Bl Magazine Issue 52 September/October 2017 by BL Magazine

BL MAGAZINE

ISSUE 52 SEPTEMBER/OCTOBER 2017

technology

What’s the future for tech in the Channel Islands?

beneficial ownership

Our Bluffer’s Guide tells you all you need to know

mental health

Is anxiety the last workplace taboo?

who pays the cost of regulation? the business or the client?

ISSUE 52 SEPTEMBER/OCTOBER 2017

By understanding your ambitions and the world you operate in day-to-day, our offshore lawyers are able to fine-tune their advice and find new ways to add value. This personal approach to delivering business-minded solutions is helping us to advise on the most complex cross-border issues for our clients who range from multi-nationals and banks to high net worth individuals and investment managers.

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SI N GAP ORE

JERS EY

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Welcome

It’s all a matter of time WHEN I SIT down to write this welcome message before each edition of the magazine goes to print, there’s generally one issue that stands out above all the rest – something obvious to write about – which tends to make my life a lot easier. In the past 18 months, I’ve had plenty to keep me entertained: Brexit, the sheer lunacy of Donald Trump’s rise to becoming America’s Commander-in-Chief, and the recent UK general election. All of these, and the potential impact they might have on the Channel Islands, have given me more than enough editorial fodder. So, it feels slightly odd to sit at my desk and have nothing really obvious to write about. I suppose I could rant a little more about Trump and how everything seems to be collapsing around him. Or how, if the Orange One decides to go to war with North Korea, stock markets and financial businesses around the world might be well and truly screwed. As well as the small matter of a nuclear winter. But, like most reasonable-thinking people on this planet, I’m tired of Trump taking up far too much space in my already overloaded brain. Or how about more on Brexit? Well, to be honest, I’m pretty bored of that as well. The Channel Islands, quite understandably, are keeping their powder dry while waiting to see how the Brexit negotiations pan out. And until we actually know what the upshot’s going to be, there’s very little to add – aside from more speculation. Besides, there’s no doubt I’ll come back to that again in future. Then there’s the heartbreaking rise in terrorism. It seems barely a week goes by without a vehicle being driven at a group of people in a crowded tourist location. But I’m not sure what more I have to say on the matter, except to add my voice to those who decry such violence and send heartfelt condolences to the victims and their families.

ONWARDS, EVER ONWARDS So, as I sit here twiddling my thumbs, starting a sentence only to delete it and start over again, I find myself thinking about the passing of time. One of the phrases I seem to have heard more than any other in the past month is: ‘Where’s the year gone?’. It’s hard to believe that summer is over and we’re hurtling towards the bank-account-emptying horror show that

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is Christmas. But really, where has the year gone? Indeed, where have the past nine years gone? I say nine years, because it’s been that long since I started working on BL. And in that time, I’ve moved house five times – I might have even ended up in Jersey, had the Population Office in its ‘wisdom’ decided not to grant me a licence. Also in that time, my Mum has passed away, my nephews and nieces have all grown up, and I’ve gotten far too grey. The relatively quiet summer break has also given me the opportunity to reflect on what’s happened in the Channel Islands since the magazine began. And I can’t help but feel that the answer is quite a lot and not a lot at all. Finance remains the strongest industry in the islands, and has moved to meet the challenges of regulation since the financial crisis, as well as developing new offerings. But in truth it seems to be holding steady rather than booming. Tourism didn’t quite die the painful death that many predicted. And technology didn’t become the massive income generator that others had hoped for. I can only wonder how long the situation is going to continue as it is. In our round table feature in this issue, four Channel Island experts take a long, hard look at how technology is actually being used across the islands – not only in finance, but in other areas. And exactly what needs to be done in the future if the most is to be made of that technology for the benefit of the islands. As Ricky Magalhaes at Logicalis comments in that piece: “We’re living in a highly competitive space, and finance has a short life left, so we need to pivot and adapt.” Let’s see how right he is come 2026. n

One phrasE I’ve heard more than any other in the past month is: ‘Where’s the year gone?’

Nick Kirby, Editor-in-Chief, BL magazine

september/october 2017 3

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Contents

INSIDE

BL guernsey Guernsey insurer issues Blockchain note

om Re IC, a Guernsey-domiciled ILS reinsurance transformer and incorporated cell of Solidum Re (Guernsey) ICC, has, with its most recent placement, issued one of the first notes to have been digitised on a private blockchain. Referred to as the ILSBlockchain, the mechanism has replaced the role of a traditional settlement system such as Euroclear or DTC for this note issue. Dom Re IC issued $14,800,000 Principal-atRisk, Participating Notes, due 2023 – an asset-backed securitisation of a reinsurance contract – to a total of six investors. Solidum Re acts as the paying agent and common depository of the permanent global note. It also acts as the blockchain permission grantor and blockchain sponsor. The investors subscribed for the notes, paying into a Guernsey trust where Artex Risk Services (Guernsey) acts as trustee. On the issue date, the paying agent created cryptographically certificated notes on the ILSBlockchain and then the investors were able to execute, peer-to-peer with the paying agent, delivery-vs-payment transactions on the ILSBlockchain to purchase the newly created notes.

Investors now hold their notes, cryptographically confirmed, on the ILSBlockchain. Secondary market traders wishing to purchase notes can do so by becoming participants on the ILSBlockchain and can then execute direct peer-to-peer delivery-vs-payment transactions to buy and/or sell notes seamlessly. Equally, broker-dealers can become participants on the ILSBlockchain in order to intermediate trades between the other participants. Cedric Edmonds, Director of Solidum Re, who was key in the design and implementation of the ILSBlockchain and surrounding structural mechanics, said Dom Re required an alternative to Euroclear. It was becoming increasingly difficult to access Euroclear efficiently for smaller private placement note issues. He added: “Without the support and flexibility of the service providers in Guernsey, most notably Artex, which picked up the baton at a late stage from another service provider, completing this would not have been possible.” n

Altair opens Guernsey office

ltair, a provider of independent non-executive directors and related services to the alternative investment market, has opened an office in Guernsey. The new operation, Altair Guernsey, is led by Managing Director Michel Davy, who currently works alongside Director Sandra Platts. They plan to add to the team in due course. Davy, who helped set up the Guernsey business, has been a Director at Altair since 2015. He said: “With the everincreasing drive for substance on boards and effective corporate governance, the need for independent directors with relevant expertise and asset class

experience has never been greater.” Founded in Jersey in 2012, Altair’s clients include private equity, real estate and hedge funds, listed companies and investment banks. n

Pictured (l-r): Sandra Platts, Michel Davy and Anne Ewing (Non-Executive Chairman)

States publishes API requests

teps have been taken to further strengthen the operational implementation of the States of Guernsey’s Code of Practice for Access to Public Information. Following a review by the Policy & Resources Committee in early 2017 on the effectiveness of the code and how it’s being applied, the Committee agreed the following steps to further enhance the code’s effectiveness: ● All Access to Public Information questions and responses will be published on gov.gg ● Work will be carried out to promote awareness of the code in the public service ● Work will be done to promote awareness of the code with the general public ● The Chief Information Officer will be tasked with reviewing any decision where an exemption has been used under the code All 58 API requests and responses since the code was agreed have now been published – these can be found at www.gov.gg/information. A short guidance document has also been produced to set out the States of Guernsey’s process for dealing with the publication of reports commissioned by government and requests for information under the code. This is the most up-to-date process for the operational implementation of the code and has been published at www.gov.gg/information. During the review by P&R, it was noted that there was a lack of consistency in how exemptions were being applied across government. As such, it was agreed that, going forward, the Chief Information Officer would be responsible for reviewing any decision where an exemption has been applied before the response is finalised. Colin Vaudin, States of Guernsey Chief Information Officer, said: “The code’s purpose is to establish a consistent standard for the disclosure of public information. The Policy & Resources Committee agreed to these changes – to the administration of the code of practice – as a means to further improve government transparency on information” n

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46 7 News

31 TAX

A round-up of the latest Channel Island business news

How constant changes to tax regulation are putting directors and NEDs at a higher compliance risk

12 Appointments

ART DIRECTOR Angela Lyons SUB EDITOR Kate Wheal ADVERTISING sales@blglobal.co.uk NEWS AND EDITORIAL news@blglobal.co.uk GENERAL ENQUIRIES enquiries@blglobal.co.uk

Recent key appointments for firms in Guernsey and Jersey

18 Interview Charlotte Valeur, Founder of Board Apprentice, explains why board diversity is essential

Finance 24 global investing Given all the uncertainty around the world, why are stock markets heading up, not down?

28 beneficial ownership Always wanted to know the big deal about beneficial ownership? Our guide explains all

JACK FLANAGAN

© Chameleon Group Limited, all rights reserved. Reproduction in whole or in part without written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views or policies of Chameleon Group. While every effort is made to achieve total accuracy, Chameleon Group cannot be held responsible for any errors or omissions.

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uernsey-headquartered Freedom Asset Management, which launched at the end of 2015, is expanding beyond Europe following the amalgamation of the Somerset Capital Fund with its own Guernsey-based protected cell company (PCC), Opus Global Cautious Fund. The move brings together Somerset Capital’s mainly Canada-based clients with Freedom’s European client base. The aim is to build out Freedom’s Canadian client hub and develop Canadian fund products for the European institutional market. Under Canadian regulation, the amalgamation of Somerset’s Maltese structure and the Guernsey fund was possible without triggering an event for the investors. As part of the amalgamation, Freedom has appointed Laurie Winters, owner of Vancouver Financial Planning, to the investment committee of the Opus Global Cautious Fund, and David Birnie, Senior Vice President of Conair Group, to the board of Freedom Global Funds. n

Attendees a

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Sales boom in housing market

37 regulation

business 46 digital nomads Ever wanted to work from a beach in Thailand? Now’s the time to grab your passport and pack a bag

he latest House Price Index from Skipton International shows house sales in Jersey are at their highest levels since 2006, with 424 properties sold in the island during Q2 2017. This is a 28 per cent increase on the same period last year (331 transactions) and a 32 per cent increase on Q1 2017 (321 transactions). House prices in Jersey are up two per cent on the previous quarter, with the average house now worth £460,000. The biggest price rise from Q1 2017 was for two-bedroom houses – with the average property increasing in value by £20,000. The average value of a four-bedroom house decreased by £6,000 over the same period.

Lorraine McLean, Mortgage Sales Manager at Skipton, said: “It’s important never to take any quarter in isolation. The price of an average four-bedroom property has risen faster than other categories in past quarters, growing in value from around £700,000 in 2015 to £804,000 today. “Transaction levels for four-bedroom properties are still high – with a total of 49 properties sold this quarter compared with 45 for the same period last year. A minor price drop can be due to a natural fluctuation such as a small decrease in sales of higher value properties.” n

Jersey retains S&P rating

Brexit Review Panel set up

Popu meas

redit rating agency Standard & Poor’s (S&P) has re-affirmed the sovereign credit rating for Jersey as AA-/A-1+ with a stable outlook – one of the highest possible ratings. Its analysis is largely based on updated information from S&P’s last visit to the island in January, when it met politicians, civil servants, regulators and business representatives. The rating committee agreed the updated information confirmed that all key rating factors were unchanged. S&P highlighted the island’s ‘strong and flexible institutions, wealthy economy and considerable fiscal buffers’. It also noted: ● Strong performance in Jersey’s nonfinance sector led to solid GDP growth in 2016, though Brexit uncertainties will likely flatten GDP growth over its threeyear forecast horizon ● A strong outturn in headline general government revenue has improved Jersey’s fiscal balance ● A belief that fiscal deficits will gradually decline, to a balanced position by 2019. The report said: ‘The stable outlook reflects our view that, over the next three years, the risks to Jersey’s financial sector and its fiscal performance will be balanced by its significant economic resilience.’ n

Jersey Finance issues update on Strategic Review

n 2013, Jersey Finance commissioned a strategic review of Jersey’s finance industry, which set out a blueprint for the future of the island’s financial services industry. At the time, a total of 21 initiatives across Jersey Finance, government and the Jersey Financial Services Commission were identified. These are still at the heart of the strategy and Jersey Finance reports much progress has been made in delivering these. However, in light of the triggering of Brexit and other significant changes and developments within the finance industry, particularly in the digital arena, it was felt that a review and update of the strategy was much needed. Work on the project began in May. Jersey Finance has held a number of workshops and conducted some 50 interviews with representatives from the finance industry, government and the regulator for the two main workstreams of the project: ● Workstream A has been focused on potential outcomes of

Brexit, where Jersey Finance has been able to assess the Brexit landscape, analyse possible scenarios and the impact on Jersey, with a core focus on the financial services sector. ● Workstream B has been focused on digital development, where Jersey Finance has been able to assess the status of digital development in Jersey’s finance industry. The organisation has created, analysed and refined a long list of potential initiatives which will be scoped out further in phase two of the project. The work on the first phase of the project has been concluded, and Jersey Finance is due to reconvene to start phase two during September. The period between the two phases of the project allowed the organisation to continue to monitor the political landscape over the summer, as conversations between the EU and the UK progressed, allowing it to further assess and scope the digital initiatives identified. n

16 september/october 2017

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16 bl Jersey A review of the biggest business developments and finance news stories

Are businesses or clients the ones who ultimately bear the cost of the regulation and compliance burden?

53 managing anxiety

40 guernsey pensions

56 protecting IP

What the recent regulation changes mean for individuals, and for those looking after their pensions

Think you’ve created the ‘next big thing’? Then don’t let someone come along and steal the idea from you

technology 42 tech round table

60 bias in the workplace

The Agenda

Four experts give their uncompromising views on the future of technology in the Channel Islands

We all like to think we’re liberal and unbiased – but it seems that might not be the case

It’s oranges, browns and golds ahoy, as our lifestyle section basks in an Indian summer

We all know about stress at work, but is anxiety the big issue we’re not talking about?

The BL Global Discussion Forum

Office: Meadowlands, La Rue a la Dame, St Saviour, Jersey JE2 7NQ

contributors

Freedom expands beyond Europe

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BL jersey

EDITOR-IN-CHIEF Nick Kirby nick.kirby@blglobal.co.uk

The latest financial and business news and views from the bailiwick

MAGAZINE

CEO, CHAMELEON GROUP Carl Methven carl.methven@blglobal.co.uk

Flex prov

uernsey has witnessed a notable inward migration of companies, funds and other structures in the first half of 2017, according to figures from the Guernsey Registry, which tracks migrations in and out of the island. There were 32 company migrations to Guernsey during the first six months of the year. With 15 companies migrating out, this represents a net inward migration of 17 companies moving their domicile to Guernsey so far this year. The latest figures build on 83 company migrations to Guernsey in 2016 and 26 out, signifying a net growth of 57 company migrations. Alan Bougourd, Registrar at the Guernsey Registry, said the migrations this year include investment holding companies, fiduciary and nominee companies, limited partners and loan administrators. “The registry is noticing a flight-to-quality and receiving positive feedback on the ease of the migration process and the responsiveness of the registry to the applications received,” he said. Dominic Wheatley, Chief Executive of Guernsey Finance, said the inward migration of companies to Guernsey was to be welcomed. But it wasn’t unexpected, as it comes at a time when increased global scrutiny of standards of transparency and regulation have been pushed to the forefront of clients’ minds, particularly in the aftermath of events such as the Panama Papers. n

14 bl guernsey

BL BL is published six times a year by Chameleon Group +44 1534 615886 www.blglobal.co.uk

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Company migration looks positive

While mental health issues are being more openly talked about in the workplace, business writer Jack questions whether enough action is being taken to help those who suffer from anxiety.

BEN JORDAN

Freelance writer Ben spends much of his time tapping away on his laptop while lounging in a hammock on a beach in Cambodia. He’s what they call a digital nomad – and we aren’t in the least bit jealous...

KIRSTEN MOREL

When we need someone to make sense of something complicated, BL regular Kirsten is our go-to guy. This time around, he tackles the complicated and thorny issue of beneficial ownership.

DAVE WALLER

One of two writers that have been with BL since its humble beginnings, business journalist Dave handles this issue’s cover story, and investigates who really pays the cost of increased financial regulation.

september/october 2017 5

ollowing the commencement of formal Brexit negotiations between the United Kingdom and the European Union, a Brexit Review Panel has been formed to scrutinise Jersey’s policy towards the UK’s exit from the EU. The panel has taken on responsibility for scrutinising how the States of Jersey is preparing for Brexit and the specific changes to legislation that will follow Jersey’s Repeal Bill, expected later this year. Members comprise representatives from each of the existing scrutiny panels. They include: Deputy John Le Fondré, Chairman; Deputy Simon Brée, Vice-Chairman; Deputy David Johnson, Panel Member; Deputy Richard Renouf, Panel Member; Deputy Jeremy Maçon, Panel Member. The Chairman, Deputy John Le Fondré, commented: “It is important that a panel with such a significant responsibility has been formed. Whilst we are not in the EU, the UK negotiations for Brexit will affect every islander in some manner. As such, effective scrutiny of both the strategy that the government has taken for navigating Brexit, and the changes to legislation that will occur, is vital.”n

Jersey’s first Lean In Circle launched

ippa Davidson (pictured), Head of Funds at Fairway Group and this year’s Jersey IoD Young Director of the Year, has launched Jersey’s first Lean In circle to support women in business. The initiative follows Sheryl Sandberg’s book, Lean in: Women, Work and the Will to Lead. Since its launch in 2013, 33,000 Lean In circles have been set up in over 150 countries. Regular meetings encourage members to take on challenges and opportunities and step out of their comfort zones. Davidson said: “Being named IoD Young Director of the Year made me reflect on my career and how it’s been shaped by mentoring and leadership training. I also knew there was an appetite from female business leaders to offer guidance to women in the workplace, and came across Lean In and the amazing initiative and resource the foundation provides.” The next Jersey Lean In event, in October, will focus on ‘Getting your voice heard’. Visit www.leanin.org or email Pippa Davidson at p.davidson@fairwaygroup.com. n

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Final speakers confirmed for Channel Islands Funds Forum

AI to be focus of CIPR forum

BL EVENTS HAS announced the final speaker line-up for the Channel Islands Funds Forum: ‘A Sharper Focus’ – the largest annual funds conference in Guernsey and Jersey. The event is produced in partnership with PwC, sponsored by Appleby, JTC Fund Services and Optimus Group, and supported by Altair, Puritas and Rossborough Professional Risks. It takes place from 11am-5.30pm on 27 September at the Radisson Blu in St Helier. It will be preceded by a presentation from Preqin on where the Channel Islands sit in the global alternative assets industry, and followed by drinks and networking. As in previous years, the conference will bring together funds practitioners from the Channel Islands and beyond to discuss the challenges, opportunities and issues that are dominating the funds space right now. The full speaker line-up is as follows: ● Emma Bailey, Director, Investment Supervision and Policy Division, Guernsey Financial Services Commission ● Amy Bensted, Head of Hedge Funds, Preqin ● Mark Boleat, Deputy Chairman, Policy and Resources Committee, City of London Corporation ● Amy Bryant, Chief Operating Officer, Jersey Finance ● Mike Byrne, Chairman, Jersey Funds Association ● Tom Carr, Head of Real Assets Products, Preqin ● Lisa Cawley, Partner, Kirkland & Ellis, London ● Gavin Farrell, Partner, Ferbrache & Farrell, Guernsey ● Christopher Griffin, Counsel, Carey Olsen, Jersey ● Michael Johnson, Head of Fund Services, Intertrust ● Mike Jones, Director of Policy, Jersey Financial Services Commission ● Niamh Lalor, Partner, Ogier, Jersey ● Fiona Le Poidevin, CEO, The International Stock Exchange ● Gurpreet Manku, Assistant Director General, BVCA

THE ROLE OF artificial intelligence (AI) in the communications profession will be a focus of the Channel Islands PR Forum 2017. ‘PR 2022 – Future Communications’, hosted by the Channel Islands Group of the Chartered Institute of Public Relations (CIPR), will examine emerging trends, such as technological developments, that will affect public relations over the next five years. AI specialist David Phillips will explore the opportunities and challenges posed by the automation of public relations. A Fellow of the CIPR and visiting Professor of Online Public Relations at the University of Lisbon, Phillips began his PR career as a political agent for the Conservative Party 50 years ago. He has since established Phillips & Company and the communications evaluation agency Media Measurement. The author of several books, he now acts as an independent adviser to international organisations including the Bank of England. Other speakers at the event include Tara Cunningham, Founder of Northern Irish consultancy IslandSky, and Andrew Bruce Smith, Managing Director of London consultancy Escherman. They will look at emerging trends and the implications for PR as a management discipline. The event will be held on 20 September at the Digital Greenhouse in Guernsey. It is open to CIPR members and non-members. Bookings can be made through Eventbrite. n

