Alistair Darling may not agree, but going green has well and truly matured from a high-falutin’, hippy-go-lucky concept that had nothing to do with business, to being enshrined in myriad European, British and even London-centric legislation.
Tax breaks have been created to persuade business to be more environmentally conscious and levies have been created to punish non-compliance. Oil, meanwhile, will continue to pose its usual miseries on industry, having crossed the $110 per barrel level – gaining around $3 alone inside Budget week.
Fleets are bearing the changes too and in this issue of Decisions, we look at some of the most pressing issues and possible solutions to make them more efficient by going green. Salary sacrifice programs, enabling companies to build fleets cheaply by bringing vehicles under the same banner as many staff benefits, are emerging as one way to keep costs down and enjoy tax reductions for greener cars.
WhatCar? Editor Steve Fowler updates our green cars review – and for those who prefer not to shell out more on compliance with Brussels’ emerald-coloured targets, we’ve profiled the bicycle market for the first time. Two wheels are nothing if not cheap and environmentally friendly.
To download the full Decisions supplement, click here.
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It seems like every time the pensions market looks as though it’s on course for getting itself sorted out, a new crisis blows up. One minute, a twitch in long-dated gilt yields balloons pension liabilities; the next minute the bottom falls out of the asset markets and so scheme returns go negative.
Now it transpires that we’ve been using the wrong measuring stick, or so says the UK Accounting Standards Board. By using a ‘risk-free’ rate to discount future scheme liabilities, rather than the high-quality corporate bond rate, pension funds could find they have significantly bigger pensioner promises that they have to put in their accounts.
Offsetting that, the ASB doesn’t think that non-guaranteed future pay increases should form part of the present-day calculation of the ultimate defined benefit liability. But other proposals would affect the measurement of pension scheme assets. All in, BT reckons that its £400m pension scheme deficit would look more like £4.6bn under the proposed rules. Ouch.
By the way, the Pensions Regulator is about to get serious about longevity as a risk issue. Some actuaries are saying that we’re all going to live longer than any remaining DB pension scheme ever will.
To download the full Decisions supplement, click here.
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December 2007 - Pensions & employee benefits
How much are your employees squirreling away? Judging by all the evidence, nowhere near enough – and the pension pot could be as little as £20,000-£30,000.
Not even the most generous annuity can do much with that, our most prolific pensions writer Anthony Harrington claims.
If you’re looking for good news, you’ve come to the wrong place. Not even the fact that we’re all living longer comes as much good news – not if you’re an FD with a final salary scheme to fund and certainly not if you’re an actuary, increasingly frustrated by the inability of mere mortals to demonstrate their mortality.
Thanks to work undertaken by Pensions Capital Strategies, we’ve discovered the best and worst FTSE-100 companies to work at, from a longevity point of view. Where does your company rank?
To download the full Decisions supplement, click here.
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October
2007 - Fleet management
Most people like to drive and almost everyone thinks they’re good at it. Unfortunately, this is rarely the case – drivers with an over-inflated opinion of their own abilities are often responsible for accidents. And accidents, as well as being responsible for a huge loss of life, cost companies millions.
Businesses have a responsibility – and, very soon, a legal requirement – to ensure their drivers are both capable and in good shape. We take an in-depth look at what happens when companies don’t – in terms of both human and financial costs.
We also investigate an impending change to company car tax which will see those drivers who choose lower-emission vehicles benefiting from significantly reduced tax bills. Will it be enough to tempt executive drivers out of their BMW 7-Series? Perhaps not in the short term, but there are several new cars on the horizon which may just prove tempting enough.
Consolidation continues in the fleet management sector. FDs must become increasingly creative in their search for further cost savings.
And, for those of you who have a fleet that spans several countries, if not continents, we cover that too.
To download the full Decisions supplement, click here.
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Sep
tember 2007 - The Intelligent Organisation
The six largest accountancy firms in the world gave finance directors something of a scare earlier this year when a report they had collaborated on mooted the idea of real-time financial reporting. The prospect of such a move is certainly possible – given time – but is it wanted or, more importantly, needed?
True, investors would be able to make informed decisions based on up-to-the minute information, but it also brings with it a risk of investments being made based on short-termism and knee-jerk reactions. The debate is just one example of how corporate data – and there are terabytes of the stuff within large organisations – is at the centre of current business and financial strategy. Making sense of that data, whether it be for internal or external consumption, provides business leaders with a level of insight into their companies that they have so far only dreamt about.
Not only does this make your relationship with the CIO very important, but it also demands a greater understanding of the latest developments in technology, whether that be business intelligence, accounting intelligence, or something else entirely.
To download the full Decisions supplement, click here.
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September
2007 - Credit management
Money makes the world go round, the world go round, as the song from Cabaret put it. How true. But only, of course, if money itself goes round and round.
