Charity finance directors could be ideally placed to lead their organisations in an age of social bonds and performance-related-contracts, said Paul Palmer director of the Centre for Charity Effectiveness, last week.
Speaking at the Charity Finance Group's annual conference, he also suggested that finance directors who wanted the top roles in charities should try to change their job title to something other than finance director, take on special projects, broaden their focus from just finance and become a trustee: 51% of chief executives in the FTSE 100 were previously finance directors; it doesn't seem to be the same at charities, said Palmer.
But the director told several hundred delegates that a new financial landscape could pave the way for finance directors to step up. Palmer said: "As charities move away from grants to contracts and loans, leaders might require very different skills. If your charity is going down this route, there's a clear leadership role for the finance director. The move to chief executive can be an exciting journey, but you need to overcome some perceptions. And it's not an easy ride."
One piece of advice for finance directors was to look at changing their job title. "The title might be detrimental – there are perception issues with it. Trustees want the finance director to be a safe comfort blanket; they want you to conform to your role, so the title might not help you break out of that role. Change it and they might see you in a different light," said Palmer.
In the session 'How financial directors get to lead and be involved in strategic planning', Palmer also pointed out that most chief executives still came from outside the sector. "Charities still primarily import CEOs rather than export, which gives some idea of how trustees see people in the sector. But your knowledge and experience of the organisation should give you a competitive advantage. Trustees think you can understand the sector by reading a book, but it takes years," he explained.
Other advice was to be a trustee of another charity. "Two thirds of CEOs are also trustees at other charities. Resist being pigeon-holed as treasurer – take on another position."
In addition, he said chief executives should have vision, sharp people skills, a constructive relationship with the chair, be a good leader and communicator, and should understand marketing and fundraising.
"Think about your personal development. Work on your weaknesses rather than further developing your strengths. Get a coach if needed," Palmer told delegates.
Mark Watts, the recently retired chief executive of the RSPCA, told how he was offered the role when he retired from a finance director's position. On leaving, he sent a detailed document to trustees about how he thought the charity could be strengthened. It was well-received and they asked him to stay on as chief executive.
"I'd worked at the RSPCA for 28 years and saw six CEOs come and go. I had thought about going for the job but I wasn't confident enough," said Watts. "Most finance directors are very reserved and self-effacing, and trustees want to keep a good finance director in position." His advice was to "not be passive; express your opinions".
Watts added that finance directors should be the chief executive's "right hand man" and aware of drivers across the whole charity. "Have a good idea of how the organisation is performing, not just financially. Have clarity of vision and be able to communicate that. Have passion for the cause and make the impossible possible. And, don't be scared to ask questions because you think you'll look foolish," he told the audience.
Watts concluded by saying that finance directors should not underestimate the importance of their contribution at a time when financial recovery will be slow. "Maybe sometime you'll take on the reins, I promise you won't regret it," he said.
Other sessions focused on good leadership in general. Dr Robina Chatham, a training consultant and neuroscientist, said that in the current financial climate it was tempting for an organisation to just "try to survive", but it was important that the chief executive managed the future at the same time.
Chatham said that research she'd conducted with Cranfield University had found that long-term success for leaders came from understanding the world they work in. She discussed how important it was to understand covert and non-covert agendas at the office and who holds power and influence. "It could be those who are smokers who get together outside, it could be people who are fun to be with," she explained.
She also highlighted the importance of networking. "Lunchtimes are not for sitting at your desk with a sandwich if you want to be a leader," she said. "They're for networking. This is where people will share covert agendas in a less formal environment.
"And, innovative ideas come from making connections with people we don't know very well. If we stick to our friends in our team, you just get renovation, not innovation. Sparks of ideas come from conversation with someone from a totally different background. If you're not networking, you're not allowing the opportunity for really innovative ideas and you'll have no vision to inspire the organisation: 75% of your time should be spent on communication, innovating and networking," said Chatham.