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● Robert Mellor, Tax Partner, PwC, London ● Adam Moorshead, Managing Director, Guernsey, JTC Group ● Cathy Pitt, Partner, CMS Cameron McKenna Nabarro Olswang ● Ben Robins, Partner, Mourant Ozannes, Jersey ● Paul Smith, Chair, Guernsey Investment Funds Association ● Scott Spencer, Senior Investment Manager, Ravenscroft Investment Management, Jersey ● Patricia Volhard, Partner, Debevoise & Plimpton, London (pictured) ● Andrew Weaver, Partner, Appleby, Jersey ● Dominic Wheatley, Chief Executive, Guernsey Finance ● Paul Wilkes, Group Partner, Collas Crill, Guernsey Carl Methven, CEO of BL Global, said: “We’re always humbled by the calibre of speakers willing to give their time to take part in this conference. Their views and insights are what always makes for a fascinating and thought-provoking day.” The conference will comprise a variety of sessions and panels covering a wide range of subjects, as follows: ● What’s happened in the Guernsey and Jersey funds industries in the previous year ● The global geopolitical landscape and its impact on funds ● A panel of experts from outside the Channel Islands give their take on the funds industries in Guernsey and Jersey ● Channel Islands practitioners respond to points raised in the previous session ● An update on the latest tax issues ● Where the funds industry will gain business in the near future ● What next for funds? Key challenges and opportunities in the coming year. Full conference tickets are priced at £395 (discounts for block bookings) or for the Preqin seminar only, £40. Visit www.cifundsforum.com or email Carl Methven at events@blglobal.co.uk n

september/october 2017 7

News

Done Deals

Aurigny to stop flights to London City airport AURIGNY IS TO stop flights to London City Airport from October due to a lack of demand and high operational costs. According to a report by ITV, the States of Guernsey-owned airline intends to refocus its efforts on other routes, particularly London Gatwick. Aurigny CEO Mark Darby said: “The decision to end our London City service was not taken lightly, but after considerable effort and investment, it has just not proved to make commercial sense. There are a number of key factors at play, not least the high costs of operating to London City and the lack of demand for the route.” The airline says that, despite its promotional efforts over the past two years, more than 50 per cent of seats were empty. The President of the States of Guernsey’s Trading Supervisory Board, Deputy Charles Parkinson, commented: “We support the decision to cease the London City operations as it is a loss-making route. There is considerable pressure on Aurigny to improve its financial position and I know this is something its board takes very seriously. Indeed, the revised shareholder objectives that have been recommended following the review include a requirement for Aurigny to move to a sustainable operating surplus.” n

Channel Islands at ‘turning point’ for data protection THE STATES OF Jersey and Guernsey are being urged to ensure that sufficient resources are allocated to meet the challenges and opportunities of data protection. Emma Martins, the independent data protection regulator in Jersey and Guernsey, says the Channel Islands are at a ‘turning point’ for data protection – and this increasingly complex area requires appropriate levels of investment. Ensuring the islands work together is essential to reap the economic benefits of data protection, says Martins, the Information Commissioner for Jersey and the Data Protection Commissioner for Guernsey. Her comments came as her office published its annual report, highlighting how a growing workload is putting pressure on resources. Her team is helping lead the implementation of a major new data protection law, to reflect the requirements of the European General Data Protection Regulation (GDPR), which is applicable from May 2018. They are tackling a rise in the number and complexity of complaints, and running a campaign to inform people of their rights and responsibilities. Work is also under way to strengthen the regulator’s independence from government in terms of IT and legal help. The Annual Report can be viewed at www.dataci.je. n

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Carey Olsen’s Jersey team acted as lead Counsel on the launch of first-time fund, the AVI Frontier Fund I. The fund will invest in a series of South-East Asian companies listing on the Vietnamese Stock Exchange and allows investors to hand pick which companies to invest in. It is structured as a Jersey limited partnership under Jersey’s Private Fund regime. Partner Robin Smith and Counsel Chris Griffin led the Carey Olsen team, assisted by Associate Katrina Lindsay. Collas Crill has advised Freedom Select Funds (FSF) in converting to Guernsey’s new Private Investment Fund (PIF) regime. FSF is managed by Freedom Asset Management (FAML) and was established as a registered closed-ended fund in 2016. The Collas Crill team, including Group Partner Paul Wilkes and Associate Alex Wickens, played a key role in the conversion, acting as lead Counsel to FAML. JTC, in partnership with law firm Carey Olsen and investment manager Global Advisors Holdings, is to provide fund administration and corporate services to one of the world’s first regulated crypto-denominated funds. CoinShares Fund I, which launched on 23 June, is a self-managed fund that will receive investment exclusively in Ether, the ‘crypto-fuel’ that runs the Ethereum platform. The fund will then trade cryptocurrencies and other tokens – or ‘coins’ – including participating in selected initial coin offerings (ICOs). JTC will provide a range of services, including directors, company secretary, fund administration, fund accounting and investor reporting. Partner James Mulholland led the Carey Olsen team, assisted by Counsel Chris Griffin. Guernsey-incorporated The Prospect Japan Fund (TPJF) has been acquired by Japanese-based Prospect Co in a $147 million takeover. TPJF, which is listed on the London Stock Exchange Main Market, was advised by Mourant Ozannes’ Guernsey team. The offer was an all-share offer of Japanese listed shares and is believed to be the first of its kind in the UK. It was completed via a Guernsey scheme of arrangement. Partner Caroline Chan led the Mourant Ozannes team advising TPJF, assisted by Corporate Counsel Alex Davies and Corporate Associate Alana Nisbet, with litigation Partner Abel Lyall assisted by litigation Associate Ryan Hallett. Disruptive Capital has chosen Guernsey for its latest fund launch – the Secondary Disruptive Fund – with Ogier’s Guernsey investment funds team advising on the local aspects of its establishment and close. The closed-ended collective investment scheme successfully closed at its targeted total commitments. Partner Bryon Rees and Associate Michelle Watson Bunn led the Ogier team in Guernsey, and worked with lead Counsel Weil, Gotshal & Manges. n

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News

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News

PraxisIFM granted fund licence in Abu Dhabi PRAXISIFM HAS become one of the first fund administrators to be authorised in the Abu Dhabi Global Market (ADGM) to offer fund administration services. It now has a licence to act as an administrator of collective investment funds. Last year it was authorised to provide trust services in the region and claims to be the only authorised trust company in the UAE operating from a regulated offshore location. “ADGM is a strategic platform in the Middle East for foreign investment advisers looking to invest in the region or attract Middle East investors,” said Chris Gambrell, Managing Director of Praxis Fund Holdings. “It offers an attractive alternative jurisdiction where funds can be domiciled or fund administration carried out. It’s somewhere ‘local’ for Middle East clients.” n

euro VC fundraising hits decade high EUROPEAN VENTURE CAPITAL fundraising in 2016 hit €6.4bn – the highest level since 2007 – according to Invest Europe report The Acceleration Point: Why Now is the Time for European Venture Capital. Nearly 10 per cent of this capital was from North American institutional investors, as Europe’s growing economies, investment ecosystem and tech industry make it an attractive investment destination. Invest Europe’s data shows that VC fund sizes are increasing, with 13 funds raising in excess of €100 million last year. This is set to increase further this year with a €400 million EU-backed fund-of-funds to facilitate investment from large institutional investors. Of the €4.3bn total VC investment in Europe last year, fund managers invested 44 per cent into companies specialising in IT and communications. The second highest amount (27 per cent) went to biotech and healthcare, a sector in which European businesses have a strong track record. The remaining capital was invested in companies focused on energy, financial services, consumer products and business services, according to Invest Europe data. n

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MERGERS AND ACQUISITIONS Estera has acquired corporate and trust services business Headstart, based in Luxembourg. The deal will allow the company to expand into Luxembourg, which it sees as a key jurisdiction for funds and corporate services, and to broaden its offerings. Headstart Managing Directors Christophe Gaul and Manuel Mouget will continue to lead the business. The company, whose clients include private equity and real estate firms, institutional clients, corporates and high-networth individuals, will rebrand to Estera this September. First Names Group has acquired the fiduciary arm of Isle of Man law and professional services group Cains, following regulatory approval. Part of the Cains Group, Cains Fiduciaries is based primarily in the Isle of Man and provides fiduciary and accounting services to around 150 client groups with assets under administration in excess of £10bn. The firm will be fully rebranded to First Names Group and the team will join their new colleagues in First Names House, Douglas, Isle of Man. Fund administration firm Maitland has acquired Guernsey-based R&H Fund Services. Other Rawlinson & Hunter businesses in the Channel Islands – R&H Trust Co (Guernsey), Rawlinson & Hunter and R&H’s Jersey businesses – have a separate ownership structure and don’t form part of the transaction. Maitland will offer its full range of institutional client services through the Guernsey office, including long-only fund administration, transfer agency, hedge funds, private equity and real estate administration services. Trust and corporate fiduciary service provider New Street Management has acquired Guernsey-based

Liberation Management. Following the acquisition, which has received regulatory consent in Guernsey, Liberation’s employees will remain on the island with the business and join the New Street Management team in their Les Echelons offices. Director Bruce Currie will join the New Street Management board. Ocorian has entered into a definitive agreement to purchase independent fund administration and corporate services provider MAS International. The business operates in Luxembourg and Mauritius and is represented in the US. The deal is subject to regulatory approvals and is expected to close towards the end of 2017. The acquisition expands Ocorian’s international presence and service capabilities, providing further depth for its existing jurisdictions. SandpiperCI has reached agreement to buy iQ, the only Apple Authorised Premium Reseller and official Apple Service Provider in the Channel Islands. iQ is a well-established retail business with shops in Jersey and Guernsey. The acquisition will further Sandpiper’s strategy to grow through new and existing partners and brands. The transaction is subject to clearance from the Channel Islands Competition and Regulatory Authorities. Global business services provider TMF Group is to acquire Guernseyand Luxembourg-based fund administration services provider Gentoo Holdings. Founded in 2011 with a team of 17, Gentoo handles regulated and unregulated funds, and offers depositary services and corporate and domiciliation services. It now has 50 staff. Completion of the deal is subject to regulatory approval in Guernsey and Luxembourg. n

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ogier.com

Whether itâ&#x20AC;&#x2122;s an established company, a family business, an entrepreneurial start-up or the local arm of a larger operation, what businesses in the Channel Islands need to thrive in an ever-changing economy are trusted advisors who understand how to take advantage of opportunity, manage challenges and mitigate risk. Ogierâ&#x20AC;&#x2122;s local legal services team covers property, employment and regulatory law. We work with clients who are buying or selling a business, entering into a joint venture or restructuring, as well as advising on day to day issues from financing and corporate governance to contracts.

Local legal services Business and commercial law Competition law Dispute resolution Employment law Offshore relocations Personal and family law Planning and environment law Property and construction law Regulatory law Trusts Advisory Group Wills, probate and estate planning

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News

Appointments Intertrust has appointed Michael Johnson to the role of Head of Funds in the Channel Islands. Michael will be responsible for developing the funds strategy across Jersey and Guernsey, with a focus on private equity, debt and real estate fund administration. He previously held the post of Head of Fund Services at BNP Paribas, and he has also worked in London, where he specialised in overseeing outsourced investment mandates for Swiss Re Asset Management. A chartered accountant, Michael is now a committee member of the Jersey Funds Association.

Paula Fry has joined Appleby’s Private Client and Trusts team in Guernsey as a Senior Associate. She will advise on all aspects of trust law, including the establishment, restructuring and winding up of private, charitable, purpose and commercial trusts and foundations. Paula qualified as a solicitor in England and Wales and has spent the past five years working with Carey Olsen in Guernsey, focusing on trust and private wealth matters. A qualified member of STEP, she spent her early career with solicitors based in the UK, most recently Turcan Connell and Humphries Kirk.

Fund and corporate services provider the Aztec Group has promoted Paul Conroy to Director within its Jersey-based Real Assets team. Paul joined the group in 2014, following a 10-year tenure with consultancy PwC, where he gained multijurisdictional experience in Jersey, London and Melbourne. Since joining the Aztec Group, he has been involved in building the Real Assets product offering and growing the client base and team. In his new position, Paul will continue to lead a large client portfolio and will undertake formal responsibility for the Real Assets team located in Jersey.

PwC has appointed Neil Howlett as Partner with responsibility for the advisory team across the Channel Islands. Neil has been with the PwC network for 15 years, having joined the firm’s graduate training programme. He has since worked in Continental Europe, the US, India and the UK. Based in Jersey since 2011, Neil has extensive knowledge of forensics and transaction services, and specialises in financial services risk and regulation. He was instrumental in the establishment of PwC’s advisory business in the Channel Islands back in 2011, which now includes 35 consultants.

Guernsey law firm Walkers has promoted Kim Paiva to Senior Counsel. A corporate and finance lawyer, Kim joined AO Hall – which became part of Walkers last year – as an Associate in 2010, having moved from her native South Africa. She was promoted to Senior Associate four years later. In her new role, Kim will be responsible for establishing her own practice areas and client base. She commented: “Since we merged with Walkers, we have received an increasing number of aircraft financing and off-lease registration work – a new area of business that’s come out of the Walkers network.”

Financial services provider Sanne has appointed Sam Metland as its Director of Product Development. Sam brings to his new London position more than 10 years of experience in New York, Luxembourg, Singapore and the Channel Islands. He joins from Brown Brothers Harriman, also in London, where he was Head of Alternative Products. His career has also included a period with Mourant International Finance Administration – subsequently bought by State Street – in the Channel Islands. In his new role, Sam will help develop an integrated client services business strategy.

Finding the best brains in the business... 12 march/april 2017 www.kendrickrose.com

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The Jersey Society for Chartered and Certified Accountants has named Paul Woodman (pictured) as President and Wendy Martin as Vice President. Paul, who is Finance Director and COO at the Jersey Pottery/JP Restaurants Group, has practised in Jersey for 10 years. He spent five years at Deloitte and has served on the tax and finance committee of the Institute of Directors. Wendy is Head of Tax at EY Channel Islands and has over 20 years of experience advising clients on tax matters. She was Head of Tax Policy in the Jersey government, where she negotiated agreements with the US and UK.

Tim Rattray has been named Managing Director of Vantage Insurance Brokers. Previously the Managing Director of Rossborough Insurance in the Isle of Man, Tim has relocated to Jersey to lead the broking operation. Tim has over 30 years’ experience in insurance, starting with an Isle of Man independent brokerage. He then relocated to London, where he spent 15 years with brokers Oval and Jardine Lloyd Thompson, dealing with insurance for mainly FTSE 250 companies. Tim relocated to the Isle of Man in June 2005 to open a brokerage for Rossborough, a position he held for 12 years before moving to Vantage.

Locate Guernsey has appointed private client lawyer Edward Stone as its Strategic Residence Consultant. His focus will be on business development and representing the agency in the UK. Edward already has business connections with the island, having served as Group Partner for Collas Crill between 2012 and 2015. He has more than 20 years of experience advising high-net-worth individuals, trustees, beneficiaries and settlors on wealth succession planning and on questions of residence. Before joining Locate Guernsey, he was a Partner at UK-based law firm Irwin Mitchell.

Channel Island marketing, creative and digital agency Oi has recruited Paul Le Breton to its Jersey office as its first Head of Creative, working alongside the firm’s Guernsey Head of Creative, Mark Ferneyhough. Paul has been in the industry for 29 years, having started his career in the studio at Arena Printers and OTL. He joins Oi from Advertising International, where he has spent the past 22 years as Studio Manager. He has a wealth of experience working on a range of campaigns for local, national and international clients in the financial, health, law, charity, leisure and retail sectors.

Guernsey fiduciary firm Imperium Trust Company has named Roy McGregor as its Chairman, following the retirement of Peter Snowden. Roy moved to Guernsey in 2006, as CEO of Credit Suisse’s businesses in the Channel Islands. During his 36-year career in financial services, he has held senior positions for international organisations including Coutts & Co, SG Hambros, NatWest and PwC, and has worked in financial centres in Europe and Asia. At Credit Suisse, he sat on 22 boards or branch management committees in both executive and internal non-executive roles.

Collas Crill has recruited funds, corporate and regulatory lawyer Dilmun Leach to its commercial department in Jersey. Dilmun joins as Group Partner, leading the firm’s investment funds practice. Prior to joining Collas Crill, he worked for nearly three years at Ogier in Jersey, having spent the previous five years with Herbert Smith in London. Dilmun’s funds practice includes acting on the launch of investment funds and their satellite vehicles. He has also worked with fund managers, investing in asset classes including private equity, real estate, oil and gas, infrastructure and virtual currency.

We call it resourcing excellence. www.blglobal.co.uk march/april 2017 13 info@kendrickrose.com

BL guernsey Guernsey insurer issues Blockchain note

Altair opens Guernsey office

14 september/october 2017

experience has never been greater.” Founded in Jersey in 2012, Altair’s clients include private equity, real estate and hedge funds, listed companies and investment banks. n

Pictured (l-r): Sandra Platts, Michel Davy and Anne Ewing (Non-Executive Chairman)

States publishes API requests

teps have been taken to further strengthen the operational implementation of the States of Guernsey’s Code of Practice for Access to Public Information. Following a review by the Policy & Resources Committee in early 2017 on the effectiveness of the code and how it’s being applied, the Committee agreed the following steps to further enhance the code’s effectiveness: ● All Access to Public Information questions and responses will be published on gov.gg ● Work will be carried out to promote awareness of the code in the public service ● Work will be done to promote awareness of the code with the general public ● The Chief Information Officer will be tasked with reviewing any decision where an exemption has been used under the code. All 58 API requests and responses since the code was agreed have now been published – these can be found at www.gov.gg/information. A short guidance document has also been produced to set out the States of Guernsey’s process for dealing with the publication of reports commissioned by government and requests for information under the code. This is the most up-to-date process for the operational implementation of the code and has been published at www.gov.gg/information. During the review by P&R, it was noted that there was a lack of consistency in how exemptions were being applied across government. As such, it was agreed that, going forward, the Chief Information Officer would be responsible for reviewing any decision where an exemption has been applied before the response is finalised. Colin Vaudin, States of Guernsey Chief Information Officer, said: “The code’s purpose is to establish a consistent standard for the disclosure of public information. The Policy & Resources Committee agreed to these changes – to the administration of the code of practice – as a means to further improve government transparency on information.” n

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BL Guernsey

Company migration looks positive

Flexible working proving popular

Freedom expands beyond Europe

recent survey of professionals working across Guernsey’s business community has revealed that 76 per cent had requested flexible working hours and, of those, 90 per cent had had their request granted. Some 77 per cent also agreed that their workplace supported flexible working. The statistics were from the recent Female Friendly Employment Legislation seminar, hosted by the Women’s Development Forum and debated by lawyers from Mourant Ozannes. The data suggests that Guernsey employers are more open to flexibility than is commonly thought. The session included an active debate on the pros and cons of flexible working, as well as a case study into the practicalities of introducing flexible working policies. The speakers agreed that communication, careful planning and a shift in business culture/ mindset were essential for flexible working. A large number of respondents also thought that offering flexibility enhanced staff retention (93 per cent) and increased productivity (74 per cent). The speakers discussed the risks of flexible working if proper policies and procedures aren’t put in place. A third of respondents thought accessing flexibility still held back women’s career progression. A large majority also believed flexibility can cause problems for employers in terms of protecting confidentiality, maintaining profitability and servicing clients and customers. Jessica Roland, Managing Partner at Mourant Ozannes in Guernsey, said: “The findings have been useful in identifying whether businesses should be offering their employees flexible working hours and the possible impacts on businesses. We received interesting information, which revealed that, while three-quarters had sought flexibility to care for children, a substantial number had also sought flexibility to study or retrain (23 per cent).” She added: “The results suggest that flexibility in the modern age isn’t exclusively about caring for children, although childcare does remain a key driver.” n

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Attendees at the Female Friendly Employment Legislation seminar

september/october 2017 15

BL jersey Jersey retains S&P rating

C Sales boom in housing market

Jersey Finance issues update on Strategic Review

16 september/october 2017

Brexit, where Jersey Finance has been able to assess the Brexit landscape, analyse possible scenarios and the impact on Jersey, with a core focus on the financial services sector. ● Workstream B has been focused on digital development, where Jersey Finance has been able to assess the status of digital development in Jersey’s finance industry. The organisation has created, analysed and refined a long list of potential initiatives, which will be scoped out further in phase two of the project. The work on the first phase of the project has been concluded, and Jersey Finance is due to reconvene to start phase two during September. The period between the two phases of the project allowed the organisation to continue to monitor the political landscape over the summer, as conversations between the EU and the UK progressed, allowing it to further assess and scope the digital initiatives identified. n

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BL Jersey

Brexit Review Panel set up

Population Office measures take hold

Jersey’s first Lean In Circle launched

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he latest statistics from the Population Office show that new measures to reduce the number of employment permissions for newer migrants have seen 283 permanent registered permissions revoked in the first half of the year. This compares with 47 such permissions revoked in the first six months of 2016. The figures also show that in the six months to the end of June, 161 seasonal permissions have been granted for recent migrants. The States claims this ‘reflects the government’s continued support for the traditional industries of hospitality and agriculture’. The sectors that hold the most registered permissions are hospitality, agriculture and fishing, and financial and legal. The new measures were announced in January as part of an initiative to focus migration on delivering the greatest social and economic value, and to allocate permissions more fairly across businesses. Assistant Chief Minister, Senator Paul Routier, commented: “The decision to remove permanent permissions from businesses that hold more than the average for their industry, while also granting retail, agriculture and hospitality industries more seasonal work permissions, is part of a wider population policy to enhance our migration controls. “Unemployment is at its lowest level for more than seven years, and this does make recruitment more difficult. However, islanders are concerned at the level of migration, which has been higher than we would like. This is a small island and our challenge is to balance sustainable migration that supports our economy with the need to protect our environment and deliver sufficient quality housing.” This year has seen a drop in the number of newly arrived people applying for registration cards. The number for the first six months of 2017 is 16 per cent down on the same time last year – from 1,902 to 1,595. These figures are for new registrations, and exclude Jersey-born people and resident under-18s registering for the first time. In Q2 of 2017, a total of 3,170 registration cards were issued to British nationals (1,345 of who were Jersey born). This was followed by Portuguese (678), Polish (415) and Romanian (196). A draft Population Policy is being finalised, which will continue to enhance migration controls. As well as the work already begun on removing permissions, increasing fees and investing in skills, the policy explores the selective use of work permits, criminal record checks for all new migrants, and photographs on new registration cards. The States Assembly is due to debate the policy in the autumn. n

september/october 2017 17

Interview

Words: Nick Kirby Pictures: Glen Perotte Tell us how you got to where you are now. I started work in 1982 as an investment banker in Denmark, which is where I’m from. From there, I moved to London in 1991 and worked in dealing rooms in the City. When I had my first child, in 1999, I stopped working and set up my own business working with hedge fund managers and institutional investors. I moved to Jersey in 2006 and as soon as I arrived, people started asking if I would sit on certain boards – especially hedge funds – and within a year, I had a portfolio of eight different boards. In the meantime, my own business was changing. As opposed to finding investors for hedge fund managers and helping institutions find appropriate managers, I became more involved with boards and governance in general. So I launched what’s now Global Governance Group – a governance consultancy – doing board reviews and various aspects of governance advice.

