Weekly Blog by Philip King, CEO of the ICM - 'Tangible examples of best practice'

One of my most enjoyable tasks is presenting the ICM's Quality in Credit Management Award to companies that have achieved the challenging accreditation. And it is happening with increasing regularity: we now have 29 accredited organisations and many more underway. This week I was privileged to present the award to the team at Venn Group in London.

Every organisation I visit is a demonstration of best practice but one thing in particular stood out for me at Venn Group: the way in which credit management practice and principles are integrated into the entire business. At the presentation of the award, the owners of the business and directors from every function were present and it was apparent that credit management isn't just a function within the business. Rather, cashflow is recognised as vital and every activity across the organisation from those who acquire business onwards recognises the importance of contributing to its management and control. I often talk about the importance of credit management sitting at the heart of the business and it's great to see a tangible example of it in practice.

 

On Monday, I presented at the launch of the ICM's partnership with Bank of America. The partnership is ground-breaking in the way it has been created. It will deliver an opportunity for all members of the Credit Risk Management team to develop skills, gain qualifications, and contribute to the validation of the quality of its operation. The excitement, passion and commitment of the team in Chester was fantastic to see and truly inspirational.

 

It's been another great week and I'm trying hard to forget the fact that I had to decline an invitation to Buckingham Palace on Monday for an event hosted by the Duke of York to launch the Start-Up Loans Company Ambassadors Scheme!

Weekly Blog by Philip King, CEO of the ICM -'Directors must take responsibility for their actions'

I received the report from the House of Commons Business, Innovation and Skills Committee on The Insolvency Service (Sixth Report of Session 2012/2013) recently. In more everyday parlance, this was the report from the Select Committee that met last October and heard evidence from the Insolvency Service, R3, the Insolvency Regulatory Bodies and others. One of the comments in our submission has been somewhat over-stated,  and our words used out of context, but I am particularly pleased at the inclusion of another reference which says: 'The Institute of Credit Management summarised the concerns of many of those who submitted evidence to us when they commented: "We would be greatly concerned if the reductions in budget [of the Insolvency Service] resulted in a degradation or reduction of Disqualification Unit activity. We believe any such dilution of activity would send entirely the wrong message to delinquent directors at a time when corporate insolvencies are likely to increase".'

 

In connection with the disqualification of directors, the report points out that 'disqualifications have halved over the last couple of years………whilst the number of directors disqualified each year has remained relatively stable over the past decade (approximately 1,200 a year), the number of cases of misconduct identified by Insolvency Practitioners in the same period has risen from 3,539 to 5,401…..the disqualification rate has fallen from 45% in 2002-03 to just 21% in 2011-12.'

 

It is widely accepted that the UK is one of the easiest countries in which to start a business, and that's good, but business owners need to show some responsibility in return for the 'veil of incorporation' which limited company status affords them. If a company can be formed with £1 issued capital and the directors have no personal liability, there have to be consequences if they are found to be guilty of misconduct that leaves their creditors out of pocket. Insolvency Practitioners are required to submit a return identifying where they believe misconduct to have occurred and they have the right to expect their report to be acted upon. Currently only 20% of reports are taken forward to disqualification and that's not good enough so I'm delighted that the Report recommends 'that the Department provides the Insolvency Service with sufficient, and if necessary, additional funding to disqualify or sanction all directors who have been found guilty of misconduct.'

 

Let's encourage entrepreneurship and initiative but let's not turn a blind eye on sharp practice that leaves suppliers with bad debts and impacts negatively on their business and the wider economy. I happen to believe there should be a minimum amount of issued capital required to form a limited company so that directors and business owners take their responsibility more seriously but I'll save that argument for another day. In the meantime, let's hope the Select Committee's recommendation is fulfilled. It definitely needs to be.

Weekly Blog by Philip King, CEO of the ICM - 'That was the week that was!'