She concluded that the top five traits leaders needed were high integrity, empathy, passion for motivation, courage to take risks and vision for the future.
Speaking on skills development for staff, Helen Simmons, finance director at London Diocesan Fund, offered a number of insights. She said that finance teams learn better when "doing" a task rather than reading about it or watching a demonstration.
Job swaps and shadowing also helped staff understand more about how a charity works, increasing empathy and allowing staff to cover for each other during times of sickness because they knew more about different roles.
Simmons said that at the beginning of every new job she had a meeting with all the staff: "Even if it's just for 10 minutes, find out if the job description matches the role and whether they have all the tools for the job.
"Staff need to have their needs met to do a good job. They need to feel biologically and physically safe, a sense of belonging and self-esteem. And, if they have personal issues, you need to try to understand these.
"You also need to be fair and transparent with pay and benefits. There's no point in providing biscuits if you haven't got these basics right," said Simmons.
She added that finance directors who wanted to step up to the chief executive position should gradually expose themselves to office and organisational politics and should also use any opportunities to present to staff and join project groups.
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EU finance ministers haggle over bank rules - Yahoo Finance
BRUSSELS (AP) -- European Union finance ministers are to meet in in Brussels Tuesday to hammer out an agreement over how high banks should build their defenses against future financial shocks, with the U.K. running the risk of being isolated over who should set the height.
The EU's 27 members agree on the need to increase capital reserves of banks, following an international agreement called Basel III, which was negotiated by the world's largest economies to avoid another financial meltdown such as the one brought on by the collapse of U.S. investment bank Lehman Brothers in 2008.
But the U.K. wants national regulators to be able to set requirements significantly higher than those of the EU — a position opposed by almost all other EU members, who fear investors might then prefer UK banks and flee from those in other countries.
On his way into the meeting Tuesday morning, George Osborne, the British chancellor of the exchequer, was non-committal about the possibility of reaching an agreement.
"This is a time of considerable uncertainty in the eurozone economies," he said, referring to the 17 countries — the U.K. not among them — that use the euro currency. "And that uncertainty is undermining the entire European recovery. And I think we're reaching a point where we've got to make a decision to see the eurozone stand behind their currency. A very important part of that, of course, is strengthening the entire European banking system. And that is what we intend to do today."
Once enacted, Basel III would require lenders to increase their highest-quality capital — such as equity and cash reserves — gradually from 2 percent of the risky assets they hold to 7 percent by 2019. An additional 2.5 percent would have to be built up during good times. All members of the G-20 have agreed to implement Basel III; if the European Union succeeds, it would become the first entity to institute the new requirements.
The U.K. is arguing that, because national taxpayers have to bail out banks when they fail, national authorities should be able to set more stringent requirements to guard against such failures. A compromise proposal offered by the Danes, who hold the rotating presidency of the European Union, would allow national authorities some leeway to increase requirements beyond those called for in the Basel III agreement. That proposal has broad support — except, so far, from the U.K.
The finance ministers can approve the compromise proposal without British support, through what is known as qualified majority voting, in which member countries have different numbers of votes according to their populations. However, there is a tradition in the EU that changes that would affect an industry in a particular country — such as the banking sector in the U.K. — are not forced into effect over the objections of that country, and consensus is sought.
"I think there should be a unanimous decision on such an important issue," Swedish Finance Minister Anders Borg said on his way into the meeting.
Stanford scholars examine big money's influence on elections - phys.org
This new money funded through super PACs was a main topic of discussion among leading political scientists and economists at a recent Stanford conference.
"In normal campaigns, which is to say where candidates are spending the money, they tend to have a balance between positive and negative ads," said Trevor Potter, a former commissioner at the Federal Elections Commission and lawyer for the Super PAC set up by comedian Stephen Colbert.
Now, Potter said, "You have new money in the system that wasn't there before in large sums running totally negative ads, and the candidate can't do anything about it legally."