What does diversity mean to you? I think people have a very narrow view of it – that it’s all about women and ethnic minorities. I talk about diversity in a much broader context – it’s about gender, ethnicity, generational diversity, LGBT, neural diversity, skills like technology, and more. There are so many aspects of diversity that aren’t present on boards. The board’s composition is the heart of any board. It’s the most important thing, but it’s the one area that boards are most flippant about. The type of people on the board, their ways of doing things, their views, their background – these issues are at the core of the board. Yet all too often it seems that it’s a certain ‘type’ of person who sits on a board. Boards need a much broader input – different sets of eyes to look at the issue. The line I keep saying is ‘having enough eyes to see’ – and that means younger eyes, eyes from different social backgrounds, different countries, different sectors. How did you set up Board Apprentice and how does it work? Initially it was me thinking about how we could develop diverse board members who are board-ready but for some reason

18 september/october 2017

haven’t had access to board rooms; how we could open doors. I thought: ‘Why can’t boards offer a seat at the table for education – where someone serves for a year as an observer or apprentice?’. The first thing I did was look at the eight boards I was on myself and ask them if they would mind having someone observing what we do through the full accounting year, so they see everything that goes on within a year in a company – the accounts, the various cycles of the year and so forth. At the end of that time, they should have a very good picture of what it means to be a board member. Five of the boards said yes, and one of the groups allowed me to send a letter to all its directors of different investment trusts, out of which came another five boards. It’s grown very quickly from there. Did that take you by surprise? Yes! But it proved that there was a gap in the market for a really simple solution. I think the important thing is that when firms and boards said ‘no’, we got them to tell us why they didn’t want an apprentice and then we covered those reasons. The ones that hated it, those are the ones we want to talk to, so we can hear what their real problem is. Now, we’ve pretty much covered all the issues that any board can come up with as to why they wouldn’t want to take part. Why did you meet resistance? It was a variety of reasons. For instance, there may be one person on the board blocking it. In some cases, that was a woman, which I found very interesting. We didn’t expect that. When we dug deeper, one of the reasons that came up a couple of times was that

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▼

Was there something in particular that triggered the idea of Board Apprentice? When you’re a board member, people point at you all the time and say you’re not doing this and not doing that – but no one was helping to develop any tools to make things change, either in terms of tactical implementation of best practice governance or in diversity for boards. There’s often a lot of talk, but that doesn’t change anything – you need action. I was looking for the action that could make a difference in terms of diversity. So, I started looking for really simple solutions. And one such solution was to work together in multi-stakeholder cooperation, where the boards start taking responsibility for educating the board members that come after them. The problem is that most board members sit there for however long and don’t concern themselves with who comes next. This is wrong. When you’re on a board, you’re a leader of a company – you can’t just leave your seat and not concern yourself properly with who comes behind you, and the pool of people that you choose from.

Interview

The

interview Charlotte Valeur As Founder of Board Apprentice, Charlotte Valeur is helping to increase diversity on company boards. She talks to BL about why diversity is vital but often misunderstood, and why the Channel Islands face an imminent board crisis www.blglobal.co.uk

september/october 2017 19

Interview It’s interesting that you encourage generational diversity – are younger board members generally overlooked? Absolutely. Younger people add an enormous amount of value to boards. We have a 27-year-old apprentice on the Board Apprentice global board right now – a young man from KPMG – and he gives us amazing input. He just really understands how younger people work and live and what their expectations are, and how we can reach them. Older board members need to be much more accepting of the fact that experience alone doesn’t give you an edge in today’s world, that’s something younger directors can bring.

these people felt they might be helping potential competitors. To me, this shows a clear lack of leadership skills. It’s a duty to have succession planning. Many boards haven’t quite got it – they do executive succession planning, but not board succession planning. And to block development of new board members that you can use for your succession planning isn’t good leadership. What stage are you at now in terms of Board Apprentice? When it all took off, it was a bit like holding back a racehorse – it was quite extraordinary. We quickly set up the company, got a website in place and developed an operations manual. Board Apprentice basically works as a social franchise. We give the whole concept, along with the operations manuals, to someone who wants to run it, voluntarily, as a group of up to 20 boards. We currently operate in Jersey, Guernsey, Bermuda, Cayman, Switzerland, Denmark and the UK, and have around 50 apprentices on boards now – we’d like that number to grow. We have another 30 boards that are looking to take part – they just take their time deciding on it. It changes every week. Some of the boards were so impressed with the apprentices we put forward that they hired them straight away as board members. That’s not what we want to do – we’re not a recruitment company – we’re trying to broaden the pool. But what it showed us was there are a lot of people out there who are truly ready, they just don’t get access. What we do, it seems, is open the door. Do boards come to you with specific requirements – or ask you what would be the best fit? We give the host boards a questionnaire where they tick boxes as to what they would like to have. The boards can make specific requests, but most often they ask for a variety – and we then show them three or four different candidates. What was interesting was that in the first round, all the boards chose a white woman, but in the second round they went to the next ‘level’ – ethnic diversity – and the next it was LGBT or younger people. It’s as if having an apprentice on the board brings in a level of disruption to the boardroom – being different opens their minds and hearts to further differences, which is an unintended positive consequence that we hadn’t envisaged. It’s an often-cited problem that boards in the Channel Islands are mainly older white men. Do you find that’s the case? The small islands are interesting because each has its own problem. In Cayman, for example, there were issues with

20 september/october 2017

FACT FILE Name: Charlotte Valeur Age: 53 Position: Founder, Board Apprentice Children: Three Hobbies: Board Apprentice, painting, walking, reading Interesting fact: When I was 19, I set up and ran a Rottweiler club in Denmark, where we trained Rottweilers in the police programme. It grew to the point that we were training 100 Rottweilers annually.

Caymanians not reaching board level. It was the same in Bermuda. This was becoming a social issue. They have second and third generation, well-educated local people hitting a glass ceiling in the same way women have in the UK. In Guernsey, there’s a problem with the pool just being too small for the business they have – they need a bigger number, both men and women. In Jersey, we have a decent number, but not enough women to service the businesses we have. In 2020, when there’s a requirement for listed companies to have a minimum 33 per cent females, we’re going to struggle to fill those posts. That will be two to three women on more than 100 boards – we can’t fill that, so we have to bring in women from outside. What about the argument that some people have way too many directorships? Oh, that’s absolutely true. I know many people who have 25 or more and they can’t fulfil their responsibilities properly. In extreme cases, there are people with 200 roles, which is just ridiculous. The problem is that roles are being offered to the same people all the time. I get approached every week to be on another board. I have seven positions and that’s the maximum I’ll have. I’d be happy to take it down to five.

Do you think companies put too much effort into marketing and promoting themselves and too little into board composition? Totally. There are so many examples of how important it is to have the right board composition. You can make one decision that kills the company. Blockbuster is a great example. In 2007, they decided that streaming wasn’t worth investing in. Seriously? What set of eyes did they not have? If you look back at it, you think: ‘What the hell? How did they make that decision?’. It took only three years for the company to file for bankruptcy after that. If you get the CEO coming and asking the board for £20 million for an online trading system and the board is made up of the wrong composition of members, they may say no. They will make one wrong decision and it might kill a company that’s been around for years. So what does the next 24 months hold for Board Apprentice? There’s so much going on all the time. We’re in discussions with someone from North Australia to develop Aboriginal board members. We’ve opened some discussions with the Japanese government. We’re doing a cross-country SME group between a UK university and a Danish university. We’re talking to top business schools about collaborating with them. We’re talking to a large accountancy firm about launching in the US. In the next 24 months, all of that could happen. We’re also looking at launching a group in Ireland. Eighty per cent of our apprentices ultimately become board members, so we have a very good track record and we’re feeding off that to keep going. I hope we’ll have several hundred host boards, keep developing board members in the countries we’re in, and set up in new countries as a truly global structure. The sky’s the limit. n NICK KIRBY is Editor-in-Chief of BL magazine

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mourantozannes.com

A BL event

THIS YEAR, THE DEFINITIVE CHANNEL ISLAND FUNDS EVENT WILL COMPRISE: ● A PRE-CONFERENCE SEMINAR BY PREQIN – 9.30-10.30AM ● A SERIES OF PANELS AND PRESENTATIONS (SEE OPPOSITE) ● POST-CONFERENCE NETWORKING AND DRINKS THE PREQIN SEMINAR WILL ADDRESS THE GLOBAL PICTURE IN THE ALTERNATIVE ASSETS INDUSTRY, AND WHERE THE CHANNEL ISLANDS SIT IN THAT LANDSCAPE. THE FULL DELEGATE RATE INCLUDES THE SEMINAR AND CONFERENCE. TICKETS FOR THE SEMINAR ONLY CAN BE PURCHASED SEPARATELY FOR £40. In partnership with:

Sponsored by:

Supported by:

channel Islands funds forum

A SHARPER FOCUS THE MAIN CONFERENCE WILL RUN FROM 11AM-5.30PM. TOP-CALIBRE SPEAKERS WILL COVER A RANGE OF SUBJECTS, INCLUDING: ● WHAT THE PAST 12 MONTHS IN FUNDS HAVE LOOKED LIKE ● THE GLOBAL POLITICAL LANDSCAPE AND ITS IMPACT ON FUNDS ● THE VIEW FROM FUNDS PRACTITIONERS OUTSIDE THE ISLANDS ● THE CHANNEL ISLANDS’ RESPONSE TO THE OUTSIDE VIEW ● AN UPDATE ON THE LATEST TAX ISSUES ● WHERE THE MONEY IS FLOWING IN FUNDRAISING ● WHAT’S NEXT FOR FUNDS IN GUERNSEY AND JERSEY THE FULL LIST OF SPEAKERS CAN BE FOUND AT WWW.CIFUNDSFORUM.COM

WEDNESDAY 27 SEPTEMBER preqin seminar 9.30-10.30AM • main conference 11am-5.30PM The radisson blu waterfront hotel, st helier, jersey up to 6.5 Hours CPD available Delegate rate: £395 (+ 5% GST if applicable) Places can be booked by visiting www.cifundsforum.com or emailing events@blglobal.co.uk

Finance

omic n o c e d cal an he world, it i t i l o p D e s p i t e i n t y a r o u n d t a r k e t s h av e r u n c e r ta t h at s t o c k m n t h e p a s t y e a appears a rising tide i e n j oy e d

g n i o G

global

24 september/october 2017

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Finance

WITH BREXIT, THE Trump effect, and uncertainty pretty much

on a global scale, you’d think that stock markets would be in freefall, but they’re not. So, just why have markets risen in the past year when you’d expect them to have been flat or fallen? According to Mike Farley, Head of Zedra’s Fiduciary Investment Services department, low interest rates have been the biggest factor. “Central banks have maintained their accommodative stance on low interest rates, which makes a major recession unlikely and is good for both consumers and businesses,” he says. He also points out that low rates for savers have made equity investment more attractive, which has kept interest in the stock market especially keen. Michael Bull, Investment Manager at Quilter Cheviot, agrees that despite high levels of uncertainty across the globe, the economic climate hasn’t had a detrimental effect on equities. “The Trump effect, so far at least, hasn’t been damaging. His tax ideas were business-friendly – though he hasn’t been able to push things through as quickly as he thought. There are some good signs – Q1 earnings in the US were strong and supported stock valuations, and the S&P Index is still making record highs. It’s now grinding higher, but there are still signs of growth.” Robert Lea, Head of Global Equity Research at Ashburton, is inclined to agree that the Trump factor has had limited impact. “Trump’s presidency has been beset by multiple problems, but investors shouldn’t forget that the President’s core policies are pro-job creation and pro-growth. While we’re doubtful Trump

FEW AREAS OF WEAKNESS Broadly, the picture is positive, but have any global regions done better than others? The US, UK and Europe have all performed strongly, according to Bull. “Europe is recovering from a very low base, but there are signs it’s coming back on a sure basis, with improved earnings figures from European companies. Asia and emerging markets have also done well this year.” This point is supported by the fact that the Hong Kong’s Hang Seng Composite Index rose a remarkable 24.4 per cent in the year to 15 August. Indeed, equity markets have been stronger pretty much across the board.

Equities on the rise 500

8 June 2017 May elected UK Prime Minister

23 June 2016 UK votes to leave EU 8 November 2016 Trump elected US President

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7 May 2017 Macron elected French President

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The MSCI All Country World Index rose significantly in the 18 months to 15 August 2017, despite key political events in Europe and US

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september/october 2017 25

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Words: David Burrows

will succeed in getting many of his reforms through Congress, the prospect of superior US growth is still welcomed by the markets.” He also believes the market reacted positively to Trump’s more conciliatory stance towards China, following his earlier protectionist statements. As a result, the markets have been willing to overlook the US’s political uncertainty, choosing to focus on the positive outlook for economic growth and corporate profitability. Andrew Robins, Senior Private Banker at Nedbank Private Wealth, agrees that notwithstanding uncertainty around the UK election result, Brexit and Trump (which so far haven’t damaged equity markets), there have been positive events, especially in Europe. “The market got the results it wanted in both the Dutch general election and the French presidential election,” he explains. “Another supportive factor for a long time has been central bank policy, which continues to suppress interest rates across the curve. This has forced investors towards other asset classes, as the main alternatives [cash and bonds] are quite unattractive.” Certainly, market numbers are highly supportive of a bias towards equities. The MSCI All Country World Index was up 12.44 per cent for the year to 15 August 2017, the Dow Jones up 13.3 per cent in that period, and the FTSE 250 up 9.8 per cent.

Finance

What’s hot and what’s not There have been a few areas of weakness though. Investment grade bonds have struggled and energy and commodity stocks have underperformed in the year to date, due to the decline in oil price and general downturn in commodity pricing. Lea says the Russian stock index has fallen more than 10 per cent, due to concerns about the domestic oil-intensive economy, as well as general geopolitical concerns. In terms of volatility, through 2017 the VIX Index has hit a multi-year low. However, this should be read with a degree of caution. As Bull stresses: “It’s important not to lie back and just think all is fine. Currencies have acted as something of a release valve for the US, UK and Europe.” Given that Brexit hasn’t happened yet, and Trump has more than proved he’s the loosest of cannons, are we likely to see increased volatility going forward? Bull thinks not. “I don’t think we’ll see excessive volatility. Q1 earnings in the US and Europe were the strongest since 2013. More value is being pushed into these stock markets.” He adds that positive numbers need to come through over the following quarters, though, to show Q1 was no fluke. As for Brexit itself, the feeling is that it in no way spells disaster for the UK equity market. “I think currency is going to bear the brunt of Brexit,” says Bull. “And if you look at the huge number of foreign earners in the FTSE, that’s going to negate a lot of the ‘pound’ effect.”

HEADING FOR A FALL? Talk of the market being over-valued has led to speculation that we’re heading for a fall. Clearly, markets correct from time to time but, as the gold market has proved in recent years, hitting historic highs doesn’t necessarily mean you’ve reached a peak. Farley doesn’t believe stock markets are perilously over-valued. “I think we’re probably in the final stages of a bull market but it could run for some time yet. Typical signs of overheating aren’t present. There are no great inflation concerns currently, and company earnings in the US and Europe remain supportive.” US Q1 earnings in 2017 were up 15 per cent, and around 75 per cent of companies are ahead of analyst expectations. Cautious optimism is also Bull’s opinion on stock market opportunities. He thinks valuations are still reasonable, but investors need to be careful with individual stock and sector picks. He points to Carillion as an illustration. The construction support services business has seen its share price plummet following

26 september/october 2017

a profit warning early this year. Other companies, such as Mitie and Capita, have reported a slowdown in the awarding of contracts following the UK’s vote last June to leave the EU.

QUESTION OF TIMING If we’re close to the end but not at the peak of a bull run, should investors look to time the market? This idea gets short shrift from Zedra’s Farley. “Timing the market is impossible. The biggest influence is human behaviour and investors tend to look in the rear-view mirror – people buying at the top and selling towards the bottom, the kind of panic we saw in Q1 2009.” The market could rise another 10 per cent before falling, he says, but trying to anticipate the peak exactly isn’t the most sensible strategy. It’s also important to get the re-entry point right. Rather than jumping on a white-knuckle-ride with 100 per cent exposure to equities – possibly even in one high-flying sector – investors should look to diversify and lower their risk. In times of uncertainty, it’s better to be as diversified as possible. “You don’t want any overriding theme in a portfolio now. It makes sense to have a mix of equities, bonds, property, and also a broad sector spread – for instance, pharma, financials and so on,” Farley explains. So, what will be the key drivers in the months ahead and what economic indicators will the experts be watching? Lea says the question for investors during the second half will be the extent to which bond and equity markets can withstand the gradual withdrawal of monetary stimulus, given the US Federal Reserve’s plans to reduce its balance sheet and the potential reduction of quantitative easing by the European Central Bank. He adds: “Growing dissent within the Bank of England’s Monetary Policy Committee could also herald a rise in UK interest rates, though we think this less likely given the Brexit-related uncertainties overhanging the UK economy.” China will also be on the radar. “We continue to keep a close eye on developments in China, where we expect economic growth to slow during the second half,” Lea says. “Maintaining economic stability remains a central aim of the Chinese government, which we think has done a good job so far.” n

hot US equity valuations – These are stretched a little, but there are likely to be stock-picking opportunities given a positive US economic outlook and low unemployment. European earnings – An earnings pick-up in Europe means this market could provide good returns over the next year. Emerging markets – These have been the star performer year-to-date, underpinned by the improving global growth outlook, weakening US dollar and a solid rise in local corporate profitability. There may be further upside there.

NOT Domestically-focused UK companies – There’s caution around these given the significant uncertainties posed by the Brexit process. For UK exporters, the concerns are considerably less. Fixed income – A rising interest rate environment is potentially negative for fixed income and high-dividend-yielding stocks. Commodities – Commodities such as oil and gold have shown little sign of improvement in pricing.

DAVID BURROWS is a freelance financial writer This article was edited on 24 August 2017

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More achievements for

ZEDRA Building on a remarkably successful 2016 and a strong start to this year, ZEDRA has scooped more awards, moved to new offices and supported important Jersey charity work ZEDRA IS AN independent specialist in trust, corporate and fund services. The company now operates from 14 offices globally, with Jersey housing the largest team. Recent months have brought awards successes, new premises and successful partnerships for a business that’s growing in both size and reputation. In July this year, ZEDRA Jersey moved its 140-strong team to new offices in La Colomberie, St Helier. The move consolidates the firm’s two original offices into a larger, modern environment that will allow for further team expansion. The expansive offices, spread over four floors, have been well received by staff, providing a large, bright and comfortable work environment. Considerable thought has gone into looking after the wellbeing of the ZEDRA team, including facilities such as a parent/baby nursing room with views of the sea, and wet rooms to encourage walking or cycling to work. The move has also been enthusiastically received by other local businesses. The arrival of a major company such as ZEDRA is proving a boost to the eastof-town business economy. Ashley Cox, Managing Director of ZEDRA Jersey, says: “Our search for a new home began last year and we’re thrilled to be in our building and to have our team under one roof. It’s been a positive decision to move to the east of town, where there’s a thriving business community, and we’re pleased to be able to invest in an area of St Helier where we can make a difference.”