Credit management, long regarded as a backroom job – the mopping up operation after a successful sales initiative – is gradually (sometimes grudgingly) being regarded as a value-adding function in its own right. Articles in this Decisions supplement by Peter Bartram (on pages 10 and 12) and Alex Blyth reveal how good credit management can help identify sales opportunities, increase customer satisfaction, reduce finance function costs and improve a company’s borrowing capacity, enabling it to raise extra funds at lower cost.
But there’s a funny thing about credit management – and it’s the flip side: prompt payment. No reputable business we know of would deliberately breach its commercial contract terms – not delivery times, not product or service quality. And yet, as Jules Stewart reports on this page, big companies often think nothing of unilaterally breaking the contract terms relating to payments to smaller suppliers. It’s an unacceptable, counter-productive practice. Money only works when it goes round and round.
To download the full Decisions supplement, click here.
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July/August
2007 - Energy strategy
Never has energy use played greater on the national conscience. Environmental issues have climbed to the top of the political agenda and have become the dinner party conversation of choice. It’s official – it’s cool to be green...
But being green isn’t about recycling the empties and walking the kids to school. Business is being asked to lead the charge like never before. Alistair Darling, former trade minister, summed up the issue at the launch of an energy white paper: “We face two big challenges – climate change and maintaining stable and affordable energy supply in an increasingly unstable world.”
So, on page 1, we look at how unstable energy prices have affected the corporate world and what measures some have taken to deal with the issue. As flying has always been a target for environmentalists, we take a closer look at the issues on page 4. And will our energy needs be provided by nuclear, coal, wind or something else entirely? Find out on page 6.
Finally, road transport contributes about a quarter of all emissions. Find out what you and your company can do to whittle this down on page 9.
Download the entire supplement, here .
June
2007 - Pensions & employee benefits
Your staff may be your most important assets – but their pension scheme is probably your biggest liability.
Worse, with every twitch in the bond markets the funding gap is flapping all over the place. As we go to press, word reaches us that the biggest pensions schemes are actually now in surplus – but that could all come to an end if a big buyer shoves the long gilt yield down a few basis points.
What to do about it? Start by having a look at our article on page 3, which has some imaginative approaches to the pension scheme deficit volatility problem.
When we interviewed David Roache, FD of FTSE-350 company Acertec, last month, we were so impressed by the way he closed off the company pension scheme – getting complete buy-in from the employees, and over the heads of the unions – that we thought we should look at the communication issue in more depth. So have a look at page 10.
Finally, if all of this is making you stressed out, don’t start lighting up the fags. As Karen Day sets out on page three and on page 15, a healthier workforce will cost your company less. Chill your way to profitability…
To download this supplement, click here .
May
2007 - Human capital management
Your staff are your most important assets. They are also among your most expensive and most difficult to find.
So, ensuring that you choose the right training and development programmes for your employees is essential: push them too hard and they may well crack, cut them too much slack and they’ll more than likely underperform.
The future of every company depends on the quality and the nourishment of its emerging talent. We look into how companies can best approach their staff development strategies: MBAs, on-the-job training, e-learning... Or is it a combination of all three?
What role should the finance director be playing in the human capital strategy? As FD, you can play a big part in staff development – just make sure it’s not too big a part.
Your business is global so your talent management should be, too. Your staff should operate just as well whether they’re in Cape Town, Kazakhstan or Croydon.
And, finally, the male, pale and stale effect is still in evidence. Look further afield culturally as well as geographically.
To download the full Decisions supplement, click here .
April
2007 - Commercial property
Deciding whether to plump for a hotel or play safe on another couple of houses during the traditional Christmas game of Monopoly is probably the closest many FDs have come to thinking strategically about their property portfolios recently.
They are, at the end of the day, just bricks. Well, maybe. But a vast amount of capital is tied up in the average large company’s property portfolio, and thinking creatively about how that capital can be better utilised should be part and parcel of the FDs job.
Both Sainsbury and Little Chef saw sale and leaseback strategies as being right for them recently – with varying degrees of success. Marks & Spencer, on the other hand, used its property to plug a yawning gap in its pensions pot – without hitting the balance sheet. Meanwhile, Gordon Brown has introduced an entirely new property investment regime; the sector continues to boom; and warehouses are more than the oversized sheds you thought they were; Concrete proof – property matters...
To download the full Decisions supplement, click here .
March 2007 - Pensions & employee benefits
It’s a bit like trying to squeeze a balloon. No matter how tightly you grip the pensions problem, another bit of it pops up between your fingers.
Take the government’s new ‘personal account’ pensions, for example. It’s hard to think that this is anything more than a Mk II version of the almost completely useless ‘stakeholder’ pensions and, as Anthony Harrington points out in this supplement, they seem likely to be grossly under-funded and yet foster the public perception that they are quite adequate.