The 2010 Supreme Court decision, Citizens United v. the Federal Elections Commission, gave rise to the "super" political action committees.
The case and subsequent court rulings resulted in a flood of unlimited donations to political action committees from wealthy donors, corporations and labor unions. The money from these donations can only be spent independent of the candidate.
Potter said the Citizens United decision reflected a lack of understanding of the political system among the justices, none of whom have held elective office.
"It was decided by a court that's lost touch with, has not had touch with, how politics actually work and how campaigns actually work," he said.
The daylong conference hosted by the Stanford Institute for Economic Policy Research (SIEPR) asked the question, "Is it government by the people, or the best government money can buy?"
Does big money influence outcomes or shape a candidate's message? And what about corruption – can a hefty infusion of cash influence policy? Political scientists, economists, campaign watchdogs and others joined to discuss the role of money in the presidential election.
Those who took to the stage included Stanford Professors Bruce Owen, Adam Bonica and David Brady, as well as colleagues from UCLA and Vanderbilt, and Washington insiders, media experts and campaign advisers.
"I don't think this is a partisan issue," said Joel Hyatt, co-founder and CEO of Current TV and the national finance chairman for Al Gore's 2000 presidential campaign. "I think it is totally corrupting our system of government."
The independent cash-raising organizations, or Super PACs (political action committees), were the target of much ire.
The issue of whether the new allowances for independent spending corrupt the political system was tackled throughout the event, as was whether bad politics can corrupt the economy.
Brady, a senior fellow at the Hoover Institution, SIEPR and the Freeman Spogli Institute, and Lynn Vavreck of UCLA dissected how experts use fiscal data to predict winners and losers in the presidential race.
Looking at economic indicators including gross domestic product and unemployment figures, Vavreck said, experts can reasonably predict election outcomes with a 75 percent accuracy rate.
"You can do 50 percent with the flip of a coin, so that extra little bit, I'll take that. It's pretty good," Vavreck said.
Generally, the incumbent is favored if there is economic growth – so if you believe that model, President Barack Obama wins if the economy continues its upward path. Logically then, an opponent of the incumbent is favored when growth stalls – Mitt Romney is next in the White House if the economy weakens or levels off.
But just because elections can be predicted fairly well based on economic data doesn't mean that the money spent and campaign messages crafted aren't relevant, Vavreck added. There is, after all, the 25 percent of the time that the model fails.
"This is going to be a close election," Brady said. "And this is an election in which the campaign and the candidates and the message are going to matter."
Brady highlighted Obama's approval rating – less than 50 percent. Historically, candidates lose if they go into an election with under 50 percent approval.
He also pointed to poll numbers showing more independents rallying behind Romney when it comes to the economy and job creation. The independents go to Obama, however, when asked about who would be better at protecting the middle class.
"So these poll results are clearly going to drive the messages of the campaigns," he said.
Brady concluded with a prediction that Obama would be re-elected, with the caveat that anything can change over the next several months.
"Whenever you give these talks," he said, "people want to know who is going to win."
Provided by Stanford University 
S.C. lawmakers repurpose money set aside for struggling homeowners - Anderson Independent-Mail
COLUMBIA, S.C. — South Carolina was given $31 million from a lawsuit settlement to help homeowners who can’t pay their mortgages, but the majority of lawmakers want to spend the cash elsewhere.
Among other things, the GOP-controlled Legislature wants to use the infusion to recruit new businesses.
The money in question is the state’s portion of a settlement involving five of the country’s largest loan providers to resolve state and federal investigations into illegal foreclosure practices.
Democrats in the state House and Senate have argued more of the cash should go to help the families who were hit hard in the foreclosure crisis.
“We’ve got their money, and we don’t want to return it back to them,” said Sen. John Scott, D-Columbia. “There’s something wrong with that kind of attitude when the rest of the time you say you want to give money back to the taxpayers.”