AWARD SUCCESS In May, ZEDRA reigned triumphant in London at the Citywealth Magic Circle Awards, taking home the top prize for ‘Independent Trust Company of the Year’. It was a night of double success, with

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of the hard work and commitment of every individual at ZEDRA.” ZEDRA has also been ranked as one of the top 12 trust companies by eprivateclient. Only 32 companies have been listed in the prestigious rankings. The tiers aren’t based on size; they depend on reputation, quality of service and performance over the past 12 months. Shaun Findlay, Managing Director, Les Amis, and Ashley Cox, Managing Director, ZEDRA Jersey

we’re pleased to be able to invest in an area of St Helier where we can make a difference

Elaine Graham, a Director in the Guernsey office, scooping the highly coveted ‘Woman of the Year’ award. Held at the Rosewood Hotel in Holborn, London, the evening attracted more than 300 guests from leading firms and practices across the UK and beyond. On winning the trust company award, Niels Nielsen, ZEDRA CEO, says: “It’s a wonderful achievement. To be shortlisted in such esteemed company as First Names, Equiom, JTC and Sanne is one thing, but to take home the top prize is an indication

IN THE COMMUNITY An art auction to celebrate ZEDRA’s office launch raised a fantastic £3,000 for Jersey charity Les Amis, which helps those with learning disabilities. Members of Les Amis created 11 locally inspired works of art using an array of mediums from oils to collage. ZEDRA also commissioned Les Amis to create a piece that now takes pride of place in the reception area of the new offices. Shaun Findlay, Managing Director, Les Amis, says: “Without the support of ZEDRA, our work would be so much harder. We’re so happy with the £3,000 raised to assist us in developing our new nursing and complex needs unit. Thank you ZEDRA.” All the artwork for the auction was produced at the new Les Amis Day Centre. ZEDRA has partnered with the charity for 2017 and has committed to supporting the Day Service financially as well as encouraging their own team to teach classes and assist in activities. n

CONTACT ZEDRA

To find out about career opportunities, view Director profiles or read the latest ZEDRA news, visit www.zedra.com You can also contact Director Julie Fairclough on +44 (0)1534 844247 or email julie.fairclough@zedra.com

september/october 2017 27

Finance

S ’ R E F F A BLU E TO: GUID

L A I C I BENEF P I H S R OWNE There’s plenty of debate as to whether there should be public registers of beneficial ownership – BL gets to grips with where the Channel Islands stand amid the noise

Finance

LAST YEAR, JUST a

couple of months before he departed Downing Street in the wake of the Brexit vote, the then UK Prime Minister, David Cameron, announced that the UK’s Crown Dependencies and Overseas Territories would provide the UK tax and legal authorities with access to company ownership information. To some, this was a huge step forward in transparency. Indeed, Cameron described the move as putting transparency in these jurisdictions “far in advance of most other countries”. But to others, including the charity Oxfam, it wasn’t enough – Cameron would “need to do better than this”. Cameron was promoting the fact that jurisdictions like the Channel Islands and the British Virgin Islands had agreed to collect and make available to UK authorities the beneficial ownership information of companies registered in those jurisdictions. But the problem for many campaigners was that this information wouldn’t be made public. If the former Prime Minister had hoped his announcement would be the end of the debate, he would be disappointed. The issue of access to beneficial ownership information is still very much alive and the subject of continued, heated discussion. Here, we explain why beneficial ownership is such a big deal, and where things stand right now.

SO, WHY THE INTEREST? The calls for greater financial transparency have been growing louder for many years, particularly from supranational groups like the G20 and EU, acting through mandated organisations such as the Financial Action Task Force. As George Pearmain, Lead Policy Adviser, Financial Crime to the Government of Jersey, explains: “The Financial Action Task Force – which is the global standard setter for the prevention of financial crime, with a mandate from the G20 – requires jurisdictions to have available adequate, accurate and current information on legal entities and legal arrangements. This information is designed to be exchanged with law enforcement and tax authorities for the prevention of financial crime. “Registers of beneficial ownership are a method of having this information available. The requirement to have a register of legal entities is also included in a European Directive, the 4th Anti-Money Laundering Directive [4MLD], which requires all EU member states to establish registers.” Behind these moves lies a desire to prevent financial

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crime, terrorism financing and tax evasion, all of which are difficult to prevent if the beneficial ownership of legal entities remains unknown. “Unless financial and professional services bodies know who they are really dealing with – the beneficial owner – their ability to assist in the worldwide fight against financial crime will be limited,” says Pearmain.

WHAT IS ‘BENEFICIAL OWNERSHIP’? Jersey has operated a publicly accessible register of company ownership for nearly 30 years. Anyone can use it to identify the legal owners of Jersey-registered companies – and these can be nominees or corporate entities, as well as people. But ‘legal owner’ is not the same as ‘beneficial owner’. As David Dorgan, Partner at Appleby, explains: “The law permits a split of legal and equitable (or beneficial) ownership. For example, the legal owners of shares in a company might legally own those shares for the benefit of other persons – the beneficial owners – who have specific rights. Therefore, beneficial ownership is about identifying the persons ultimately behind the legal ownership.” Those people, according to John Harris, Director General at the Jersey Financial Services Commission (JFSC), “are the real persons who own a company or similar structure”. “A company owning a company is not the beneficial owner. You have to go all the way back to the real people who actually benefit from the company,” he says. Whilst these examples focus on company ownership, the issue is much broader than that. The UK legislation, which springs from 4MLD, encompasses trusts and partnerships as well as companies.

ARE ALL JURISDICTIONS ON BOARD? When it comes to transparency, countering tax evasion, terrorist financing and money laundering, an international approach makes sense. Anything less than this means there will be holes in the system that enable assets to be bought and sold without anyone knowing who’s behind them. So, does this international approach exist? “There’s been pressure put on the Crown Dependencies and Overseas Territories to lead the way with the UK, but there’s no international consensus,” says Harris. “The UK feels strongly about it and European countries are on board, but the US and China aren’t.” These are the world’s two largest economies, so their absence from such regulation is going to have an effect. “Certain states in the US drive a coach and horses through what the EU is trying to achieve,” says

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Words: Kirsten Morel

september/october 2017 29

regardless of the structure under administration – whether that be a company, a trust or a partnership – even if that information isn’t yet required to be submitted to a formal register.”

ARE THESE REGISTERS TRULY FEASIBLE?

Christopher Scholefield, Partner at Jersey-based law firm Viberts. “If China and Hong Kong don’t [create registers of beneficial ownership] either, then there will be a huge regulatory imbalance.” The US is a long way from meeting such standards. As Jason Sharman, Professor of International Relations at the University of Cambridge, wrote in US magazine The Atlantic: ‘The United States, given its central place in the global financial system and the number of companies involved, is the worst in the world when it comes to regulating shell companies.’

DO THE CHANNEL ISLANDS HAVE THESE REGISTERS? “The JFSC currently already holds beneficial ownership information on new companies, and the duty to notify changes in beneficial ownership to the JFSC became law in April this year,” says Sean Cheong, Partner at Collas Crill. “The new beneficial ownership information law came into force in Guernsey on 15 August and Guernsey’s register will be maintained by the Registrar of Beneficial Ownership, a new office created by the legislation.” David Dorgan also points out that “the laws of Jersey and Guernsey require service providers to know their clients

One reason why public registers have been challenged is the increased risk of individuals being targeted for criminal purposes

“They are feasible. We’ve shown they can be done,” says John Harris. “We have a register of this information centrally held here at the JFSC for all owners of all companies.” While Harris’s point holds true for Jersey’s non-public register of beneficial ownership, Scholefield points out that it’s within the EU, of all places, that challenges are being made to the concept of public registers. “France had a court case in which it emerged that the obligation to make public the details of trust ownership was incompatible with human rights,” he explains. “Germany has also had issues with this, and the idea of a public register of company beneficial ownership has been ruled unconstitutional.” The answer, therefore, has become one of having a register that can be accessed by the authorities rather than the public, which is exactly the situation that Jersey and Guernsey have agreed to.

WHY THE REFUSAL TO GO PUBLIC? One reason why public registers have been challenged in court, and why those in the Channel Islands resist them, is the increased risk of individuals being targeted for criminal purposes, should the full extent of their interests become publicly known. “If registers are held publicly without adequate safeguards to protect potentially vulnerable individuals, or if data security is an issue with the exchange of privately held information, this does present a risk,” says George Pearmain. “The Society of Trust and Estate Practitioners has written about this at length. Due to the risk, it’s a focus area in the Financial Action Task Force and the Global Forum. The individual’s rights and risk of harm to them must be paramount in considering these issues.”

COULD REGISTERS DAMAGE BUSINESS IN THE CHANNEL ISLANDS? “Guernsey and Jersey have always adhered to the highest standards of compliance in their implementation of anti-money laundering and tax evasion prevention measures,” says Cheong. “Clients have a right to privacy, and the registers in Guernsey and Jersey protect those rights without compromising the islands’ reputations. There’s no reason to believe that the islands won’t continue to attract the right type of clients and business.” Jersey’s regulator believes the islands’ reputation for only dealing with high-quality businesses stands them in good stead. “There are two schools of thought,” says Harris. “One sees Jersey as a quality, well-regulated jurisdiction, which is something we know lots of companies want. The other sees secrecy as an issue for some businesses and Jersey’s approach doesn’t appeal to them. I think it’s an advantage to run a clean ship and strike an appropriate balance between privacy, responsibility and international cooperation.” n KIRSTEN MOREL is a freelance finance writer

30 september/october 2017

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Finance

Making sense of

tax risks

â&#x2013;ź

An inc mo reas â&#x20AC;&#x201C; s re co e in r o thr just mplic egul o u g h o w at e d at i o n ht he can t for d has ta x h e i r e m a com y na ctor de li pli viga s an fe f anc te a e m saf d NED r i n e e ly s fie ld?

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september/october 2017 31

Finance

As directors and NEDs bear ultimate responsibility for the tax compliance of the firms for whom they work, they could face severe sanctions

Words: Richard Willsher THE SAYING GOES that there are only two things in life you

can be sure of: death and taxes. In the current environment, you might want to add an addendum to this: tax risk is intensifying. Companies, funds, their directors and non-executive directors (NEDs) are facing increased responsibilities to comply and report to tax authorities. The penalties for non-compliance have stiffened significantly and the outlook is for closer scrutiny and greater reputational risk. This is all piling pressure on decision makers within businesses in the Channel Islands. On 1 September 2009, hot on the heels of the financial crisis, HMRC’s Liechtenstein Disclosure Facility (LDF) came into force. It was effectively an amnesty to encourage those who were evading tax in the UK by routing their affairs through the Alpine principality, to come clean and pay up. It was the first of several such disclosure facilities to be put in place by the UK tax authority. On 31 December 2015, these were all closed and replaced by the Worldwide Disclosure Facility (WDF), which until 30 September 2018, HMRC states, ‘will be the final chance to come forward before we use CRS data and toughen our approach to offshore non-compliance’. ‘CRS data’ refers to the Common Reporting Standard (CRS) for the automatic exchange of financial institutions’ client information, which was approved by the Organisation for Economic Co-operation and Development (OECD) in July 2014.

32 september/october 2017

This will further ratchet up the fight against tax evasion and follows on from the Foreign Account Tax Compliance Act (FATCA), the US legislation dating from 2010 that required foreign financial institutions to report on the accounts of American account holders, either through their own tax authorities or directly to the US Internal Revenue Service (IRS).

NAVIGATING THE MAZE The sum of these measures illustrates the scale of tax risk and disclosure responsibility that businesses and their directors now face. It’s labyrinthine and far from straightforward. “Tax risk has become more onerous. And it’s going to get even more onerous as other pieces of legislation take effect,” explains Harry Lawson, Senior Tax Consultant at Equiom Solutions. “As well as the WDF, the Requirement to Correct [RTC] puts an onus on businesses to ensure that their clients’ tax reporting is up to date, and also runs until 30 September 2018. It’s an opportunity to put their tax affairs in order and is aimed at the fiduciary industry with responsibility for trusts and others in the UK that are generating an income which has yet to be reported to HMRC.” The picture is one of ever-more-demanding tax compliance. “The trend over the past few years is for an increase in the tax and morality debate,” says Debbie Payne, Director at PwC in the Channel Islands. “There’s now a huge amount of law. You need to understand what the laws are, what your compliance risks are and what procedures you need to put in place to protect your business from those risks.” This means businesses need to have policies and procedures in place that reflect the requirements of the global kaleidoscope of tax legislation. This can affect any business, but is particularly true

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Finance

of those that manage clients’ money or hold accounts for them, such as banks, investment funds and private equity structures. And along with the increased regulation, the penalties for non-compliance are increasing. “Penalties for non-compliance post-RTC are quite draconian,” says Lawson, a former HMRC staffer. “100 per cent of the tax is a minimum. There may also be asset-based penalties of 10 per cent of the assets involved.” What’s more, as directors and NEDs bear ultimate responsibility for the tax compliance of the firms for whom they work, they could also face severe sanctions. “They could face fines, professional challenges, and the regulatory authorities could ban them from practicing,” says Moore Stephens Associate Director Hazel Johnson, who specialises in tax planning advice for high-networth individuals. “And then, if they’re involved in lawbreaking, they could face criminal prosecution.” Johnson goes on to explain what they should do to prepare themselves. “Directors and NEDs need to be fully aware of what tax compliance obligations they face and what internal systems are in place to monitor these, as well as Know Your Customer [KYC] requirements. They need to keep themselves up to date with changes that have gone on in the regulatory environment. “They need to stay in contact with people who are working with clients to ensure that they’re keeping up with clients’ needs in the regulatory environment and that they can keep up with reporting.” Johnson adds: “And they need to keep an eye on the professional bodies, such as trust administrators, so that they keep themselves up to date with latest best practice as well.”

WHO’D BE A NED? Changes in tax legislation have altered the role of directors and NEDs. There’s now clearly a requirement for a greater degree of professionalism in the field of tax. “You can outsource your compliance obligations and administrative tasks to a fund administrator; what you can’t outsource is your responsibility,” says Payne. “You can hedge yourself commercially, but if anything does go wrong it’s the directors that would be held responsible when it comes to enforcement proceedings.” But while some potential directors and NEDs are thinking twice about taking on such responsibilities and risks, there are now more people who see this job as a long-term career. “They take on a small number of appointments and expect to be paid properly for them,” Payne says. “We have groups of such people in the Channel Islands who now do this, and who

Tax authorities have adopted a more aggressive approach to tax gathering and this includes naming and shaming non-compliant businesses and individuals

have much more infrastructure and support around them. A different type of director is coming through, rather than those that perform such roles on an ad hoc basis. They look at it as a real business proposition.” Lawson stresses the importance of research before taking on a directorial role. “Directors and NEDs need to think carefully about the roles that they’re going into. While most will already do this anyway, they need to do their research very well before taking on the job. They need to look into the background of any fiduciary entity or other business. They need to know about what’s behind that entity, find out as much as they can about it. “What they need to do is undertake their own due diligence into the role they’re going to take. They might start by asking whether the entity is regulated or needs to be regulated. That would be my first port of call. The less information you can find out about an operation, the more worried you should be.”

REPUTATION, REPUTATION, REPUTATION Overarching the risks associated with tax compliance itself is reputational risk. Tax authorities have adopted a more aggressive, investigatory approach to tax gathering and this includes naming and shaming non-compliant businesses and individuals. Adverse publicity is now a tool in the armoury of the tax collectors, who increasingly gather their intelligence from each other to assist them in their enquiries. Weighing it all up, it seems pretty clear that there’s only likely to be one direction of travel – no wonder then that tax experts say the intensity of tax risk is going to worsen in the future. “The risks have been around for a number of years,” says Payne. “What we’re seeing is a greater willingness among tax authorities in different countries to ask questions and to take a tougher line in investigation and enforcement.” However, there’s another imponderable waiting in the wings. Lawson concludes by saying: “Beyond the next year or two, when we know what’s in the pipeline, the big unknown is Brexit. The islands’ interests with the EU are served by the UK, but they don’t know what their position will be when the UK leaves.” That may be a matter for another day, but Brexit looks likely to heap further tax complications and risk onto an increasingly complex maze of tax regulation and compliance. n RICHARD WILLSHER is a freelance finance writer

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september/october 2017 33

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The value of outsourcing regulatory reporting Firms in the Channel Islands are bringing their financial services expertise to bear on one of the industry’s real growth areas – regulatory and compliance services. Andrew Niles, Director at Intertrust, takes a look at a regulation-led business environment and explains how the islands are looking to capitalise on the opportunity presented by a more transparent financial ecosystem OVER THE PAST 10 years, the role

of the compliance officer has changed significantly within organisations worldwide. Once seen as enforcers responsible for ensuring that processes, pieces of work and systems adhered to national standards and internal rules, the compliance officer acted as the gatekeeper who controlled what went out of the door. The compliance officer in 2017 is more of a caretaker – they protect the business from bad practice and ensure that it’s populated with proactive, responsible practitioners so that their organisation isn’t subject to heavy sanctions and potentially fatal reputational damage. This role change has been precipitated by a huge global increase in reporting and the automatic exchange of information – it’s never been more important to be compliant. The EU’s General Data Protection Regulation (GDPR) is just the latest example of a multinational set of standards, and its scope is such that any business that has interaction with the EU will be covered by the regulation. GDPR is certainly the hot topic at the moment, but the first wave of international regulations – particularly know your customer (KYC) and antimoney laundering (AML) procedures – still need to be adhered to. These sit alongside the more high-profile information exchange agreements – the Foreign Account Tax Compliance Act (FATCA) and the OECD’s Common Reporting Standard (CRS). So, the landscape is a complex one that places a burden upon organisations, albeit

34 september/october 2017

a burden that’s ultimately necessary and beneficial. The reasons for complying with international regulations are obvious – compliance indicates a willingness to adhere to established rules, and demonstrates legitimacy and social responsibility. For Channel Island businesses, it debunks misconceptions about the legality of offshore structures. The islands were early adopters of FATCA, CRS and GDPR, so they’re the perfect jurisdictions to host outsourced regulatory reporting services. This is an increasingly viable option in the face of global regulatory demands.

WHY OUTSOURCE REGULATORY REPORTING? The most obvious reason to outsource complianceled tasks or processes is the same reason that a business would outsource any function – efficiency. The demands on compliance have accelerated at such a rate in recent years that it’s been hard for small and mid-size firms to keep

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up. Options for tackling the greater compliance needs for firms of this size are limited. They can expand their internal compliance team – which is often not an option for simple budgetary reasons – or employ external help to spread the work. The latter is proving increasingly popular as the regulatory burden grows. Outsourcing not only has the advantage of reducing the workload on a business’s own staff, but it also means that firms are able to benefit from external professional expertise. Large teams of experts are employed to perform the compliance function, and companies offering outsourced regulatory compliance services will also be fully accredited for each individual piece of regulation. At Intertrust, for example, we work globally with more than 50,000 entities and individuals on regulatory matters – including FATCA, CRS and GDPR. We also carry out AML checks on functions such as client on-boarding, due diligence on investors and remediating books of business, to ensure compliance with current standards. Our offering encompasses regulatory compliance services, which are scalable and applied to funds, corporate services and complex private wealth structures. Scalability is important because many of our clients are exactly the kind

of firms noted earlier – mid-tier firms for which developing an in-house team would be inefficient. The reality for these firms is that they simply need a provider that can perform global, scaled compliance functions for them. The global nature of regulation necessitates an international perspective and work ethic. We work with clients from around the world to meet their compliance needs. The international footprint of our client base is a further endorsement for the Channel Islands as a jurisdiction – we work out of the islands for clients from the Far East, the US and Europe on their fund-based businesses.

AT THE HEART OF COMPLIANCE The Channel Islands are the home of Intertrust’s regulatory compliance services. As a company that reports in up to 30 jurisdictions around the world, we’ve seen the need to streamline and bring efficiencies to compliance services, workflows and processes that have been developed right here in the islands. Many of our clients are comfortable with outsourcing the administrative processes of their compliance work to us because they know that we operate from robust jurisdictions that represent the gold standard in global reporting. Our streamlined services have been rolled out to Intertrust’s hubs around the world to ensure consistency and quality. International businesses demand the highest accreditations and we have those – hence our desire to share that expertise and knowledge and offer a global solution to what’s often a global requirement. The islands’ reputations for robust regulation, combined with a broader ‘open-for-business’ attitude, a convenient geographical location and time zone, and a mature financial services sector, make them strong jurisdictions in which to do business.

EASING THE BURDEN VIA TECHNOLOGY The financial services world is an increasingly modernised one and digital technologies have played a part in facilitating reporting and complying with regulation – making life easier for the client and for the service provider. At Intertrust, we have two systems, developed in-house, that we and our clients can use to expedite the reporting process. The first is a secure, easy-to-use cloudbased client on-boarding system that’s used in the Channel Islands and in Intertrust’s offices around the world, as well as by select clients. The second system is an app called CDDQuick, which enables us to perform due diligence on a client more quickly and easily than ever before. Both the Guernsey and Jersey Financial Services Commissions now allow the provision of electronic data. We wanted to take advantage of this and pass the convenience factor onto our clients, so we developed our very own app. CDDQuick is installed on a portable device and simply scans documents such as passports, utility bills and driving licences and then interacts automatically with our systems to provide that information immediately. This saves time for us, the client and the regulator and is the kind of system that we see playing a big part in the future of compliance. Compliance is more important now than ever and its reach extends to touch upon many of the trends that characterise the global business landscape. The sector has embraced its increased significance and devised new innovations to ease the regulatory burden – cybersecurity is an ongoing concern that has shaped regulation and the ways we report. The whole industry requires consistency and integrity to demonstrate legitimacy and adherence to international standards. All of this can be a burden on organisations, but outsourcing is a viable option and the Channel Islands are the perfect place to find regulatory caretakers who are trained, accredited and experienced. n

REGULATORY REPORTING AND INTERTRUST

To find out more about regulatory reporting, get in touch with Andrew Niles on +44 (0)1481 211321 or email andrew.niles@intertrustgroup.com Intertrust in Guernsey is regulated by the Guernsey Financial Services Commission.

