NXD Meeting Minute
Minute of the third meeting of the Q & B Non-Executive Directors network held at Woodbrooke on 25-26 May 2010.
25 of us met to consider the subject of “giving value to money”. Five who had attended in previous years were prevented.
In the evening of 25th May we heard Charles Middleton, the Managing Director of Triodos Bank, talk about the bank, its origins, approach, achievements and vision for the future and how it is seeking out, and investing in, businesses with social, environmental and cultural value.
On the morning of 26th May, John Meadley set the scene with reference to Alistair McIntosh’s three pillars of community finance – mutuality, reciprocity and barter – and the advantages and disadvantages of cash as an entity, then reminding us of some of the successful social enterprises that already exist (such as the John Lewis Partnership and Scott Bader) before sharing with us his own experience of financing enterprise in the developing world and reminding us of the need to mainstream new approaches to financing.
Ian Rothwell told us about the operations of Industrial Cooperative Finance (ICOF) in financing cooperatives and employee buyouts, often co-financing with other socially-oriented financial institutions such as Triodos Bank and the Plunkett Foundation. Currently having assets of £4 million, we noted the opportunity for increasing the amount of funds available for lending.
Jonathan Jenkins told us about his work as Director of Ventures at UnLtd, an organisation that provides grants (from £5,000 - £20,000) to individuals who are starting social enterprises and also mentors them as they seek to raise the next stage of funding – highlighting the funding gap that exists in the range of £20,000 - £230,000, the point at which institutions such as Triodos would engage.
Richard Spencer told us about the work of the Finance Lab, a partnership started by the ICAEW and the World Wildlife Fund in responding to the failure of the current market-based financial system and its dependence upon consumption; acting as a centre of gravity within which people can seek how to create a financial system that reflects the needs of society and of the environment. Over 700 people are now participating through an online forum. We are encouraged to join and participate in the lab at www.thefinancelab.ning.com
Peter Lang first told us about his job as a trustee of the London Pension Fund Authority, appointed by the mayor of London to focus on environmental issues, who explained what he had been able to achieve as a board member that would not have been possible as an external environmental campaigner. He then told us about Riversimple, which is designing a revolutionary new car that uses electric motors powered by hydrogen, with open source design (like Linux) with cars being leased rather than owned and continuously updated as improvements emerge. He finally told us about Greens on Board and the difficulties faced in generating interest on company boards.
We noted that:
· many of the current innovative forms of financing are small in size, which allows flexibility to responding to need and opportunity, but whose wider impact may be limited unless larger institutions build on the lessons learnt. There is a ‘funding gap’ between £20-250,000 which is troublesome for social enterprises, and which institutional providers have been unable to cost-effectively service.
· Changing the approach or behaviour of a large financial institution could have significantly greater impact than the sum of the effect of smaller ethical financial institutions. Those operating at the thin end of the ethical bell curve can provide the experience and lessons for adoption by mainstream financial institutions.
· Whilst regulation can provide protection, the risk is that it becomes a tick-box exercise that is a burden to business and discourages innovation and enterprise.
· There are many innovative approaches to financing the sustainable development of businesses that involve thinking outside the box (we heard examples from John Meadley of creative approaches from his work in Africa in water and sanitation provision)
· There is an opportunity for area meetings to use some of their funds to proactively invest in local social businesses
· There is a need and an opportunity for the mapping of funds available for social enterprise, building on the research already done by Venturesome (see http://www.cafonline.org/default.aspx?page=18936 ).
· We identified a possible opportunity to establish a ‘Quaker Bank’ that recognises that competent banking depends upon building relations that require local knowledge; such an institution could act as a channel for Quaker funds to meet the needs of businesses that adhere to Quaker business principles. Further this organisation could look closely at what it would take to fill the funding gap that has been identified.
· Other practical actions QandB could take included:
o A new page on the website that identifies sources of funding for business.
o A media centre feature in Q&B site, with info readily available for journalists
o A champion(s) / voice of ethical finance identified within the group
· We ask the management committee to establish a Finance working group to take forward the ideas of the ‘Quaker Bank’ and other ideas that have come forward.
· We separate, looking forward to next year’s meeting schedule for the 6th -7th June 2011, at Woodbrooke.