We show how the Pension Protection Fund undershot its levy revenue because of the action taken by many schemes to finance their deficits and so reduce their levy dues. Fine, except that it leaves the PPF looking distinctly unprotected from a few big hits.
Our intrepid pensions expert also goes on to shed light on a new asset class that might offer higher yields without raising pension scheme risk. Mathematically it looks good. But illogical markets have a way of occasionally making rational mathematics look silly.
To download the full Decisions supplement, click here .
February 2007 - Fleet management
Beside one of the main arteries into London, there is a painted message for the luckless commuters who crawl into the capital each morning. “Why do I do this every day?” it once read. It has since changed to read, “Why do I stil l do this everyday?”
It’s a good question - the UK is nearing gridlock, with too many cars clogging up too few roads. The answer? According to a recently published government report – the Eddington Transport Study – toll roads are the answer. We take a closer look.
We also investigate the issues that will face fleet operators following this summer's smoking ban; how fleets can be green while staying in the black, and look at Gordon Brown's latest attack on company vehicles.
To download the full Decisions supplement, click here .
December
2006 - Pensions and employee benefits
Our third look this year at pensions and employee benefits takes us
into familiar territory, but with new insights and opinions to some intractable
problems.
Anthony Harrington, who has just been named Pensions Writer of the Year in the trade press category of the State Street Corporation awards, has been writing about pensions matters for long enough to make him more than qualified to pen our retrospective at how the issues have changed over the years (remember pensions holidays?).
Also, we were struck by the problems raised in a recent issue of Stella, the Sunday Telegraph women’s magazine, which drew attention to the problem of office jealousy. We asked Alex Blyth to investigate.
To download the full Decisions supplement, click here .
October 2006 - Credit managment
You can’t count the pennies if you don’t bring them in. Put it another way, we wish we had a pound for every time someone told us that revenue is vanity, profit is sanity but only cash is reality.
All the more surprising, then, that, for many companies, there is still so much work to do in establishing sound credit management strategies.
Some of the failings of current practice are amazingly obvious, such as the ranks of debtors who don’t pay up because of some dispute regarding quality or order fulfilment. Even more surprising is the number of companies that fail to keep regular tabs on the credit-worthiness of their customers. Incredible.
To download the full Decisions supplement, click here .
September 2006 - Fleet management
Over
the past two decades, we’ve forecast the death of the company car. This time we
predict its return – and all thanks to a crackdown on schemes designed to reduce
the pain of company car taxation.
We also review some of the coolest sat nav systems available today and take a detailed look at Toyota, the soon to be largest car manufacturer in the world. We delve into its business and its finance function to see what makes it tick.
To download the full Decisions supplement click here.
June 2006 - The intelligent organisation
The
vast amount of data held by modern companies is one of their biggest assets, but
an alarming number of businesses fail to make best use of that data and turn it
into meaningful information.
Some of the most useful and least accessible data held within an enterprise resides on legacy financial systems. The information held there is a goldmine of insight into trends, performance, potential growth areas and danger spots – greater knowledge of which can help grow a company’s bottom line. By delving into this vast swathe of data, business intelligence software can unearth hidden gems of information.
To download the full Decisions supplement click here.
June 2006 - Pensions & employee benefits
Final salary scheme deficits rise and fall with the markets – exacerbated by the impact of gilt swings on liabilities. Beyond the defined benefit arena, no one is saving enough and we’re living too long.
On this cheery note, Anthony Harrington, who has written thousands of words about pensions for us over the years, sets out his view of the sorry state we’ll be in, within the supplement We also look at some of the investment and fund management issues that are being addressed and offer some advice about employee benefit.
To download the full Decisions supplement click here.
The impact of increased regulation and the ongoing volatility of energy prices must be among the top five banes of a finance director's life - especially if they are responsible for large fleets.
As Financial Director was going to press Gordon Brown was preparing to deliver his 2006 Budget speech, with increased levies on environmentally damaging fuels high on the list of expected announcements. This supplement investigates their impact.
To download the full Decisions supplement click here.
March 2006 - Training and developing the finance team
Training is a good thing - but investment in this sort of intellectual capital ranks among the most nebulous, difficult to value and often hard to justify.
The range of choices on offer doesn't help. For finance professionals there is not only a great number of accountancy institutes, but an even greater nu mber of options available within each - and a much more competitive spirit between the various 'chartered bodies'.
To download the full Decisions supplement click here .
February 2006 - Pensions & employee benefits
There has never been a better time to use a cliche about this being turbulent times in the pensions world. It's not just the legislative mess as A-Day approaches nor the funding problem of final salary scheme deficits, though these are real enough.
It's the double-edged sword that not only do many people not realise what sort of trouble they are heading for in their old age, but that they have lost so much confidence in the pensions and savings industry.
To download the full Decisions supplement click here .