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september/october 2017 35

Finance

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savills.je 36 september/october 2017

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Finance

As the compliance burden on financial firms keeps on rising, it seems that businesses and their clients are both having to shoulder the increased costs

who pays the cost of regulation?

Words: Dave Waller

broke back in April 2016, it sparked a very clear chain of events – first came the headlines, then the public outcry, and then politicians scrambling to be seen to be doing something about it. All this filtered down into a couple of tangible results – greater regulation of the financial services sector and, for those individuals working in compliance, an even busier in-tray. Not that they weren’t used to it by now. Ian Murphy had become Head of Compliance and Risk at Volaw Group in October 2015 and, even pre-Panama, his workload was all too apparent. “My first job was to produce a paper and go to the board and say: ‘Right, this is what the regulation means, and here’s what we need to do.’ And the reaction was: ‘Wow, there’s a lot to do’.” Indeed. Murphy had arrived as financial services were still getting to grips with a wave of new directives: the Foreign

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september/october 2017 37

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WHEN NEWS OF the Panama Papers

Finance

Account Tax Compliance Act (FATCA) in the US; the Alternative Investment Funds Managers Directive (AIFMD) in Europe; and the Common Reporting Standard (CRS) and Base Erosion and Profit Shifting (BEPS) initiative on a more global scale. And let’s not forget MiFID II, which comes into play in January 2018. It’s as if the regulators are set on dishing out woeful Scrabble hands. But if the jumble of letters can be befuddling, it spells one thing clearly for companies looking to compete in an increasingly dog-eat-dog wealth market – vastly increased costs. New regulations mean additional reporting. Clients need to be told what has to be done and why. Processes and procedures have to be amended, staff trained to ensure they’re collecting the right data, systems adjusted to cope with the additional information required, records kept… And this isn’t just the initial structuring. Many of these costs are ongoing. “It’s taking more time from directors and senior managers, to make sure everything’s being complied with,” says Craig Cordle, a Partner at law firm Ogier. “And it’s not a one-off. There are service providers who need to do this on a day-to-day basis.” Cordle says the biggest regulatory shift in the past five years was AIFMD, which required a fundamental overhaul of how service providers looked at their organisation’s work and the advice they gave. It even changed the way they structured their funds. CRS brings a similarly onerous burden, requiring the automatic exchange of information on a vast range of financial transactions right across each firm’s client base, from trusts to bank accounts. Firms had to adjust their systems to capture it, and to a high spec. Murphy reckons it’s not unusual for compliance and risk regulation to add 10-12 per cent to a firm’s overall expenses. Twenty years ago, it would have been around five per cent.

TECHNOLOGY LEADS THE WAY While some firms may opt to outsource the compliance function in order to minimise costs, others will handle all compliance in house. Outsourcing itself isn’t without issues – Channel Islands firms can’t risk someone sitting in another jurisdiction letting standards slip. But the choice generally comes down to whichever is the most cost-effective solution. A more viable option may lie in technology and the birth of ‘regtech’ – tools that enable companies

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to instantly capture, verify and transmit information such as recurring client details and identities, instead of having to dig out these records manually every time. “One of our clients found that the cost of administering the FATCA process was £70 per transaction,” says Chris Clark, Founder and CEO of Jersey-based tech provider Prosperity 24.7. “They were charging their client £50. So, while their client had to pay £50 for the honour of filling out a 14-page mandate to answer all the questions, our client was losing £20 per transaction. If they had 10,000 clients, that’d be a lot of money.” Clark’s solution was to build an online portal offering those end-clients secure access to upload their own information to a system that could process in seconds what would have taken people several weeks, and at a far lower cost. It’s a shift that was, apparently, very welcome. “Companies do seem to come to us in a fairly stressed fashion to start with,” says Clark. “When they’re sending 14-page mandates, cross-checking everything coming back, it’s mad. It’s about creating a symbiotic relationship between your data team and your compliance team. They can use the data that the compliance team collects for the regulation to give them that 360º view of their business, and using it intelligently to derive insights on changes in client behaviours. We’ve seen it in three clients – going from regulation being a burden to making it profitable.”

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Ultimately, however, for any company looking to remain in business, some cost has to be passed to the end user. “In the real world, and in any area of the market, firms will always try to pass the cost on to the client,” says John Harris, Director General of the Jersey Financial Services Commission. “For high-net-worth individuals and private trust management structures, where there’s a high level of service at high cost, that’s feasible. For retail clients, if there are enough of them, it’s reasonable. But for others it might be a problem, and they’ll look to reduce their profit margins and pass some cost on to the client.”

CHARGING CLIENTS

It’s not unusual for compliance and risk regulation to add 10-12 per cent to a firm’s overall expenses. Twenty years ago, it would have been around five per cent It’s early days, and tech solutions are still really only an option for larger firms. Smaller companies will need people to handle their processes, and probably won’t have a large and experienced compliance team in-house. It’s not surprising, then, that many smaller companies have been absorbed by larger rivals because they can’t afford to keep up with the changes.

THE ROAD AHEAD Clark isn’t the only one to point out that regulation can be an opportunity – and it may as well be, given that companies have no choice in going along with it. Murphy says it’s given Volaw the opportunity to “look at our systems and training and record keeping”.

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Murphy says Volaw charges clients an annual flat fee to cover the admin time spent reporting them to the requisite systems, but that’s a relatively small proportion of the real cost to his firm. “What we’re not doing is adding on the £2,000 per client in extra training costs that the regulation has brought,” he says. But while clients stew at extra costs, and compliance professionals at the extra work, it has at least had a positive effect on the value of their experience. Someone who went into compliance 10 years ago may well find themselves in high demand now. “If you’re in compliance and experienced, there are a lot of opportunities in the Channel Islands and beyond,” says Cordle. “Compliance people will always be regarded internally as cost centres – they don’t make money for a business. But salaries have probably gone up, and if anything they’re more defensible now.” Murphy describes understanding FATCA as a “little bit of a black art”. But he says there’s learning to be made along the way, and highlights five lessons. “Make sure your data is up to date, and that your systems are current and capable,” he says. “Recruit the best. Ensure you have good regulatory frameworks and procedures, so you don’t have to rip it up each time a new regulation slots in. And plan for the future – you’re going to get more of it, so don’t be surprised when it comes along.” Indeed, the regulatory burden isn’t about to get any lighter. “No one can see a natural logical end to this,” says Harris. “The industry bears the costs, and ends up saying it can’t take much more of it. But the world moves very fast, the clamour for change is quick, and no one has a wand to stop it.” n DAVE WALLER is a freelance business writer

september/october 2017 39

Finance

The serious business of

Guernsey

pensions Kerrie Le Tissier, Senior Associate at Collas Crill, talks us through the changes to pension regulation in Guernsey, how they came about and what they mean for the island YOU DON’T NEED to be a finance expert

to appreciate why an individual should put in place a pension or savings plan to provide for their retirement. Most people are aware that any available state or public pension by itself is unlikely to provide sufficient income to allow someone to have the lifestyle they want once they stop work. While many employers offer their staff membership of an occupational pension scheme, most individuals will be dependent on the savings they make during their working life once they retire. It’s therefore essential that individuals and employers alike, wherever they may be based, have access to pension and retirement schemes that are both fit for purpose and a safe place to put their savings. Most pension and retirement arrangements involve a ‘pension pot’ that will be looked after and invested by someone other than the employer or employee. That other person (the trustee or administrator) is responsible for protecting

40 september/october 2017

the retirement savings and increasing the value of the ‘pot’, so that there’s enough value at the end of the employee’s working life to provide them with a reasonable standard of living. Pensions are a serious business – this is a huge responsibility and carries with it considerable risk, so it’s important that those looking after our pensions know what they’re doing. It‘s also essential that there’s public trust and confidence in any private pension system. A properly regulated and managed system should encourage the use of private pensions by employers and individuals alike to make savings for retirement, as the savings will be well protected. Until the end of June 2017, Guernsey didn’t have any legislation or regulations designed specifically for pensions, other than rules for certain retirement annuity trust schemes. That said, acting as a professional trustee or administrator of a pension scheme was already regulated under existing legislation that regulates

fiduciaries generally. The law relating to Guernsey pensions was limited to the relevant provisions of the local income tax legislation, which deals with the approval or recognition of certain schemes for Guernsey income tax purposes. However, the existing statutory provisions did not – and were never intended to – deal with matters such as the conduct of business of pension providers, or their relationship with members and beneficiaries, or the administration of pension schemes themselves.

PENSION REGULATION Guernsey introduced a new supervisory and regulatory framework for pension and gratuity schemes – a type of retirement scheme that provides for a lump sum payment – on 30 June 2017. The new regime covers all types of private pension and gratuity schemes set up and run in Guernsey, including occupational schemes (set up by an employer) and personal

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These measures mean that both pension providers – those that look after and invest pension funds – and pension schemes must now adhere to strict regulations about how business is carried out and how schemes are run; breach of which carries severe penalties. The new rules apply to all holders of a full fiduciary licence in Guernsey and to all pension schemes – occupational and personal, domestic and international – administered by such licensees, unless specifically agreed otherwise by the GFSC. Whilst the rules don’t apply to ‘lay’ persons providing services to pension schemes – namely those that aren’t licensed and don’t need to be licensed – it’s expected that they too will consider adhering to some aspects of the rules as best practice.

pension providers and pension schemes must now adhere to strict regulations about how business is carried out and how schemes are run

WHO BENEFITS FROM THE NEW RULES? schemes (set up by an individual for their own benefit), whether domestic or international. Earlier in the year, the States of Guernsey gave in-principle approval for the introduction of a new pension law in Guernsey. Such a significant piece of legislation will take time to prepare. It’s a highly technical area – research will no doubt be carried out on the pensions legislation of other jurisdictions (what works and what doesn’t), and the needs of a number of interested parties will have to be taken into account, from the man on the street to employers, and from the pension industry to government. So it’s unlikely to be in force for another couple of years. However, whilst the new legislation is being drafted, interim measures have been introduced. Forming, managing or administering a pension or gratuity scheme in Guernsey is now regulated by the Guernsey Financial Services Commission (GFSC), and pension and gratuity schemes themselves are regulated. In addition, rules and regulations designed for the pensions industry have been introduced. The Pensions Licensees (Conduct of Business) & Domestic and International Pension Scheme Rules 2017 came into force on 30 June.

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Much has been made of the benefit to the Guernsey pension industry and Guernsey plc in introducing this regime. It’s certainly true that the new regulations will be good for business. The reasons cited for introducing the regime include meeting recognised best international practice and expectations, improving Guernsey’s competitive position, protecting and enhancing Guernsey’s reputation as an international finance centre (IFC), and enabling pension schemes to take advantage of exemptions from the Common Reporting Standard (CRS) – which provides for the automatic exchange of information between participating jurisdictions. On the international front, the expectation is that Guernsey can now market a well-regulated product overseas, which will be of interest to international organisations and internationally mobile individuals wanting to supplement any local state or public pension. International schemes based in an IFC such as Guernsey are a cost-effective solution to making provision for the retirement of employees where one might not otherwise exist – for example, because no suitable product exists in the home jurisdiction of the employer or because its employees live and work in different places. Having these types of pensions regulated in a reputable jurisdiction such as Guernsey will make them more attractive overseas

in places where there’s an expectation that pensions are properly regulated. The rules will also benefit individuals – members of pension schemes, whether set up by their employer or by them personally, will be better protected as their pension providers and pensions themselves will be subject to strict regulation. The interests of members are central to the new rules that deal with matters such as the information about the scheme that must be provided to members (both when a scheme is set up and during its lifetime); the fees and charges that may be paid out of their pension pot; and members’ involvement in investment decisions. Individuals can take great comfort from the fact that if the people who are looking after their pension breach their obligations under the regulations, the consequences will be severe. In reality, pension business in Guernsey was already well regulated indirectly and the risks to consumers were low. Nonetheless, it’s hoped that the new regime will encourage employers and individuals (locally and internationally) to pay more attention to their pension arrangements, to use the Guernsey pension system to set up new schemes where none exist, and to increase retirement savings. n

september/october 2017 41

Technology

Four technology experts gathered together to discuss the state of play for technology in Jersey and Guernsey. Sam Bryans, CEO at PlainSail Technologies; Aonghus Fraser, Group Chief Technology Officer at C5 Alliance; Ricky Magalhaes, Managed Security Services Director at Logicalis Jersey; and Tony Moretta, CEO at Digital Jersey, give their view on tech in the finance industry and beyond

The future of tech in the Channel Islands IT’S BEEN SAID that finance businesses in the islands aren’t making the best use of technology. Would you agree? And if so, how could they use tech more smartly? Aonghus Fraser: Hardly any companies are making best use of technology. The term ‘digital transformation’ isn’t going anywhere anytime soon, as most companies are, or should be, on a journey to improving their businesses by leveraging technology. There’s a running joke coined by the Head of Transformation at one of our clients, where they are “undergoing a transformation programme to bring them

up to 1990”. It’s tongue in cheek, of course, but that organisation at least realises how far they have to go. Ricky Magalhaes: I’d agree. There’s so much good and useful technology available that can automate and refine processes, and it’s just being ignored and underutilised. What’s more, these technologies can reduce cost and complexity – and the Channel Islands are in a great position to leverage these to enhance and provide us with an advantage. I would say that the best use of technology would be to automate, reduce cost and

transform what we do in a modern and efficient way. Tony Moretta: As with all industries and locations, I think some companies are making good use of technology and some aren’t. I’ve seen great examples of financial services companies using technology well, including the banks who see it as key to their future transformation and continuing efficiency. However, we need to recognise that some companies still use relatively inefficient and staff-intensive processes, where technology is the answer to both reducing their costs to stay competitive,

42 september/october 2017 www.blglobal.co.uk

Technology

if you’re missing out on opportunities or are becoming uncompetitive because your legacy products are inefficient, not scalable, or prevent you from adapting, you need a plan Sam Bryans

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Are the companies that make the best use of tech going to be the ones that survive and/or thrive? RM: Thrive for sure, as it gives them an edge by reducing the cost and this will be passed onto the customer. TM: We’re in a more competitive global marketplace than ever, and customers will always seek out quality of service and the best price – so all industries including finance have to remain competitive, and technology can be the answer, but not the only one. I not only want to see larger companies make better use of tech, but for them also to support the growing number of fintech startups in Jersey. SB: You’d think companies using tech would do well, but adopting the wrong technology, or mismanaging the right technology, can also lead to business failure. It’s important not to be taken in by the latest buzzwords and trendy concepts. If you have legacy technology that still works for your business, why change it? However, if you’re missing out on opportunities or becoming uncompetitive because your legacy products are inefficient, not scalable, or prevent you from adapting, you need a plan. Should every company have someone in-house who’s responsible for the use of tech – a Chief Information and Technology Officer, for example? TM: Yes – absolutely – but there also needs to be a growing understanding of at least the potential of technology to improve the business across all the executive teams and boards. RM: I’d agree. Without focus, we’re lost. It’s important to know what’s out there and how to use it. It’s like internal technology marketing. You’ll notice companies that embrace technology are normally the ones that adapt quickly and are successful. SB: I’d say it depends on the size of the company. IT and the internet are central to everything everybody does these days, so the expertise must come from

We need to recognise that some companies still use relatively inefficient and staffintensive processes, where technology is the answer to both reducing their costs to stay competitive, whilst also improving their services Tony Moretta

somewhere. At the same time, IT consultants have the reputation of being expensive, thus scaring off the very small businesses. For those companies, public bodies such as Digital Jersey are essential for providing free advice and education. AF: Sam’s right. Not all companies will be of a scale to require a specific individual as a full-time position, but the role is definitely required. I strongly believe that, at a minimum, a non-exec director with the requisite experience is essential, or there should be a regular strategy review with a trusted individual or partner who can provide strategic guidance. There’s been a lot of noise about the General Data Protection Regulation (GDPR) recently – is this justified? SB: Definitely. Now that almost every aspect of our lives has moved online – both

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whilst also improving their services. Sam Bryans: The finance industry consists of many companies, small and large. Larger ones can often afford large IT budgets, in-house technicians and developers, or they can outsource. So, it’s easier for them to become more efficient and connected using the latest tools and platforms. Smaller companies often don’t have the same in-house expertise or budget and depend on third parties for advice and bespoke software. So, they’re more conservative, wary of risk and cautious with budgets. Many cutting-edge enterprise offerings are out of their reach. It’s the small-tomedium enterprises that need help and advice, and software they can afford.

Technology

voluntarily and involuntarily via government decree and commercial necessity – it’s essential that private citizens have control over what happens to the information that they provide. AF: I’d say yes and no. The headline scaremongering about the potential risk of crippling fines have been misused in nearly every presentation I’ve been to. Yes, the fines are big, and organisations need to sit up and take note. But those are the maximum fines that are only likely to be applied in a ‘gross negligence’ type of scenario. If you’ve been following best practice with regards to data protection already, there may be some tweaks to be made, but I don’t believe the Channel Islands Data Protection Commission will be attempting to cultivate a new revenue stream with big fines. The emphasis should be on education and meeting the equivalent regulations. If you’ve not been doing anything at all, then it’s not too late, but time is running out fast to ensure that you have a viable plan and understand the implications on your people, processes and infrastructure. TM: I think the noise has largely been to make people aware of the urgency to be ready by the date it will be introduced, but it’s important that companies get the best advice on the implications for them in good time. RM: I’m with Gus, in that I think it’s somewhat justified. At the moment, it’s noise, but it’s real regulation with real teeth that will bite, so it’s not something that should be ignored. However, there are many companies scaring customers into buying something. This reduces the industry’s credibility and is damaging. It’s better to educate, and for the right reasons. On your point, Ricky, it does appear every service provider is offering a solution. Is this overkill and just a way of making a fast buck? RM: I’d say so. Very few companies can offer a solution in this space and are just chasing a fast buck for sure. It takes a strong pedigree and experience, and some creativity to get the people, process and required technology implemented. Most providers are just jumping on the

bandwagon and have no idea about data protection – they’re going to hurt themselves and the vulnerable customers that listen to them. AF: In terms of GDPR, there are a small number of certified practitioners in the Channel Islands. C5 has invested in ensuring we have one, my co-Director in Guernsey, Matt Thornton. We’ll continue to keep on top of the regulations and use our qualifications and experience to help our clients on the journey to being compliant with GDPR. I’m aware that a lot of providers might see this as the new FATCA – regulatory requirements that need a solution – in this instance, however, there isn’t a one-size-fits-all approach; technology is only part of the jigsaw. For jurisdictions that are acutely aware of reputational damage, is cyber security the biggest issue keeping tech people awake? AF: Cybersecurity hits the headlines

Cyber is just one of the things that people are focused on right now. the reality is there are a stack of things – migration to cloud, agility and flexibility – that are just as important Ricky Magalhaes

regularly and is a threat to be taken seriously. Due to the potential impact on businesses, it may well be the biggest thing keeping some tech people awake. However, it’s far from the only thing. Data leakage, for example, whether accidental or malicious, would cause far greater reputational damage than a cyber attack on a well-prepared organisation that recovers quickly. RM: I’d agree with that. Cyber is one of the issues, but relating the risk to the threat vector and truly understanding the threat is key. Cyber is just one of the things that people are focused on right now. The reality is there are a stack of things – migration to cloud, agility and flexibility – that are just as important as cyber security. Cyber should be woven into the fabric of IT but shouldn’t be the only thing on the agenda as too much focus on this will detract from other important elements. TM: Personally, I think if it’s keeping you awake then you’re probably not doing enough to protect your technology and assets! However, this is an ongoing problem and not a one-off issue. Data, and the security of it, is only going to become a bigger issue for all of us. Much time, effort and money is being poured into technology – but are the Channel Islands developing the right skill sets for the future? RM: Not yet, but we’re getting there. I believe that the islands should invest in training data scientists, artificial intelligence experts, robotics engineers and makers, automation experts with some cyber capability intertwined. A focus on renewable technology – solar, wind, wave, tidal and other renewable energy tech – together with healthcare tech and Internet of Things [IoT] are also a future. We seem to be solely focused on fintech and traditional development with a bit of cyber, but there’s hope. Green shoots are showing, with some great initiatives that Digital Jersey has been promoting. C5, Logicalis, JT and some of the other tech companies have done a lot to move this forward, but more can be done in areas such as IoT and healthcare. Innovation is investing in our future.