Republicans argue bringing new business to the Palmetto State will help those struggling to make house payments.
Anderson GOP Rep. Brian White, the chairman of the House Ways and Means Committee that designed the House budget, said the House didn’t neglect homeowners when it set aside the settlement money for business incentives.
“Our thought process was that the Commerce Department would be able to recruit and get people out working,” he said. “You get people employed, that’s a house payment and a paycheck.”
White said there are also lots of federal programs and agencies already assisting homeowners facing foreclosure.
The diversion of the funds is legal, the product of broad language in the $25 billion settlement that effectively gives states wide discretion to use the funds as they please.
More than a dozen states are diverting the money. But only a handful intend to spend essentially none of the funds for housing, according to a recent report by Enterprise Community Partners, a national group that advocates for affordable housing.
In its version of the budget, the S.C. House sent the bulk of the state’s settlement money to the Commerce Department’s Closing Fund, incentives used to entice companies to come to South Carolina.
The Senate’s budget that sits one vote away from approval moves $10 million from the settlement to the Commerce fund, but sets aside $5 million for the S.C. Housing Authority.
The agency would use the money primarily for legal services for families facing foreclosure and multifamily housing bonds.
The remaining balance of the settlement was put into the general fund in the Senate’s budget.
Sue Berkowitz, the director of the S.C. Appleseed Legal Justice Center, said the group was disappointed the House budget diverted all of the settlement money.
The center is asking senators to provide more of the settlement money to homeowners beyond the $5 million already in the budget.
“If you look at the intent of the mortgage settlement, the whole reason the lawsuit was initiated was because the banks were breaking the law and taking people’s homes,” she said.
While not reaching the highs experienced during the housing crisis four years ago, foreclosures are on the rise in the Lowcountry.
During the first three months of the year, the Charleston metro area’s home foreclosure rate jumped 8.5 percent from a year ago, according to online marketer RealtyTrac.
Language in the settlement gave state attorneys general, including S.C. Attorney General Alan Wilson, sole discretion over the $2.5 billion in direct payments to states included in the agreement.
Wilson wanted the money to be spent primarily on a consumer protection enforcement fund, a consumer education fund and consumer restitution.
Wilson however doesn’t control the state budget, and lawmakers didn’t go along with his plan.
According to Wilson’s office, the state received an additional approximately $16 million from the settlement beyond the $31 million in the form of direct reimbursements to borrowers.
That money will be doled out to people who have already had their homes foreclosed on.
Mahindra Finance to foray into insurance sector - zeenews.india.com
Amol Dethe Anand Mahindra owned Mahindra Finance could soon be making an entry into insurance business as well. According to sources, the non-banking finance company, Mahindra Finance is in talks with one of America's largest insurance company The Travelers Companies, for a partnership.
In the partnership for general insurance which includes health, motor and other general insurance policies, Mahindra intends to hold 74 percent, while Travelers could stick to 26 percent, which is the highest limit for foreign investors in the insurance sector. When contacted, neither of them wanted to comment on the story, but sources said that the deal might close in another 90 days.
Mahindra Finance currently holds a broking license for insurance. The company's experience in agricultural and rural finance apart from car loan financing, in addition to its presence in the insurance sector as a broker, is known to have prompted the company to enter the sector.
The parent company, Mahindra & Mahindra's presence across the automobile sector will also help the company sell motor insurance, which is the largest segment in general insurance.
Travelers Companies is a New York Stock Exchange listed company, which provides insurance for auto, home and business. The company generated revenues of approximately USD 25 billion in 2011, according to information provided on its website.
The company has operations across Canada, UK, Ireland and Brazil. It had been trying to enter India for a very longtime and had even held talks with construction major L&T three years back. L&T had later decided to venture into general insurance business all by itself.
India has 25 general insurance companies with low penetration in the Indian market; which is less than one percent, offering an opportunity for foreign companies to enter the sector.
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