Firstly, we had the ICM British Credit Awards at the Park Lane, London Hilton on Wednesday last and, from all the feedback I've received so far, it was our best awards event yet, and one of the best the industry has ever seen. Over and above the joy of celebrating with all those who were short-listed for awards, and particularly with the winners, the evening was a triumph with exceptional entertainment from The Three Waiters, and superb hosting by Martin Bayfield. It was great to spend a night in the company of colleagues from across the industry and a reminder of what organisations like the ICM do so well.

 

Secondly, on Thursday, Michael Gove - the Education Minister - announced that the new draft National Curriculum for England will see financial education embedded in both mathematics and in citizenship education, making financial capability a statutory part of the curriculum for the first time ever.

 

Specifically, the new programme of study for Citizenship includes the functions and uses of money, the importance of personal budgeting, money management and a range of financial products and services in Key Stage 3, and wages, taxes, credit, debt, financial risk and a range of more sophisticated financial products and services in Key Stage 4.

 

This announcement follows a prolonged pfeg (Personal Finance Education Group) campaign supported by the All Parliamentary Group on Financial Education (chaired by my local MP, Justin Tomlinson) and by hundreds of MPs, teachers, parents, and professional bodies including the ICM. It is a triumph for pfeg which coincidentally was the chosen charity for our Awards Dinner and will benefit from the many financial pledges made on the night in its mission to support education providers in giving children and young people the skills, knowledge and confidence to manage money.

 

As I write these words, more pledge cards are still being received so we do not have a final figure of commitments made but, from our work with pfeg in recent years, I am confident that it will all be put to good use and will help to ensure that the next generation is better equipped to deal with personal finance and debt than the current generation.

 

On that subject, the ICM Think Tank this week focused on the role of the advice sector, and particularly the work of StepChange Debt Charity that has been helping people break free from problem debt for 20 years. It was useful for the group of senior executives from across the credit industry to learn more about the charity's mission and work, and to discuss the role of the advice sector and its relationships with the creditor community.

 

Finally, it was good to see the publication by the Insolvency Service of its Debt Management Plan Protocol which aims to protect and promote the needs and best interests of consumers who take out DMPs. In particular, it should help to ensure there is a greater level of consistency and transparency and weed out some of the unscrupulous operators who are conspiring to give the sector a bad name.

 

All in all a good week then!

 

Weekly Blog by Philip King, CEO of the ICM - 'Celebrating success'

I'm writing these words ahead of the ICM British Credit awards which are taking place at the Hilton, Park Lane. A night of celebration, networking and fun with about 400 people, many of whom will be hoping that their entry to the Awards has done enough to earn them success. They should all however recognise the achievement of being short-listed - there may only be one trophy but they're all winners!

The success of the Awards has made me reflect on the power of social media. When we held our last Awards Dinner in February 2011, I think I'd just started Tweeting and I was certainly a novice. Since that time, Twitter has emerged as a powerful source and - in many respects - an effective tool. I'm an avid personal user (@philipkingicm) of Twitter but the ICM's corporate social media activity (@icmorg) is driven by my long-suffering Executive Assistant, Tracy Carter (@tracycarter) and she ensures that our activity is as effective as possible, constantly watching for new developments such as pinterest which we'll be using to post pictures from the Awards Dinner at the event and afterwards (http://pinterest.com/icmorg/icm-credit-awards-2013/).

Whether you're a user of social media or not, and whether you believe it has a place or not, there can be no doubt that it is having a major impact. I've just finished listening to Nick Robinson's book 'Live from Downing Street' and he makes the point that phenomena like Twitter mean that politicians and broadcasters are no longer able to control the timing of news being released in the way they were able to just a few years ago. 

The last few days has seen frenetic activity on Twitter and LinkedIn as we count down to our Awards evening, and hundreds of conversations and exchanges have taken place that would never have happened without Twitter. Real conversations are still the best form of communication but let's not knock anything that complements them and allows for networking and communication that otherwise wouldn't exist at all.