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Technology

TM: I think we have a better idea of what we need now, and an Education Department that understands the challenge and is working hard to address it. But it takes time to develop these new skills so, in the meantime, we’ll have to keep bringing in external resources that have the expertise we need. I’m glad that the States of Jersey is supportive of issuing licences to the best off-island candidates to help us improve our skills base. SB: I think Digital Jersey is doing a great job with its code schools and mentoring. All the schools on the island are playing their part too. The main problem the islands have is recruiting and keeping talent. Highly skilled IT specialists are obviously in great demand all over the world and the variety of work is limited in a small island – we don’t have a large gaming industry or high-level scientific research. Specialists in those areas and others will obviously have to work abroad. AF: I’m afraid that, in my opinion, we’re absolutely not developing the right skill sets. We don’t have a great story for school leavers. At C5, we’ve taken on a range of young, enthusiastic recruits from school to graduate level and this has been extremely successful. However, as an island, there aren’t enough education options after school that are relevant to the increasing global technology demands. It’s also essential for learning to be aligned with industry trends rather than pure academia in order for our future workforce to be better prepared. I’m excited to support the Beaulieu Institute of Technology in whatever way I can – more of this type of approach, where there’s a blend of education and practical learning, will help those wanting a career in technology to develop relevant skills without having to go off island (and not come back). Whilst the attitude for a generation of school leavers unsure of their career options may have been “I’ll just get a job in finance”, I would love this to be “I’d love to get a job in technology”. Fostering entrepreneurship and awareness of technology roles (not just coders) in schools will help attract more people to a growing and very exciting industry.

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The City of London is calling for a digital skills visa – given the clampdown on immigration, should the islands be doing the same? AF: Yes! TM: Earlier this year, Digital Jersey worked successfully with the Community & Constitutional Affairs Department to amend our immigration policy for non-EEA workers to include technical skills for the first time in the criteria for the issuance of visas. We’re continuing to work with the Population Office to improve the process for issuing licences for digitally skilled off-island workers to take up roles here and are already seeing excellent results. SB: Jersey’s population is already large, so it’s a difficult problem to solve. It would be better to train and recruit locally, if possible. Also, we live in an age where remote working is becoming the norm for IT. Nearly all of the large IT companies allow remote working, and some very successful companies only have remote workers. People don’t need to physically relocate to the islands to work here. RM: I believe that the islands should fund people to come here and stay here and create new industries. If we don’t aggressively do this, we will suffer in the future. We’re living in a highly competitive space, and finance has a short life left, so we need to pivot and adapt. Finally, what in your view is the biggest opportunity in technology in the Channel Islands? RM: We’re a small, focused market, with the capability to reinvent ourselves. I think robotics, automation and analytics is something we could learn and offer to others globally as a service. The cyber wave is mid-swing, so almost past us. The future is in healthcare, blockchain, robotics, automation and things that are smart, like IoT. If we engaged vendors such as Tesla and attracted them to invest in this closed ecosystem, and we became the ‘smarts’, we could achieve a lot. SB: I’d say modern trust and corporate services administration software [presents the big opportunities] – a great example of

In my opinion, we’re absolutely not developing the right skill sets in the islands… there aren’t enough education options after school that are relevant to the increasing global technology demands Aonghus Fraser

this, and admittedly a shameful plug, is PlainSail Wealth. That said, it’s difficult to predict – there are lots of opportunities in the Channel Islands and people with good ideas. Businesses need to take more risks and encourage entrepreneurialism. AF: Top of my list would be artificial intelligence, machine learning and automation, leading to better security, customer experience, service and efficiency. TM: I don’t think anyone can predict one area of success. Although emulating a focus on a few specialisms in finance, Digital Jersey is specifically focusing on digital health, fintech and IoT. But regtech – the use of technology to improve our regulatory processes – should be a key focus for the whole industry. n

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Business

Life as a digital nomad Ever fancied working from a hammock in Thailand or a beach hut in Indonesia? Then pack a bag and grab your passport, because itâ&#x20AC;&#x2122;s easier than ever

46 september/october 2017

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Business

Words: Ben Jordan

on in our professional careers. Do we invest time in building a secure financial future with a stable nine-to-five, saving up for a deposit for a starter home and opening a pension plan? Or do we throw caution to the wind and travel the world to build character and broaden our horizons? Because let’s face it, #YOLO. To a digital nomad, this dilemma is no longer binary. There’s a growing host of mostly Western, skilled workers who are trading in the nine-to-five for a job that can be done anywhere in the world, as long as there’s a fast enough internet connection. Born out of the rise of the sharing economy and cloud-based connectivity, the scene is ripe and just getting started. Those with an entrepreneurial spirit and a thirst for adventure can work remotely, anywhere from the Medina of Marrakesh to a bamboo hut in Koh Samui. ‘Location independent’ and ‘digital nomad’ are trending terms for this untethered lifestyle, evoking a certain image of hipster travel blogging in Instagram-friendly surrounds. The secret is ‘geo-arbitrage’, a concept popularised by Tim Ferriss in his best-selling book The 4-Hour Work Week. This involves taking advantage of low-cost lifestyles in developing countries while commanding a first-world salary. Freelance designers, content writers and developers from America to India, Romania to Japan work remotely from hubs around the world. A site called Nomad List presents the myriad possibilities, ranking every world city by cost of living, internet speed and overall quality of life. This global directory provides forums for digital nomads to gain travel advice on visas and healthcare options and to link up with each other when they touch down. Top ranked hubs include Chiang Mai in Thailand and Ubud in Indonesia, known for their infrastructure, affordability and thriving co-working spaces. Popular shared spaces, such as Hubud in Indonesia or KoHub in Thailand, offer the full package – a private bedroom, three meals a day and your own workspace with fast internet access. They even throw in free scuba diving or surf lessons for your downtime, organise socials and provide free meeting facilities.

STATE OF INDEPENDENCE Nomads are a diverse community – some work on tech projects or start-ups, or use popular platforms such as Upwork to bid for remote assignments. Others monetise their travels by blogging about their adventures and even make a living through advising other nomads on how it’s done.

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The 2015/16 Digital Nomad Survey reflects the breadth of professions that can be taken on the road. The two most common were developers (26 per cent) and content writers (17 per cent). Marketers and designers accounted for 13 per cent each. There are also artists, photographers, translators and engineers. It’s a hot new scene – 46 per cent of those surveyed had only been location-independent for 12 months or less. The survey also showed that the majority of nomads were single, with just 32 per cent travelling with a partner or family. Bucking the trend, popular blogger Nomadic Mick navigates the world with his family in tow. A seasoned 36-year-old traveller, Mick’s blog is a top resource for nomads on bootstrap budgets, and proves you don’t have to be single and under-30 to enjoy the nomadic lifestyle. ‘Travelling with my young boy definitely has its challenges but he loves it in general. He has now been to 25 countries and he’s just turned four years old!’ he writes. Being location-independent doesn’t necessarily mean city hopping every week. The Digital Nomad Survey showed that 64 per cent had chosen a primary location for six months or more the previous year. As 30-year-old Australian Project Manager Kit Teguh points out: “It’s important to have some grounding and stability in order to stay focused. I’ve based myself in Phnom Penh for the past year, where I’ve made friends and know the lie of the land – the best co-work spaces, cafes and bars – and rented a decent apartment. I love travel, but constantly moving from city to city and living out of a bag just isn’t practical for me. I’d never get anything done!” Living in a developing country with fewer outgoings allows digital nomads to be more competitive. “It’s an open market, with bidding wars on sites like Upwork and Fiver, where freelancers try to undercut each other on rates,” says Teguh. “Here in Asia, I can live on $25 a day or less, so I have an edge there. I do think cheap is cheap though – talent wins out in the end, and when it comes to high-level projects, there’s still no substitute for experience.”

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WE HAVE TO make an important decision early

Business

A recent Upwork survey found that 92 per cent of digital nomads felt happier and more productive when freed from the shackles of the physical workplace. Some 59 per cent had actually seen an increase in income and a startling 79 per cent claimed they would freelance forever.

REMOTE OPTIONS Perhaps that’s why many companies are adding remote working options as they realise the benefits of opening their talent pool globally and increasing productivity from happier employees. Millennials have shown they value experiences over things, and companies have been forced to adapt to retain the top talent. Dutch entrepreneur Tom Sam launched his startup NoBu.gs on Kickstarter this year – an insectrepellent clothing brand that targets the outdoor travel market in developing countries that are at risk of malaria and dengue fever. With an initial fundraising goal of $5,000, NoBu.gs exceeded all expectations, raising an impressive $100,000 via crowdfunding. Based in Siem Reap, Cambodia, Sam believes location matters. “When you’re grinding out a new company, you’re able to reduce outgoings a lot, which gives you a much longer runway. If I’d started a company from San Francisco, we’d have needed millions to get started. “I strongly believe that a business needs to have a healthy balance sheet right from the beginning.” As a digital entrepreneur, Sam hires nomads for his content marketing. He offers this advice for employers: “The only way you should hire a nomad is to pay them on performance. For things such as social media management, this is easy to quantify. In the end, for a company it doesn’t matter if it takes someone two hours or five minutes to do the job, as long as the result is there. Some digital nomads are great but there are a lot of slackers out there as well, so make sure you have the right guy for the job.” We may not all choose to live a nomadic lifestyle, as glamorous as it sounds, and many professions will always require a fixed location, but we can look at current trends and guess where the digital and creative industries are headed. Faster, cheaper air travel, ever speedier internet, less home and material ownership, fewer marriages. It all creates a foundation for a worldwide location-independent workforce – an office that knows no bounds. So drop in, turn on and grind out – the world is your office. #DigitalNomad. n

Photographs kindly supplied by James Abbott, Founder, KoHub

Millennials have shown they value experiences over things, and companies have had to adapt

Life’s a Beach At the risk of provoking jealousy in the reader, I’m writing this from the blissful idyll of Koh Rong, a remote island off the south coast of Cambodia. These past four months, I’ve been travelling solo across South-East Asia, managing to subsidise my travels through freelance writing. It took time to build momentum, and I needed a kitty of two months’ savings to get started, but I now have a portfolio of clients that give me enough hours to sustain my nomadic lifestyle. My clients are mainly UK-based and, despite the six-hour time difference, this works seamlessly. I find new assignments through Upwork, and I use LinkedIn to reach out to prospective clients. I’ve learned to make myself marketable by enhancing my skills in SEO writing and social media and perfecting the art of the pitch. I’ve had to run myself like a business and stay disciplined when travel buddies coax me out for beers on a Tuesday night. I’ve been struck by the thriving community of digital nomads I’ve met across Asia. I would have been lost without this support network, freely dispensing advice on the cheapest apartments, visa top-ups, healthcare and co-working spaces. So far, it’s been quite a ride. But just to caution anyone considering a working life on the road, it’s not all massages and mojitos. There are times when clients are chasing copy as you battle through tropical storms and power cuts, when internet speeds are glacially slow, when the simplest request for an iced coffee in a cafe (if it even sells coffee) is met with the blankest of stares … Essentially, I’m a hobo with a laptop, but it has its rewards. I enjoy a level of freedom I’ve never had, and greater spending power. With a relatively cheap cost of living, I can afford to rent a decent apartment, eat out every day and live an affluent lifestyle for as little as £200 per week. Working remotely in Asia gives me the luxury to choose what I work on. As a single young professional, this suits me very nicely. Life is an ever-changing horizon, a dizzying carousel of new people, places and experiences. There may come a time when I hanker for the creature comforts of home (possibly during monsoon season!) but for now I’m King of the Road. And available for hire, by the way. Another hard day at work for Ben Jordan

BEN JORDAN is a digital nomad, currently based in Cambodia

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XRM Architects revolutionises regulation

XRM Architects, which provides custom business applications using dynamics 365 to companies in the Channel Islands and beyond, has broken new ground with beneficial ownership software, and is set for more regulatory reporting solutions IN MARCH 2017, XRM Architects became the first firm in Jersey to develop beneficial ownership software. The product it created was developed to help companies achieve their new beneficial ownership obligations, as outlined by the Jersey Financial Services Commission (JFSC). Simon Jackson, CEO and Founder of XRM Architects, developed an interface that could integrate straight to the JFSC whilst providing high levels of data protection and client security. The company is now taking this groundbreaking solution to the next level so it can support many different regulatory reporting application programming interfaces (APIs), and even portals where APIs have not yet been launched.

CRS, ultimate beneficial ownership and future JFSC APIs. This innovative solution will support multiple data sources and systems, and provide centralised logging to monitor clients’ experiences and any issues instantly. When a business’s regulatory reported data is modified, change notifications can be sent by the system with a clear and simple audit trail of what’s changed and when. Seeing what and when has been submitted to regulatory bodies has never been easier. The platform also has the ability to prevent automated reporting from being sent in case of user error. But that’s not all – creativity never

REGULATORY REPORTING PLATFORM

CONTACT XRM ARCHITECTS

This new financial services platform is being developed by XRM Architects to provide a common set of processes to assist regulatory reporting. The platform will enable firms to automate reporting of changes, where regulation requires updates within a defined period. It will also offer one solution for all regulatory reporting needs and support jurisdictional variations and different reporting APIs and portals, including – but not exclusive to – FATCA,

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sleeps at XRM Architects. The firm’s highly skilled analysts and software developers are always inventing new ways to optimise, streamline and assist a broad spectrum of clients.

FUTURE DEVELOPMENTS The team is currently developing a resilient and scalable solution using microservices in .NetCore, as well as containers utilising a message queue. They believe this software will become a solution for financial reporting on a global scale. They’re keen to meet clients who would like to be involved from the early stages and help provide input on the design. n

You can use digital intelligence to reimagine what’s possible for your business. XRM Architects uses Microsoft’s cloud-based enterprise system Dynamics 365 to unify capabilities into applications that work seamlessly together across sales, customer services, operations, financials, marketing and project service automation. The easiest solution is to start with what you need and then add applications as your business grows. If you need to better engage with your customers, empower employees to be more profitable, optimise operations or reinvent products and business models, then contact XRM Architects in Jersey today. For further information or a free consultation, you can visit the firm’s website at www.xrmarchitects.com. Alternatively, contact Director Simon Jackson on +44 (0)1534 505010 or email simon.jackson@xrmarchitects.com

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Cybersecurity: the hype just got real

Marc Lainé, Managing Director at C5 Alliance in Guernsey, explains why firms need to get to grips with cybersecurity if they are to avoid disaster – and how that starts at board level CYBERSECURITY USED TO be a very hot topic – experts and the media constantly warned us of the risks, issuing proclamations that a cybersecurity apocalypse would soon be upon us. But despite this, the reality was that online security incidents were minor and fairly infrequent – or so it seemed. Many businesses (understandably) began to ignore what seemed like hype, and de-prioritised the development of their cybersecurity strategy – as long as the common sense checks and balances were in place, other matters were more pressing. Cybercomplacency was the mood of the moment – until now. Over the past two years – indeed, during recent months – things have progressed rapidly. Cybersecurity breaches have always been more common than people believed – after all, an organisation doesn’t exactly want to broadcast that they’ve had a data breach. But it’s now become a major issue for nearly every business – that is, if they themselves know about it. As security audits take up more and more of our time, we conservatively estimate that no more than 30 organisations in Guernsey alone, for example, would even know they’d been hacked. Or if they did know, they’d have no idea what information had been seen or used. Hackers don’t necessarily leave traces – they might just look at the essential data

50 september/october 2017

they need and use it for insider trading. And if you don’t have a tool that tells you they’ve been there, you would basically never know. All of this might sound a little dramatic, but that’s because it is. Recently, a very large company with offices in more than 38 countries was significantly compromised, not just by ransomware holding the data hostage for a fee, but by a virus that effectively wiped all of its client records, entirely. And those backups they thought they had? Well, they hadn’t been tested for restoration, so they weren’t any good. This is a huge wake-up call for us all.

TOP PRIORITY The introduction of the General Data Protection Regulation (GDPR) may seem like just another administrative burden, but it’s the call to action we all need to prioritise cybersecurity. It’s not just that there will be fines for breaches; it will (I hope) drive a culture where data security becomes a priority. The level of complacency we currently see in large and small organisations alike can be shocking, and it’s a culture that often comes from the top down. Without casting too many aspersions, age gaps at board level have now become an issue. The average age of a board member is 50+ and, while people in this age bracket may well be IT literate, the radical

shifts in cybersecurity are very new, and not something businesses are accustomed to prioritising as a board matter. Some of the most basic questions people should be asking themselves include: 1. Do you have a cybersecurity strategy? Obvious perhaps, but alarmingly the answer to this question is often ‘no’. 2. Do you have a clear incident process and response team? 3. Yes, you have back-ups – but have you ever done a restore? 4. How will you know if you get hacked – do you have the right tools? 5. Are your databases configured properly? Anti-virus programs and firewalls mean nothing if they haven’t been configured. 6. Are you also thinking about data leakage, not just hacking – for example, can you tell if a former employee leaves with a client list? 7. Do you have basic security practices in place – such as cc being used instead of bcc in bulk emails? 8. If someone came into your office with a USB stick or network port, what could they obtain by simply plugging it into a machine? 9. Does your incident response team or crisis management team have the authority to make large-scale operational decisions? 10. Do you have appropriate insurance? Standard policies don’t usually cover the loss of data.

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There are lessons for Channel Islands businesses to learn and learn fast. Cybercrime pays, and as long as it does, businesses will continue to be at risk. Add in the growing sophistication of tools available to cyber criminals, not to mention the vast resources of nation states that dabble in cybercrime, and we should expect much worse in the future. There’s a heavy reliance on IT ‘experts’ to tell businesses what to do rather than the business knowing what should be done or what needs protecting. Business leaders and boards of directors must upskill quickly. They need to be able to understand what the experts are telling them and interpret those lessons effectively to ensure systems are more robust and able to continually reduce risks of attack. They should be actively involved in this process – and that requires skills that boards and business leaders, on the whole, do not yet possess.

THE RIGHT ADVICE The role of advisers may also be a factor. Advisers should be qualified – which doesn’t always happen in the Channel Islands – and they should have taken and passed industry-recognised exams at a high level and in specific cybersecurity areas. It could be argued that the lack of expertise at board level is the greatest risk to cybersecurity. People generally don’t like to admit what they don’t know, but if

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they did, they’d be in a better position to seek help and learn. Simply relying on the experts to fix the problem won’t, on its own, future-proof the business or guard it against cyber-attack. It’s time to look at board makeup and competencies. In my view, there needs to be at least one non-executive that not only asks the right security questions but also understands, interprets the responses, elaborates and interacts with those responsible for technology and security. Without these skills at this level, we’ll continue to see boards making bad decisions based on ignorance. Yes, good advisers are important, but boards need to understand what they’re being told. An understanding of technology has long been missing on boards – we’re at the stage where such deficits should be seen as bad corporate governance. The internet is a dodgy neighbourhood. But businesses are connected to this neighbourhood – and unless they’re well protected, their valuables will be compromised. The latest attack, dubbed ‘NotPetya’, takes advantage of similar weaknesses that were exploited by the recent ‘Wannacry’ attack. However, it’s also looking for weaknesses in already patched system configurations, seeking areas where best practice hasn’t been followed by the IT department and suppliers.

This is a double-whammy. Many IT departments are proud that their estates are up to date, but scratch the surface and you often find that best practice hasn’t been followed across all elements of the configuration. This is a critical issue for boards. The fact that at the Russian nuclear site Chernobyl, the radiation sensors are down and workers are leaning out of windows to take manual samples says it all. Complacency rules even in critical environments. Boards need to take the Financial Conduct Authority’s recommended approach and deal with cybersecurity proactively, intervening before an attack happens and before it’s too late. There’s every probability that a Panama Paperstype incident could happen in Guernsey or Jersey in the near future. Cybersecurity dangers may have been sensationalised in the past, but there’s nothing exaggerated about the risks facing businesses today. Put simply, the early hype just got real. n

SPEAK TO C5 ABOUT CYBERSECURITY

If you would like to discuss your business’s cybersecurity needs, please email marc.laine@c5alliance.com

september/october 2017 51

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A stylishly presented mews house with a beautiful private garden. Matching people and property across 29 London offices.

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Business

While stress in the workplace is quite widely discussed, its counterpart, anxiety, is perhaps less well understood – but it’s evident that needs to change

Is anxiety the

last taboo? Words: Jack Flanagan

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his most stressful days with surprising fondness. “The thing is, it felt good. It was like a coffee high,” he says. “And if you were stressed, people felt you were working hard. It was like a badge of honour.” Yet Lainé now stresses (pun intended), within his own business and at conferences, that chronic stress can be dangerous later on. In the beginning, it can be a good thing. Our body is experiencing a natural release of energy and hormones, which hypes us up for the task ahead. This gives us that ‘coffee high’ sensation. It helps us work faster and more precisely, so we can meet tight deadlines, for example, or do a tough presentation. If we’re stressed for long periods, however, it can lead to chronic anxiety – or generalised anxiety disorder (GAD) as it’s more properly known. The result

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MARC LAINÉ, THE Managing Director of C5 Alliance in Guernsey, remembers

Business

Everyone experiences stress and anxiety at one time or another. The difference between them is that stress is a response to a threat in a situation. Anxiety is a reaction to the stress Anxiety and Depression Association of America

is that our nervous system, which was previously helping by giving us that ‘second wind’, begins to fire constantly – a ‘fight or flight’ response that never gets resolved. Each new piece of work added to the in-pile, or a single criticism, causes your body to react as if in a crisis. When you’re anxious in this sense, your entire body is running at full capacity, as much as if you were in a fist fight or fleeing a dangerous animal. Unsurprisingly, this negatively affects productivity in the longer term, which partly drives Lainé’s advocacy. And he’s not alone – those who see his way of thinking are increasing in number. Nicky Jenkins, Director of Mindful Guernsey, which provides mindfulness and meditation workshops for businesses, says a major shift has taken place in the perception of the good her company can do for its corporate clients. “In 2012, when we started the company, we found not very many businesses wanted us. However, in the last two years, that has changed considerably. Corporations now get in contact to run workshops on mindfulness and breathing. These techniques aren’t as taboo as they once were,” she says. Despite these advances, the problem of employee anxiety is still widespread. Even though awareness of mental illness is high in society, this hasn’t yet formalised into programmes to foster more healthoriented attitudes at work. Fewer working hours, for example, like those recently adopted in Sweden, aren’t discussed in the English-speaking world. Yet studies show the problem of anxiety is serious. In Guernsey alone, 44 per cent of people report having at one time struggled with mental health problems, according to a survey conducted by the CIPD in May. This is higher than it was in England (31 per cent).

