to serve the best interests of their citizens. n
1. Bureau of Economic Analysis (03/25/2016) 2. Bureau of Labor Statistics (05/04/2016) 3. International Trade Administration (2015): Jobs supported by Exports 2013: product and industry 4. International Trade Administration (07/05/2015): 5. International Trade Administration (2010): Do jobs in export industries still pay more? And why? 6. The Economist (02/05/2016): The case for free trade it overwhelming. But the losers need more help
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BritishAmerican Business NETWORK 2016, VOL. II
PROGRAM HIGHTLIGHT
British Consul General’s Reception JANUARY 20 Her Majesty’s Consul General in New York and Director of UK Trade & Investment, Danny Lopez, addresses an audience in his home located on the Upper East Side in Manhattan at BAB New York’s British Consul General’s Reception in January. Guests networked over cocktails and hors d’ouevres while overlooking the East River and the evening skyline of Long Island City.
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PROGRAM HIGHTLIGHT
Ambassadorial Briefing with Matthew Rycroft JANUARY 28
Sponsored and hosted, by KPMG, newly-appointed, UK Ambassador to the United Nations, Matthew Rycroft, addressed the current issues facing the global, political landscape with a full audience of Senior Executives and Government professionals.
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BritishAmerican Business NETWORK 2016, VOL. II
PROGRAM HIGHLIGHT
The New York State of Fashion KAREN MILLEN: FEBRUARY 17 BritishAmerican Business New York kicked-off Fashion Week 2016 with a special in-store networking reception hosted by Karen Millen. Members and guests enjoyed networking and shopping over cocktails and passed canapés. Of note, BAB Chief Executive Officer, Jeffries Briginshaw, was in attendance.
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PROGRAM HIGHLIGHT
CEO Presentation with Steve Holliday FEBRUARY 26 Morgan Lewis hosted our CEO Presentation with Steve Holliday, sponsored by National Grid this past February. Among topics such as the future of energy, and the current state of the energy industry, attendees learned about sustainability and renewable resources. BAB would like to extend our best wishes to Steve Holliday who officially announced his departure from National Grid, effective Summer 2016.
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PROGRAM HIGHLIGHT
Leadership Forum Inaugural Session MARCH 8
A select group of delegates, all seasoned executives with substantial strategic, management, and financial responsibilities within their respective organizations, gathered at the launch of our Leadership Forum, sponsored by Lloyds Bank and hosted by Deloitte.
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PROGRAM HIGHTLIGHT
Young Professionals: Speed Networking JUNE 7 Our young professionals network, members with under 10 years of workplace experience enjoyed a fun twist on speed-dating in one of our most unique events. Featuring two-and-a-half minutes of lightning round introductions and pitches, each member of our group met his or her respective, professional soul-mates and ended the evening with a rooftop, cocktail reception over-looking Central Park, hosted by Y&R.
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