There’s something to be said for keeping a low profile. For the past 30 years, The Hundred Group — an informal club of CFOs hailing primarily from the 100 largest listed companies in the U.K. — has been quietly making its mark on national business issues, eschewing the glare of the public limelight in favor of low-key tête-à-têtes with politicians and other policy makers. While there are no signs of radical changes in this approach under the watch of its new leader, Philip Broadley, expect to see its influence spread to broader, EU-wide issues. Here, Broadley, whose day job is being the group finance director of insurer Prudential, speaks about The Hundred Group’s current list of priorities, which includes raising its profile in Brussels and beyond.
Your two-year stint as head of The Hundred Group began last November. What’s on your agenda?
You’ll find two of the issues were on my predecessor’s agenda two years ago — accounting and tax. The accounting has moved on a bit, but tax is always with us. What has come on to the agenda is pensions. What has come off is governance. Within that period, the U.K. governance frameworks have been settled, and now we’re living with those.
As for pensions, managing defined benefits pension schemes is clearly a Europe-wide issue, but here in the U.K., we’re also focusing on the fact that since a year ago, we’ve had a new national pensions regulator in place, which will expect to be a party to corporate negotiations in some cases. This is quite groundbreaking. Under this approach, an acquiring company may now not only need competition clearances from regulators, but also have to discuss with the pensions regulator what its plans will be to deal with the solvency of the pension scheme of the business it wants to acquire.
Is this a good development?
It’s an understandable development. It recognizes the pension scheme as a creditor. That’s a big difference from transactions in the past, when an acquiring company would have been thinking about its shareholders and its debt holders. And while those groups might have had a say in the transaction, the pension scheme did not necessarily.
But there’s still a learning process. For example, we need to define under which circumstances the regulator expects to be involved, and the timing of that involvement. The Hundred Group has already started a dialogue with the regulator, and we’re meeting again in July. They recognize that much of the risk for their agenda is concentrated in the larger schemes, in terms of members. Being from companies running those schemes, The Hundred Group is a natural constituency to meet with.
As you mentioned, tax continues to be on The Hundred Group agenda. In April, a survey conducted by PricewaterhouseCoopers showed that while your members paid a total of £9 billion (€13 billion) in corporate tax for 2004/05, the total business tax contribution was an estimated £18 billion. Did this finding surprise you?
Was I surprised by the absolute level of tax paid? Not particularly. But I was not aware that the total tax contribution paid by large U.K. companies was twice the corporation tax.