Sunday, May 17, 2009

Tortoises and hares: public sector pay and pensions in the news

Yesterday several newspapers carried articles about a PricewaterhouseCoopers study of relative pay and pensions in the public and private sector. The good or bad news – depending where you sit – is that public sector pensions are shifting balance of advantages towards he public sector.

The PWC study assumed the private sector Hare and the public sector Tortoise both started work in 1981 at age 21. The Hare earned and spent more up to the stock market peak in 2007. Thereafter, a more broken employment history and a much less secure and generous private pension meant that the Hare ends up losing. The accumulated non-pension wealth of the Tortoise is higher from around age 55 and, by the time both die at age 80 in 2040, the Tortoise has accumulated non-pension wealth of around 30% more than the Hare to pass on to his descendants.

We can all query some of the assumptions but the delicate issue of public sector pay remains.

I would be interested in the relative positions of the Tortoise and Hare’s female equivalents. When the affordability of public sector pensions is queried, the unions (quite legitimately defending their members’ perks) point out that many public sector pensions are looking forward to “tinfoil” pensions rather than “gold-plated”. The reasons for the small size of pensions reflects the structure of public sector pensions – with their final salary basis which favours full-time career civil servants rather than those female members who are often part-time and passing through the public sector. It would be good to see the unions promoting the interests of their female works in the debate about the fairness and affordability of public sector pensions.

Friday, May 15, 2009

Charities harnessing the power of the internet?

The research consultancy nfpSynergy have issued the results of its Virtual Power survey on The power of the internet for charities. (The report can be downloaded if you register.) the report has some interesting figures although I hope some analysis is to follow as 345 pages is a lot to go through.

Some figures do stand out. It was perhaps surprising to read that 48% of charities are now using social networking sites. (I do wonder how many public sector organisations do likewise.) Less surprising is that only 28% bother to blog.

Strangely the latest survey shows fewer organisations look at the possibility of SMS and mobile telephony as a communication tool. Similarly fewer are using these tools. I do wonder if the mix of respondents may have changed in the recent surveys.

Only a quarter of respondents agree with the statement: “My charity is making the most of the internet".

Only 23% of charities agree with the statement: "Our trustees are involved with our internet strategy". (That may be due to a lack of such a strategy!) Meanwhile 32% of the respondents agree either strongly or slightly that "Our internet strategy is ratified and approved at Board level". That sounds like a rubber stamp being applied – uninvolved approval!

I’d recommend charities (and others) have a look at the survey. The questions – even more than the answers - should get you thinking.

Friday, May 08, 2009

Thought for the day: finance and strategy

Many members of the boards of not-for-profit organisations seem to turn off when finance is mentioned. I can remember doing governor training at a college when a governor arrived late and said: “Oh, it’s finance training? If I’d known I would not have turned up”.

I have come across some wise words from Emmanual Faber (CFO at Danone) who noted:

Finance without strategy is just numbers, and strategy without finance is just dreaming.

Friday, May 01, 2009

Church told to practice good risk management

Following a large financial shortfall left after last year’s Lambeth Conference of bishops, a review was commissioned into the financial management of the Conference. The report published last week found control was insufficiently robust given the risks involved in such a major event.

The report includes the commandment:

overall governance arrangements need to ensure that challenges can be identified, options offered for their resolution, and solutions agreed by the appropriate parties and then implemented in a timely manner.

The FT on the Hiddink Effect and “the lasting appeal of interims”

My enthusiasm for football is fairly limited but I was interested to read Stefan Stern’s article on the FT blog about Guus Hiddink, Chelsea’s interim manager. (My interest may have something to do with working as an interim Finance Director with several organisaions over the years – and I am available for hire very soon!).

According to Stefan Stern, Hiddink’s performance in turning around Chelsea is typical:

This is what the best interim managers can do. They go in to a difficult situation, inheriting problems that have been created or left unsolved by previous managers. They bring a fresh perspective. They rejuvenate tired and stale employees. And then they clear off.

The fact that so many organisations in all parts of the economy are being convulsed by the recession and need support suggests that demand for interim managers will continue its recent growth trend.