CAUSE AND EFFECT Anxiety and stress, far from being signs of productivity, adversely affect employee output. More than half of those who have mental health problems, including those stress-induced, say they’ve taken time off work. Managers also suffer. A 2016 Harvard Business Review study found managers tend to be more risk-averse the more anxious they are. The lack of a movement to help prevent anxiety in the office is perhaps in part because the damage it does isn’t more widely known. Instigating a shift in the attitude towards anxiety will help kickstart such a movement. And it helps to understand how we got to where we are now. Lainé, who earned his senior management stripes in the 1980s, says films like Wall Street (1987) presented a new, aggressive and cocksure model for ambitious men. Although the essence of the ‘Greed is Good’ philosophy, as represented in that film, is that the profit motive makes capitalism work, it inflamed dormant puritanical instincts, which prize hard work and materialism. Meanwhile, it undervalued the strain that work puts on our minds and bodies. Businesses will have to move away from this attitude if they’re interested in long-term productivity (or humanitarianism).

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Business

That’s perhaps the long-term goal. In the short term, there are a number of things businesses can do to help their employees prevent anxiety, or deal with it when it arises. Julie Dryburgh believes that our need to express ourselves is underserved in today’s workaday world. She runs a business under her own name, which provides a holistic approach to healing the effects of stress. Expressiveness, she maintains, can be key to recovering from stresses such as workplace grievances, which can lead to health problems later on. “It’s important as part of my practice to just listen – whatever they want to talk about, we talk about,” she says. As such, Dryburgh says managers must make it clear to employees how they should address interpersonal problems in the office, and who they can report to. Recognising the signs of anxiety can also help stem more serious illness down the line. Employees who take more time off work, act short tempered or make out-of-character errors may be at risk. Marc Lainé says that, from his own experience, employees will become less social and more pessimistic. Furthermore, employees who consistently work late are at risk, and employers should advise them accordingly. “I don’t tell anyone to ‘go home’. Usually they will have a good reason to need to work late. But I’ll tell them to come in later the next day, and help offset the stress they accrued that night,” Lainé says.

CORPORATE SHIFT Companies may also hire firms like Dryburgh’s to provide employees with foundational skills to cope with their own anxiety. Dryburgh’s company, for example, employs a holistic approach to wellness: from being given a platform simply to express yourself, to what you eat and how to satisfactorily resolve interpersonal issues. Others, such as Jenkins’ Mindful Guernsey, tailor programmes specifically to mesh with the aims of businesses. Importantly, it should be appreciated that stress can only be limited, not avoidable, says Jenkins. Her clientele, who include overworked bosses, often ask for her to ‘treat’ their anxiety as soon as possible – but it doesn’t work that way. “People like to think that we ‘tackle’ these sorts of things, or that we ‘sort them out’,” says Jenkins. “People think they need to fight anxiety with breathing sessions and meditation. Well, they can’t. It’s much more important to develop a real sense of what wellbeing is and to practise that.” Lainé concurs: “There will always be stress. Corporate law, for example, isn’t a walk in the park. It’s important, however, to be able to counterbalance the stress, with physical activity, for instance.” Finally, a boss who’s open about their own struggles can often encourage others to face up to their problems. “I think having a boss that’s had similar issues de-stigmatises and normalises it, so it’s not so embarrassing,” Lainé says. Joanne Lowes, a Senior Human Resources Officer at

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Getting help with anxiety Five ways employers can help employees with anxiety: ● Know the signs of anxiety ● Invest in well-reviewed wellness workshops and make their purpose plain to employees ● Provide simple and practical advice to employees on managing themselves at work ● Make it clear where employees can go to report concerns, either work-related or personal ● Remember that both senior as well as junior employees can suffer from burnout Five steps employees should take if they’re feeling anxious: ● Look at lifestyle first – what do you eat and drink, how much exercise do you get? ● Counterbalance stressors with strategies to help you de-stress – for example, holidays or sports ● Acknowledge your personal limits ● Voice concerns and express yourself through appropriate channels ● Chill out – learn to relax and stop your mind from whirring

Mourant Ozannes, cites stigma as a major factor that stops people addressing their anxiety problems. “Part of the effect of stigma is that people tend to bottle things up in the hope that no one will notice,” she says. “Or they’ll ignore the emotional signs that something’s wrong because they’re worried what will happen if they admit it to themselves and others”. Having a senior person set the tone on the business’s approach to anxiety can make a world of difference. Business leaders should ensure that a clear and practical approach is in place to tackle anxiety in the workplace – both for their own good and that of their employees. The cost in time and money may be great, but greater still is the cost that comes from having chronically tired, frantically overworked staff. In that way, businesses can ensure that they have a happier, more productive workforce – without the social cost of 1980s-style greed. n JACK FLANAGAN is a freelance business writer

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Business

Be smart about IP 56 september/october 2017

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Business

Words: Chris Menon

if you’re convinced you’ve just invented the next big thing, you’d best make sure you protect your intellectual property

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Olsen, explains: “Most people have heard of trademarks, which protect your brand and act as a badge of origin – much like the cattle brand, which is where the word comes from; copyright, which regulates who can copy artistic and literary works; and patents, which protect inventions. There are also design rights, plant breeder rights and indicators of geographical origin. “And new IP rights are still being created, as Guernsey did with the world’s first registered image right, which is aimed at stopping unfair exploitation of a person’s image, characteristics or likeness.” Some IP rights arise automatically – such as copyright – as soon as a distinctive idea finds creative expression. Other rights must be registered in order to provide protection. According to Duerden, “These include registered designs – which provide protection for 2D and 3D designs – trademarks and patents.”

TOO LITTLE TOO LATE Generally, larger companies are more adept at protecting their IP, whereas smaller firms tend to view it as a cost without any reward, only realising its importance when there’s a problem. “It’s very often too late by then, and you can quickly find that your invention is no longer eligible for patent protection, someone else has registered your brand name as a trademark or domain name, or you’ve inadvertently been infringing someone else’s IP,” explains Duerden. “In these cases, the costs in lost sales and putting things right can dwarf the cost of doing proper due diligence and protecting your IP from the outset. “Of course, the other side of IP protection is that IP rights are assets that can be used to generate income. By proper management and, where necessary, registration of its IP rights, a business can sell or license them to others.” Seeing Machines, for instance, has successfully licensed its eye-tracking technology to global behemoths Caterpillar and General Motors. It relies on trade secret and patent protection for its technology innovations. As its Chief Technology Officer, Timothy Edwards, explains: “We decide on a case-by-case basis

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THE INCREASING PACE of technological advances means intellectual property (IP) – the ownership of creative output rather than physical objects – is a key battleground for competitors across many different industries. And protecting it requires planning, because in the event of infringement, litigation can take years and be very costly. Apple and Samsung have been slugging it out for six years over alleged infringements of patents and trademarks (see panel overleaf). Meanwhile, in an unrelated lawsuit that began in 2014, accusing Facebook and Oculus of copyright infringement, ZeniMax Media recently won a US$500 million legal judgment against Oculus, though the latter has asked for a new trial. Disputes over intellectual property aren’t a recent phenomenon – the concept of protecting novel designs goes back to the ancient Greeks. While in Ireland in the sixth century, Saint Columba copied a psalter he’d borrowed from Saint Finian, sparking an argument over copyright that precipitated the Battle of Cúl Dreimhne (Battle of the Book) in which 3,000 folk died. IP, at its broadest, encompasses inventions, designs, artistic works, logos, names, computer programs and databases. As Sandra Duerden, a Senior Associate and intellectual property law specialist at law firm Mourant Ozannes, explains: “More or less any idea that can be represented physically is potentially capable of some form of protection.” Thus, we’re surrounded by IP, from the toothpaste we use to brush our teeth and the bottled water we drink, to the websites we visit and the branded clothes we wear. Some obscure and unexpected things can also fall under IP protection. Matthew Hives, a Director at One Stop IP, points out that the song ‘Happy Birthday to You’ is protected by an artist copyright – and in the US, ‘Santa Claus’ and ‘Merry Christmas’ are both covered by trademarks. However, as Duerden stresses: “An idea itself can’t be protected. Instead, a combination of the different forms of IP rights may be used to protect different aspects of your idea or concept. What IP law protects is the identifiable expression of your idea.” There are a range of IP rights, as Elaine Grey, a Partner at Carey

Business

which innovations to place into the patent system and which to hold confidentially. In terms of competition, we would assert our patent rights when appropriate to mitigate against unlicensed or undesired use by third parties. “We’re extremely careful about sharing unpatented confidential information,” adds Edwards, “and do so only under strict nondisclosure agreement [NDA] conditions, whereas we’re unlikely to ever disclose trade secret innovation, even under NDA.”

iP rights are assets that can be used to generate income. By proper management, a business can sell or license them to others

CHOOSE YOUR BATTLES WISELY There’s often a very thin line between innovative independent development and IP infringement, which is why court cases encompass everything from smartphones to songs. Yet, as Matthew Hives points out: “Over 90 per cent of IP disputes are resolved long before they go to litigation, and the advice is always try and resolve the dispute without resorting to the law.” In the event of litigation, Elaine Grey advises: “The relevant legislation lays down your remedies, which can range from damages, delivery of infringing items, or an account of the profits made because of the infringement.” Exactly which it will be depends on the circumstances of each case. Moreover, legal advice is essential because if you don’t have a right and threaten someone else wrongfully, that in itself could give rise to a claim against you. The generally complicated nature of IP law is another reason to employ expert counsel. For example, according to Duerden, if you’ve invented something but failed to patent it and someone who knows it’s your invention applies for a patent, there are avenues by which you can oppose the grant of a patent. In contrast, she warns: “If you’ve invented something and someone else, entirely independently of your invention, has the same idea and applies for a patent first, there’s not a lot you can do. Guernsey law permits you to continue using the invention in the way in which you were using it before but, short of selling the business, you can’t license or sell the rights to that invention to anyone else. In any event, it’s vital to document everything, so you can prove what you invented and when.” So how possible is it to protect the IP of very similar companies, such as ride-sharing apps Uber and Lyft? Duerden explains: “Each company owns its software and can protect that. They also each

APPLE The long-running IP war between Apple and Samsung is perhaps the best modern example of how litigious and costly a dispute over intellectual property can be – it’s estimated to have cost each side many tens of millions in lawyers’ fees alone. It began with Apple taking Samsung to court in 2011, alleging that it had infringed designs from its iPhone and iPad devices. Samsung counter-sued and, at its peak, these lawsuits were taking place in over 50 countries. The litigation has been settled or resolved by the courts in most of these locations; the battle is now primarily confined to the US. Samsung partly succeeded in the UK, and Apple was ordered to publish a notice on its website stating that

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own the trademark in their respective brand, and there’s no similarity between those brands. If Uber started advertising under any of Lyft’s trademarks, Lyft could bring a claim to try to stop that. However, the idea of using a mobile phone app to order taxis is not, at least in the UK and Guernsey, capable of protection.” Given the ever-increasing importance of innovation to many successful businesses, and the increasingly litigious society in which we live, it makes sense for every company to examine how best to protect and exploit its IP. n CHRIS MENON is a freelance business writer

SAMSUNG Samsung’s design for its Galaxy Tab device did not copy the iPad. The dispute in the US concerned utility patents and design patents (the latter being broadly analogous to design right), and Apple was initially the successful party. Sandra Duerden, Senior Associate at Mourant Ozannes, explains: “The initial US judgment against Samsung [in 2012] was for US$1.05bn, but they’ve spent the past five years chipping away at various elements in successive appeals. Even if Samsung overturns the entire judgment, its legal costs are likely to be in the tens of millions, on top of countless hours of employee time, significant disruption to their business, and negative publicity.” Apple doesn’t appear to have gained

much from the costly litigation either – it hasn’t managed to get Samsung’s key products banned in major markets, nor has it collected a penny of damages from the high-profile first US trial. As to whether it would have been better for them to have reached an agreement in 2011, Duerden says: “You might ask this about any litigation. But both parties were convinced they were in the right, and neither was prepared to make concessions which might have had huge commercial ramifications. Ultimately, the IP rights in question are enormously valuable, and each party has demonstrated to the other, and to the market at large, that they are prepared to devote substantial resources to defending those rights.”

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Business

Think you’re open-minded and don’t discriminate against other people? well maybe you should Think again…

Words: Dr Liz Alexander

WHAT IS THERE left to say about the business benefits of diversity? After all, as research sponsors Bloomberg, Deutsche Bank and EY point out in a report by the Center for Talent Innovation, a diverse workforce ‘drives serial innovation’. This in turn helps increase market share and expansion into new markets. In other words, diversity contributes to the Holy Grail of business growth. Less well understood are the reasons why diversity initiatives fail. Yet an article in the Harvard Business Review, entitled ‘Why subtle bias is so often worse than blatant discrimination’, offers a clue. Because while society actively legislates against blatant prejudices, our unconscious biases continue to act like marsh gas – both imperceptible and pernicious.

And don’t think you’re immune. According to Tiffany Jana, co-author of Overcoming Bias: Building Authentic Relationships Across Differences, “We’re wired for bias. Our brains are inherently lazy. We don’t want to spend the energy to do the hard thinking, so if we can take a short cut – in the form of stereotyping – we will.” This helps to explain why so many people automatically judge the overweight as lazy, or believe that folks with a Scouse, Brummie or Geordie accent are less well educated. Or even, when hearing that someone’s a Muslim, equate that with ‘terrorist’. Until they’re acknowledged and actively guarded against, such unconscious assumptions will continue to have real consequences in the workplace, and have

biased

How

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Are you

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Business

Blink: The Power of Thinking Without Thinking: ‘In the US, about 14.5 per cent of all men are six feet or over. Among CEOs of Fortune 500 companies, that number is 58 per cent.’ Then there’s research conducted by University of Texas economics professor Dr Daniel Hamermesh, author of Beauty Pays: Why Attractive People are More Successful, which found that good-looking people tend to earn considerably more than their less attractive co-workers. But it’s not just physical attributes that help perpetuate unconscious bias, says

? really

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Carla Benest, Counsel and Head of the Jersey employment practice at law firm Mourant Ozannes. She says Google’s disappointing diversity statistics – despite spending $265 million on a two-year programme to reduce unconscious bias – “weren’t really surprising given that they had opened a new building in California whose conference facilities were all named after historical male figures.” This thoughtless act helped perpetuate the unconscious assumption – rife in Silicon Valley – that men make the best engineers.

THEM OR US The wide range of areas in which we’re biased makes it extremely hard to pin down any single cause. As the following example illustrates, bias is so involuntary and instinctive that it can even be directed at one’s own demographic – contradicting the assumption that we’re biased because we fear ‘the other’ or we naturally support those who are ‘like us’. During the 2016 American presidential campaigns, Jordan Klepper, a comedian working on late-night US TV programme The Daily Show, went out to interview Trump supporters. Having asked one woman “Can a woman be president?”, he was told: “The presidency is a man’s job. A female has more hormones… hot flashes. She could start a war in 10 seconds.” It was only when Klepper pointed out: “Haven’t all wars been started by men?” that she offered a delayed and timid “Yes”. Such stereotyping relates to Tiffany Jana’s point – it saves people from having to think too hard. Which is why the first step to reducing bias is to encourage greater awareness. “I conduct discrimination training, and the first question I ask any group is how biased they are. Typically, nobody raises their hands,” says Carla Benest. The problem, she adds, is likely to be bigger in smaller jurisdictions like the Channel Islands. “People here are more familiar with each other and come from similar economic backgrounds and educational establishments. Unconscious bias is so limitless and broad that people need to take active steps to become aware of what their potential prejudices are.”

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an impact on who’s recruited and promoted – even who earns more money. Research findings show, for example, that blonde women earn higher salaries than their brunette, redheaded or blackhaired counterparts. Plus, as a study featured in the Journal of Applied Psychology reported: ‘A person can earn an extra $789 per year for every inch above average height they are’. Indeed, a bias for height is borne out by the fact that CEOs tend to be taller on average than the rest of the population. As Malcolm Gladwell wrote in his book

Business

Programming bias One way to boost that awareness, suggests Jana, is to take Harvard’s online Implicit Association Test. This covers 14 different topics that reveal, for example, most people’s automatic preference for straight, as opposed to gay, people; thin people over those who are overweight; and the tendency to link ‘female’ with ‘family’, and ‘male’ with ‘career’.

BEING HUMAN But awareness alone isn’t enough. Nor is an eagerness to use technology to eradicate the problem of bias in recruitment and promotion. Cyrille Joffre, Chief Technology and Information Officer at telecommunications company Sure, describes one experiment in which recruiters reviewed identical CVs and selected more applicants with whitesounding names than black-sounding names. “If an algorithm learns what a ‘good’ hire looks like based on that kind of biased data, it will make biased hiring

Bias is so involuntary and instinctive, it can even be directed at one’s own demographic

decisions,” says Joffre (see box right). Accepting that we’re biased doesn’t mean organisations should embrace positive discrimination by hiring or promoting people according to some artificial quota, says Carla Benest. It’s about recognising the areas of diversity that you want to increase and then focusing on generating a culture in which everyone can openly discuss their biases and feel free to call others out when they see it happening. “Training is beneficial, but it needs to be carefully thought through,” says Benest. “It’s not just about highlighting biases, but helping people understand the consequences, so they can identify how best to manage and deal with them.” Tiffany Jana agrees. “Adding diversity into a situation isn’t going to solve problems; it’s going to create new challenges. Because when you bring in people from different walks of life, you’re shaking up the status quo, which increases conflict and tension. “But while a unified experience gives us less to rub up against, exposing people to differences helps get us to a less biased place and opens up perspectives. As such, organisations need to provide reinforcing structures so that people know what they’re aiming for and why it’s important to reduce bias,” she says. In the meantime, there’s one action everyone can take, suggests Jana. “The busier you are, the more your brain relies on unconscious judgements and stereotypes, which is where human bias does its worst damage. Slowing down and systematising makes it easier to do this kind of deeply introspective work.” That includes being willing to recognise that we are all imperfect and hard wired for bias. It’s not necessarily a bad thing, just a function of being human. n DR LIZ ALEXANDER is an author, educator and book consultant to senior executives and business owners worldwide

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Despite business magnate Elon Musk’s assertion that intelligent robots “will be able to do everything better than us”, don’t expect them to eradicate our innate biases any time soon. On the contrary, as algorithms have become increasingly more complex (Facebook alone requires over 61 million lines of code), it’s easier for bias to creep in, explains Cyrille Joffre, Chief Technology and Information Officer at telecommunications firm Sure. “At their core, algorithms mimic human decision-making – they are, in part, our opinions embedded in code. They are typically trained to learn from past successes, which may embed existing biases. For example, a study by Carnegie Mellon University found that Google’s online advertising once showed an ad for high-income jobs to men much more often than it did to women.” Legal safeguards don’t always prevent this, he adds. “Algorithms used by insurance companies, while not allowed by law to label gender, could still make a decision based on someone’s name, to determine whether they are male or female.” Which is how preferential treatment often occurs. On the flipside, artificial intelligence (AI) and machine learning is being leveraged to help counter unconscious bias. “Writers often unwittingly sprinkle copy with keywords or phrases containing cues that can dissuade certain candidates from applying for jobs – like ‘coding ninja’ – that dampen the interest of older candidates and women,” Joffre points out. “Platforms such as Textio flag potentially problematic words, suggesting alternatives that will perform more fairly. Meanwhile, Talent Sonar draws on five essential hiring practices to help counter unconscious bias during the hiring process.”

