Is Capitalism fit for the 21st century? How cash flow can deliver sustainable pension schemes by utilising a strategy that ensures a financial supply chain is ethical.

1. “Capitalism: the conflict
between performing today and
investing for tomorrow”
6 November 2014
Brighton University

2. Capitalism
Is Capitalism ‘fit for purpose’ in the 21st Century?
Mary Poppins to Wall St. via Main St.
Mark Carney’s speech at Commonwealth Games
in Glasgow 2014 (social capitalism)
CSFI (Centre for the Study of Financial
Innovation) http://www.csfi.org/
McKinsey, HBR, Economist Intelligence Unit

3. Disruptive Innovation to the financial system
Traditional banking model for businesses under
threat from alternative finance providers
Reputation- PPI, LIBOR, Cooperative Bank
Disruption brought about by regulation
re Basel III, IFRS, FCA etc
Capital Adequacy Stress tests: 1 in 5 ECB Banks
tested failed - Lloyds closes branches
Credit agencies in disarray

4. Financial Supply Chain?
– Suppliers - the supply chain
– Customers – the demand chain
– Investors – the financing chain
– Inventory – the stock, work in progress chain
– CAPEX – the investment chain
Each chain is interdependent on the other thus
long term sustainable growth is required.

5. Reporting in the Financial Supply Chain
• Conflict in types of Reporting re GAAP, IFRS
Integrated and the IMS, annual report.
• Is ‘strategic’ narrative truly reflecting the
Financial Supply Chain?
– Tesco £250m profit warning: SFO and
“reliable financial statements”
– Sales overstated?
– Commercial Contracts valuation?
– Impact of share price halving in 12 months re
Pension Funds and pensioners?

6. Reporting via annual report/Interim
management statements
KPI’s linked to the statements on strategy
ITV PLC is an excellent example
Narrative in annual and IMS to:
‘manage investors/stakeholders expectations’
Incentive/Bonus schemes
CSR
Pension fund deficits – drain on cash- DHL

7. A Narrative that supports evolutionary
Capitalism
A need for sustainable LONG TERM investment
Empowering investors/savers to generate returns
on guaranteed deposit/savings
Pension Funds and Pensioners?
• Chancellor Osborne
• Funding Infrastructure Projects
• Investing in climate change technologies UN
report published 2nd Nov. 2014

8. Stakeholders decisions driven by
Superfiduciaries
Pension Plan managed by fiduciary
intermediaries
Individuals as shareholders and employees
Warren Buffet views cash flows as being the
‘lifeblood of the organisation………’

9. Stakeholders decisions driven by
Superfiduciaries
Enterprise investment via Board decisions
‘active investors’
dividends to shareholders
capex
M & A
divestment
and suppliers and customers re brand impact

10. Ethical thinking and Technology is shaping
the future of Capitalism
• Ethical
Many business models now focus purely on
generation of cash, eg Siemens, VW, with no
reliance on banks
• Technology
Paypal, Microsoft, e-Bay , Apple

11. Rethinking Economics
• The market is ahead of the regulators
• Investment chain is generating a supply chain that
includes ‘challenger’ banks Aldermore, Virgin etc.
• Shareholders, customers, suppliers demanding
ethical standards
• Banks are now losing ground

12. Rethinking Economics
• Economic Supply and Demand chain that is
ethical and has confidence in the Financial
Supply Chain
• Fiduciary Capitalism?
“Showing confidence or reliance, depending
upon public confidence”

13. Questions, thoughts please
Thank you for attending
Please have a safe journey home
johnmardle@cashperform.com
www.cashperform.com
0795 756 7053