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THE AGENDA

The Agenda is compiled by BL’s Fashion and Lifestyle Editor, Thom O’Dwyer, with additional material by Danny Cobbs

has an Indian summer

1. BOLD AND BEAUTIFUL In 2016, Kev Munday was named ‘one of five British artists to invest in right now’ by The Telegraph. Now 31, he was part of the urban art scene in his teens, initially influenced by notable street artists such as Jean-Michel Basquiat, Keith Haring, David Choe and Andy Howell. He’s now developed his own unique style, creating fun, vibrant, graphic artwork inspired by people-watching and everyday life. Exaggerating and celebrating the ordinary is at the core of his work. “My goal is to make people think and smile at the same time, and I hope my work communicates as much to a seven-year-old as it does to a serious art collector,” he explains. Working with a wide range of media, including spray paint, brushes, paint markers and digital illustration, Munday is slowly but surely making his way to the big time. He was recently commissioned by Disney and Fracture Skateboards to brighten up their brands. Considering the hugely inflated price of much contemporary art these days, Munday’s art is a veritable bargain. So, get in there while you still can. Pictured here is Autumn Downfall III. The perfect painting and a sound investment for the fledgling art collector. £POA, www.kevmunday.co.uk

INSIDE THE AGENDA: ACCESSORIES, ART, BEAUTY, DRINK, FASHION, FOOD, FOOTWEAR, FURNITURE, INTERIORS, JEWELLERY Everything you need for a more stylish life.

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THE AGENDA

2 3. THE EYES HAVE IT Naked Heat is the newest addition to cult make-up brand Urban Decay’s hotter-than-hot eyeshadow palettes. This is the most smouldering yet, offering 12 new drop-dead-gorgeous, warm, amber-hued neutral shades all reminiscent of autumn foliage at its brightest and best. The new, on-trend neutral range includes bright browns, rich earthy sienna hues, sunbaked terracotta, copper, burnt reds, butterscotch, pumpkin and rich roasted orange. All the colours you’d find on a leaf-peeping tour of New England. This palette is everything a girl needs to create seductive daytime looks or an intensely smoky night-time expression, and everything in between. £39.50, www.urbandecay.co.uk

2. COAT TO COVET This season was British-born Clare Waight Keller’s last show with Chloé before taking on the five-star mantle of Artistic Director at luxury Paris fashion house Givenchy. Needless to say, she pulled out all the stops, ensuring that both the Pre-Fall 17 and the Autumn/Winter 17 shows were events to remember. A sense of volume, fluidity and movement with a free-spirited tinge of the 1970s dominated the catwalk – think Woody Allen films Manhattan and Annie Hall. The flared, oversized silhouette of the cocoon-shaped wool-blend coat, pictured, ticked all the right boxes. With effortless attitude, it’s a vision of modern, pared-down, carefree femininity. Unlined for bulk-free layering when the temperatures drop, it’s the perfect coat for transitioning between seasons. With sumptuous style, this cozy cover-up will definitely keep out the chill. £1,280, www.mytheresa.com

4. IF THE SHOE FITS… Sarah Chofakian is the most internationally recognised shoe and handbag designer in Brazil. Working from her studio and showroom in the chic Jardins district of São Paulo, her shoe designs spring from her obsessive interest in art, history, film and foreign travel. Comfort above all is the deciding factor of her footwear – pure lines, vivid colour, and off-beat colour combinations with a vintage touch define her refined style. Though classical in concept, the designer still pushes boundaries. All her shoes are handmade by skilled artisans in São Paulo, and produced in four small factories where only 500 pairs are produced per month. This strappy round-toe pump features a high Pompadour heel, intricate cut-outs and a side buckle ankle strap. As Marilyn Monroe once said: “Give a girl the right shoes, and she can conquer the world.” That certainly sums up Signora Chofakian’s fine footwear. £509, www.farfetch.com

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5. LET THERE BE LIGHT! Conceptual design studio Graypants was founded in 2008 by architecture students Jonathan Junker and Seth Grizzle. Based in Seattle and Amsterdam, the operation is more than just a design house; it’s a hyper-dynamic creative thinktank. The design team use handmade materials, most of them recycled, to create their products. Their first project was the wildly successful Slice Armchair, made out of sheets of recycled cardboard boxes. They went on to use the same environmentally friendly technique to create a wide range of engaging, bold visionary lighting – the Scraplight Series – including the Drop Pendant Lamp Shades pictured. Warm, intimate, functional lighting for any occasion or type of space. £369 to £469, www.noxuhome.com

6. QUINTESSENTIALLY BRITISH Established by designer Jamie Milestone in 2008, London Undercover has set out to return the humble umbrella to its rightful position as a proper fashion accessory. With a celebration of Britishness at its core, the brand has succeeded hands down in bringing new life to what is generally perceived as a boring, disposable, purely utilitarian item. Looking at this ultra-bright orange City Gent brolly, they’ve succeeded in spades. Crafted in the label’s London workshop using age-old techniques, the umbrella opens to a sturdy eight-rib frame and has a sleek Malacca-wood cane handle with a beechwood shaft and tip. When not in use, it’s secured by a classically correct brown leather strap. Aside from making a rainy-day statement, there’ll be no mistaking whose brolly is whose when leaving the office on a typically British rainy day. £145, www.matchesfashion.com

7. BAGS OF STYLE Thanks to the Gucci’s multitalented Creative Director Alessandro Michele, being a Gucci Girl – or Gucci Boy, for that matter – has never been more fun. Since taking on the role of Gucci’s Creative Maestro in January 2015, the man’s prodigious reservoir of ideas and off-the-wall imagination shows no sign of drying up. The Pre-Fall 17 collection was a vast layer-upon-layer mixed bag of wacky imagery along with lashings of 90s street fashion vibe. Right across the board, Michele has totally rejuvenated the Gucci brand and turned it into the most powerful luxury label on earth. Pictured here is the ultimate statement accessory. Crafted in Italy from smooth, soft-as-butter leather, Gucci’s Sylvie shoulder bag is a compact, structured design. Heavily embellished with lashings of golden bling, the bag features a navy and red ribbon that creates a sweet and charming bow. Emblazoned with the Gucci logo, this über-cool shoulder bag has the wow factor big time! £1,670, www.mytheresa.com

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THE AGENDA

8. BACK ON TRACK Tracksuits have had a colourful past in men’s fashion. In the 1980s and 1990s, when Brit Pop ruled the waves, they were the height of hip. Blur’s Damon Albarn and Oasis championed the tracksuit as the epitome of lad swagger and the rebellious spirit of the time. And then it died a death. But now, leading menswear designers across the world have decreed that the posh tracksuit is back. It’s a retro sportswear hit. Coming in a variety of bold colours and skinny-cut styles, the new ‘athleisure’ looks are well suited for at-home leisure or sipping cool cocktails in a casual environment. At Gucci, designer Alessandro Michele’s contemporary take on the luxury tracksuit went for neon bright colours, like this fluorescent orange wool-cotton blend Technical GG Web jacket and matching track pants. With a nostalgic edge, the classic shellsuit has been given a chilled, chic update, turning it into something more inventive and totally now. Go for it, guys! Jacket, £640; track pants, £560, www.farfetch.com

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9. PRETTY AS A PUMPKIN Until his death in 2009, innovative French designer Pierre Paulin was most famous for designing eye-catching, convivial, comfortable, futuristic chairs shaped like mushrooms, oysters, tongues, tulips and pumpkins – using foam and metallic frames covered with slick stretch material. His furniture has achieved iconic status and is now in collections at London’s Victoria and Albert Museum, New York’s Museum of Modern Art, and the Musée des Arts Décoratifs in Paris. Paulin’s groundbreaking creations are also avidly collected by fashion royalty, including Tom Ford, Miuccia Prada and Christian Lacroix. One of Paulin’s most famous and sought-after designs – and still produced by luxury furniture manufacturer Ligne Roset – is the Pumpkin Lounge Chair. Evocative of a giant pumpkin, it cradles the sitter in its voluptuous encompassing shell. Pictured here is a 1970s original from the fabulous online marketplace for the most beautiful things on earth, 1stdibs.com. £3,393, www.1stdibs.com

10. SOFT SHOE SHUFFLE Founded in 1966 by Michele Taddei and Renzo Zengiaro, the name Bottega Veneta simply means ‘Venetian atelier’ or workshop. The brand – currently under the creative directorship of German-born designer Tomas Maier, who also produces eponymous men’s and women’s fashion collections – focuses on timeless, elegant designs for its clothing range and its iconic luxury leather goods. The stylish, soft and comfy suede espadrilles shown here are a contemporary take on a laid-back shoe style. They have an almond-shaped toe, as well as the brand’s trademark intrecciato weave at the back, and are grounded on a natural jute midsole. The perfect footwear for a glowing Indian late summer day! £395, www.matchesfashion.com

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11 11. SHAPE SHIFTER Need a two-seater sports car to remind you why you fell in love with driving in the first place? Of course you do! The easy bit is that it simply has to be a Porsche 911 GT3, writes Danny Cobbs. The hard bit is deciding which transmission to choose. Porsche never intended to put a manual gearbox in the GT3. Its story was supposed to begin and end with the sublime sevenspeed PDK automatic transmission. But massive customer demand for a stick-shift has added a rather special postscript to this road-legal track car. And that demand has easily outstripped supply. Even if you can afford the hefty price tag for the latest generation GT3 – and despite the new car not being a ‘limited edition’ – anecdotal evidence suggests you’ll need to be a good customer of your local Porsche dealer to stand half a chance of owning one.

THE AGENDA

‘GT’ is, of course, the label Porsche uses for its most hardcore road models, and is a link to its racing heritage. This means an exhaustive re-engineering of the bog-standard 911 – on which the GT3 is based – removing all unnecessary fripperies to save weight. For this next generation of GT3, then, the power is delivered by a new 4.0 litre flat-six, upping output to a wicked 493bhp. Not only is it now quicker – 0-62mph in 3.4 seconds and 198mph top speed – it feels insanely faster, too. The GT3 is an absolute masterpiece in automotive engineering and the inclusion of the six-speed manual gearbox adds yet another dimension to its magic. The manual may seem a backward step for Porsche, especially in the high-tech world of the millisecond paddle-shifting PDK, yet it’s as precise and quick as you need it to be, and is never overwhelmed by the engine’s intensity.

The clutch pedal is perfectly weighted and the brake pedal neatly positioned to roll off for heel-and-toe downshifts and, more crucially, brings with it the physical interaction that GT3 customers have long yearned for. Choice is a good thing, and irrespective of transmission preference, the GT3 remains a very good choice indeed. From £111,802, www.porsche.com/uk

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THE AGENDA

13. FINE-TUNED TAILORING Victoria Victoria Beckham is the diffusion range – or more playful younger sibling – of the designer’s hugely successful eponymous collection. Following the showing of her Autumn/Winter 2017 collection, the designer explained: “I like to empower women and make it easy for them. My collection is about beautiful luxury clothing that women can feel secure in.” Strength, femininity and equality were all perspectives highlighted in both her mainline and diffusion collections. The newly relaxed tailoring and no-nonsense, pared-down styling epitomised the design aesthetic at the Victoria Victoria Beckham London catwalk show. Pictured here, adding a splash of burnt orange retro colour, the chic, tailored, uncluttered sleeveless top is teamed up with matching mid-rise trousers for a new feminine take on the classic ‘pant suit’. Both timeless pieces with a minimalist modern twist. £295, sleeveless top; £450, trousers, www.mytheresa.com

12. ART UNDERFOOT After five years of hard graft and innovative experimentation, Behruz Studio – one of Australia’s leading dealers in exclusive rugs, antique carpets, kilims and related textiles – and Australian artists Doble & Strong have created a bravura collection of 12 silk and wool handwoven rugs. Painter Robert Doble and photographer Simon Strong have been collaborating since 2010. Their avant-garde masterpieces mostly focus on the human form, and the challenging and erotic works have inspired a loyal following of collectors. Working with paintings and drawings by the two artists, Behruz Aligorgi travelled to Nepal to work with traditional Tibetan rug weavers in translating their surreal images into woven reality. The hallucinatory and bizarrely beautiful Neoteny Design rug shown here is 300cm x 407cm, though it can be custom-made to any size – contact Behruz Studio for a quote (www.behruzstudio.com). This is one floor covering that promises to transform any home into a contemporary art museum. £19,986, www.1stdibs.com

14. CANADIAN COOL Twins Dean and Dan Caten – founders and owners of über-trendy label Dsquared2 – have tapped into their Canadian roots for their Autumn/Winter 2017 men’s collection. Hiking, indigenous wildlife, Canada’s national symbol the maple leaf, rocky mountains, vivid autumnal colours… All of them were referenced on the catwalk. The designers christened their quirky styling ‘glamorous mountaineering’. The fun printed t-shirt here is emblazoned with the Dsquared2 logo, along with multicoloured Canadian mountaineering graphics depicting a bear, an elk, a fox, and a lumberjack, lofty pine trees, autumn leaves and a signature maple leaf. Looks like the pop stars’ favourite design duo have struck gold again! £160, www.farfetch.com

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THE AGENDA

15 15. MIRROR, MIRROR… Italian architect and designer Ettore Sottsass (1917-2007) became the godfather of cool when, in 1981, he founded Memphis, the Milan-based postmodern design collective that would revolutionise the creative and commercial logic of the design world in the late 20th century. He and 21 like-minded founder members of the radical movement had tired of the formulaic, humourless modernism that became endemic in the 1970s. Named after a Bob Dylan song, the group offered bold, geometric, minimalist and shocking designs for furniture, fabrics, glassware, ceramics and metalwork. Designed and signed by Sottsass, the original 2007 Dioniso 4 Mirror, pictured, features a polychromatic frame in geometric shapes surrounding the central mirror. Typical of the Memphis ground-breaking style, this mirror is original first-class wall-hanging art. £5,656, www.1stdibs.com

17. GOING NUTS Forget about avocados, quinoa, kale, blueberries and all the rest, the hottest superfood in town now is Tiger Nuts. Although they’re not really a nut at all, but a tiny edible root tuber, they’re bursting with health benefits and goodness. High in potassium, iron and magnesium, Omega 9 and vitamins C and E, these delicious, creamy nuggets are also a mild appetite suppressant. Sweet tasting with a hint of coconut and a chewy texture, they are organically grown, high in fibre, vegan, non-GMO, and 100 per cent free of gluten, lactose, grain, dairy, sugar – and nuts. A wide range of Tiger Nuts are on offer at Yumbles – premium peeled and unpeeled; flour, powder or milled; ultra-special gourmet Chufa de Valencia; and the award-winning organic cacao dusted Tiger Nuts. Don’t miss out! £12.59, 1kg unpeeled Tiger Nuts, www.yumbles.com

16. AUTUMNAL ELEGANCE Parisian jewellery designer Laurence Coste’s über-chic London boutique has become a trendy shopping destination for sophisticated, stylish women from all over the globe since opening in 2006. A-list celebrities Emma Thompson, Emma Watson and Dame Maggie Smith are among Mlle Coste’s devoted customers. Bespoke yet affordable, her exquisite creations suit all occasions. By appointment, the designer can also create one-off pieces of jewellery to the customer’s specifications. For colourful handcrafted clip-on earrings, look no further. Pictured here is a gorgeous pair of drop earrings inspired by autumn’s falling leaves. The finely crafted Maple Leaf Earrings in coraline and hematite are set in gold-plated sterling silver. An elegant addition to any new season wardrobe. £145, 40mm drop earrings; £225, 60mm drop earrings, www.laurence-coste.com

18. HALLOWEEN HOOCH Yumbles is UK’s biggest online marketplace for artisan food, drink and gifts, featuring more than 600 small-batch British suppliers. Everything is handcrafted with love, care and passion, so you’re sure to find the best and most unique produce available. Its latest discovery is UK-based The Sweet Potato Spirit Company – whose distinctive, off-the-wall, high-voltage spirits are created in true Appalachian home-brew style by triple-distilling the flesh of home-grown sweet potatoes. This year, the artisan distillery was awarded three gold medals at the World Spirit Awards for its flavoured moonshines. One of those awards went to its Toffee Apple Moonshine – the perfect tipple for all Halloween festivities. Handmade in copper stills and produced in small batches, the spirit has a rich, creamy-caramel, toffee apple taste. Each bottle is individually numbered and finished by hand with a wax seal. A whole new taste sensation! £17.99 50cl, www.yumbles.com

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Directory To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or carl.methven@blglobal.co.uk

Great learning boosts performance It’s a simple fact of business that people who know how to use their IT systems properly are more productive and happier at work. At ALX Training, it is our mission to ensure that every person we work with can use their essential applications properly, saving time, smoothing processes and creating a more productive workplace.

Appleby is one of the world’s largest providers of offshore legal advice and services. Uniquely positioned in the key offshore jurisdictions of Bermuda, BVI, the Cayman Islands, Guernsey, Isle of Man, Jersey, Mauritius and the Seychelles, as well as the international financial centres of London, Hong Kong and Shanghai. We are also the only firm to have offices in all three British Crown Dependencies. Our services include:

Our trainers are renowned for their product knowledge, and their friendly and energetic attitudes to training help them get the best from every person they teach.

l Corporate l Dispute Resolution l Private Client & Trusts l Property

Learning starts at induction We are well-known for our range of Microsoft Office courses which includes Office 365, Excel, Outlook, PowerPoint, Word, Project, SharePoint and Visio but our clients know we can do much more.

Members of the Jersey and Guernsey offices regularly advise London City and international law firms on all legal aspects of offshore corporate, finance and investment fund transactions and arrangements in the Channel Islands.

Not only do we train on well-known accounting packages such a Xero and QuickBooks but we create courses on bespoke in-house systems. We design unique courses specifically for your organisation, so that your staff learn precisely the information they need to work efficiently and effectively.

For more information visit our website www.applebyglobal.com/our-expertise

We know there’s no better place for your new colleagues to start learning than during their induction programme, so we develop bespoke induction courses that give your new starters all the information they need to hit the ground running. We can even deliver content online, so training can be ongoing and continuous.

Michael Cushing Managing Partner, Jersey +44 (0)1534 818 395 mcushing@applebyglobal.com Wendy Benjamin Managing Partner, Guernsey +44 (0)1481 755 603 wbenjamin@applebyglobal.com

Ashburton Investments is a new generation investment manager building on a solid foundation to provide global investors with multi asset, specialist emerging market and equity products. As part of the FirstRand Group, one of South Africa’s largest financial services institutions, Ashburton has a strong footprint in Africa and understands volatile emerging markets. Ashburton believes that taking a broad-brush view of emerging markets is no longer effective and it is important to make country by country judgements enabling its specialism in Africa and India. For more than 30 years multi asset has been the cornerstone of the business, with the product set evolving over time to suit ever changing market conditions and understanding clients’ needs to effectively manage risk and access more sources of return. Globally, Ashburton Investments has over £8.8bn under management as at June 2017 with offices in the Channel Islands, United Kingdom, South Africa, and the United Arab Emirates. For more information please do not hesitate to get in touch: Laythamm Malorey E: laythamm.malorey@ashburton.com T: +44 (0)1534 512010 Tim Townsend E: timothy.townsend@ashburton.com T: +44 (0)1534 512106 www.ashburtoninvestments.com

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Independent and Professional We offer a full range of management and fiduciary services to our domestic and international private clients: l Family office - bespoke assurance l Wealth management - your strategy l Trustee - impartiality with vision l Corporate services - attention to detail l Good governance - a helpful eye l Strategic guidance- controlled ideas We aim to assist in the provision of personal service to meet your requirements. Ask us. Being vigilant and proactive in the face of a fast changing legal, economic and fiscal landscape. We can provide the focus to your solution. Try us. Our team has many years of experience dealing with a wide range of clients in different countries. We look to provide good corporate governance to achieve your aim. Contact us: www.baccata.co.je Tel: 00 44 1534 870670 or Nicholas Falla nfalla@baccata.co.je Mrs Ann Williams awilliams@baccata.co.je Mrs Áine O’Reilly aoreilly@baccata.co.je Licensed by the Jersey Financial Services Commission in the conduct of trust ompany business

Carey Olsen is a leading offshore law firm advising on British Virgin Islands, Cayman Islands, Guernsey and Jersey law across a global network of eight international offices. We are a full service firm working across banking and finance, corporate and M&A, investment funds and private equity, trusts and private wealth, dispute resolution, insolvency and property law. Our clients include global financial institutions, investment funds, private equity houses, multi-national corporations, public organisations, sovereign wealth funds, high net worth individuals, family offices, directors, trustees and private clients. We work alongside all of the major onshore law firms, accountancy firms and insolvency practitioners on corporate transactions and matters involving our jurisdictions. Our advice is delivered by an approachable and experienced team of commerciallyminded lawyers, led by 48 partners, who help our clients achieve their objectives. We have the expertise and resources to handle the most complex international transactions combined with a personal approach to business. Contact: guernsey@careyolsen.com T +44 (0)1481 727272 jerseyco@careyolsen.com T +44 (0)1534 888900 www.careyolsen.com

Deloitte LLP Deloitte LLP offers professional services to the UK and European market. The company has the broadest and deepest range of skills of any business advisory organisation and employs over 14,400 exceptional people in 28 offices in the UK and Switzerland. We provide professional services and advice to many leading businesses, government departments and public sector bodies and publish many influential studies and thought leadership pieces. Deloitte LLP employs 160 professionals across the Jersey, Guernsey and the Isle of Man offices. It is the UK member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its global network of 150 member firms, each of which is a legally separate and independent entity. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. For further information please do not hesitate to contact: John Clacy, Partner, Guernsey Email:jclacy@deloitte.co.uk Phone +44 (0) 1481 724011 Greg Branch, Partner, Jersey Email: gbranch@deloitte.co.uk Phone: +44(0)1534 824325 www.deloitte.com

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