Profile: UBS Warburg – hitting on a winning investment

Look at the majority of investment bankers’ college CVs and you are more likely than not to find them littered with sporting laurels of one kind or another.

Indeed, it is no surprise that the investment banking industry attracts people with a sporting profile. Competition, ambition, dedication and teamwork are the lifeblood of banking, just as they are of any successful sports team. Yet, by the same token, just as a new team takes a while to settle, so too do businesses need time to orientate themselves as mergers and acquisitions work themselves out. While a club’s colours readily help sports’ players identify themselves with their new team, what is it that glues employees together? UBS Warburg’s experience over the last three years shows how community affairs can form an integral part of a company’s ‘team strip’.

Business basics

UBS Warburg is one of four business groups which form the investment services firm, UBS AG. Together with UBS Switzerland, UBS Asset Management and UBS PaineWebber, the Group is a significant player in every major area of banking services. UBS was created out of the 1998 merger between Swiss Banking Corporation and Union Bank of Switzerland. UBS Warburg is the investment banking and securities arm of the business.

Like many of its City rivals, UBS Warburg’s London headquarters are only a stone’s throw away from the capital’s east end, one of the country’s most deprived urban areas. With pre-tax profits of 62.7 billion in 2000, how the bank works out its pledge to be a good corporate citizen in practice is a particularly relevant question.

Management

UBS governs its social responsibilities at group level through the Corporate Responsibility Group, where community affairs sits alongside other policy issues such as corporate governance, ethical principles and the environment. By establishing policy centrally, UBS ensures that all the business groups operate according to a common set of values and principles in all their activities – be they related to CSR activities in particular, such as helping to formulate the Wolfsberg Principles on money laundering or reporting on the environment, or simply influencing the daily business conduct and decisions of its 71,000 employees.

UBS Warburg manages the community affairs aspect of its corporate responsibility through three principle charity committees. The main committee, which allocates resources and general themes for the group’s community programmes, boasts representatives from the senior management of all the bank’s divisions. The two subsidiary committees are responsible for selecting and managing relationships with community partners at international and UK levels respectively.

In the UK, responsibility for implementing the bank’s programme falls to Nick Wright and his colleagues, Patsy Francis and Fiona Courtenay- Evans.

Strategy

Nick assumed responsibility for the team in 1998 after 12 years on the trading floor, specialising in derivatives trading. Taking up the post at the time of the UBS/SBC merger, Nick notes that the existing synergies between the two organisations made creating a coordinated community affairs programme simpler. Over ten years ago, for example, SBC committed itself to a number of enterprise initiatives following a Seeing is Believing event in several east end boroughs. As well as concentrating on the economic regeneration of these areas, both banks were also investing considerable time and resources into education in the area.

UBS Warburg’s decision to maintain a focus on these twin themes after the merger ensured a continuity of support for the east London community. It also provided an identifiable common link between SBC and UBS and the newlyformed UBS Warburg.

Community Involvement

Engaging its employees to involve themselves in the community is a logical step for an investment bank such as UBS Warburg, for whom the combined intellectual capital of its 6,200 staff in London is its most valuable asset. As such, the bank actively encourages its employees to volunteer with community organisations. As a way of facilitating this, each employee can take two days a year to undertake volunteering activities.

As well as doing so via the usual ménage of internal communications’ tools, the community affairs team held a charity fair to promote the activities of its community partners last year. While jugglers from the charity Circus Space joined other charity representatives in the office foyer to show off their skills, employees were presented with information packs identifying how they could get more involved. The results were impressive. During 2000/2001, more than one in seven (15%) UBS Warburg employees took up the opportunity to volunteer, double the number on the previous year.

The case for volunteering is underpinned throughout by the business benefits that community involvement brings. As such, every attempt is made to match the needs of the community organisation with the needs of the individual volunteer. This portfolio approach gives the bank the capability to find appropriate opportunities for traders, administrative staff and corporate financiers, for example – all of whom have very different skill sets and work patterns. Perhaps the best example of a community initiative that appealed both to the bank’s core business activities and the capabilities of its staff was the recent Crisis Investment Race (see Briefing 55). The initiative sought to harness the competitive spirit of the City by providing nine investment institutions with a loan of £50,000 each and challenging them to invest it over a 12-month period, with the returns going to Crisis, the UK charity for homeless people. Linking employee community engagement to employee development and satisfaction is particularly important at a time of contraction and competition. The 1998 merger provides a prime example. Commenting on the merger process back in 1998, UBS’ chairman Marcel Ospel admits that, “the job satisfaction levels of our staff . . . sunk very low at times”. Yet feedback from employee volunteers finds that the experience not only helped them develop key competencies such as their communication skills and teamworking abilities, but also had a marked impact on their morale, motivation and selfesteem.

Regeneration

So what is it UBS Warburg volunteers actually do? For example, UBS Warburg is a longtime partner of the East London Business Alliance, which it helped cofound in 1989. ELBA helps foster regeneration projects through voluntary, public and private sector partnerships primarily in the London boroughs of Hackney, Newham and Tower Hamlets. It is through this alliance that the bank provides volunteers to act as mentors in East London charitable projects and schools. In the case of Hackney Business Venture, the bank operates an enterprise fund to provide capital to the small and medium sized businesses – a vital aspect of the business support services that the non-profit HBV provides.

Education

As well as supporting a range of education initiatives through cash grants, UBS Warburg enjoys a close ongoing relationship with two particular schools in its local community – Deptford Green School and Homerton College of Technology. The bank sponsors adult-to-pupil mentoring programmes in both schools, to which volunteers give about an hour and a half every fortnight. Working mostly with Year 10 group, mentoring helps students bring balance into their lives during their first year of GCSE studies. Research has shown that nearly twothirds (59%) of students in the mentoring programmes get better grades and about three-quarters (73%) raise their aspirations. As part of its ongoing partnership with the schools, UBS Warburg also helped Homerton College achieve its status as a specialist technology college. The bank is currently working with Deptford Green school to design and integrate a citizenship programme as a key feature of the school’s curriculum. The school now has a citizenship committee, on which the head of global human resources for UBS Warburg presently sits.

UBS Warburg also offers work experience opportunities to students from low-income communities. It also runs a number of workplace visits and campus presentations aimed at encouraging students – especially women undergraduates and students from minority ethnic communities – to consider finance jobs.

Giving

In addition to its long history of volunteering, UBS Warburg runs a match-giving programme, which it administers through the Charities Aid Foundation. The bank pledges to match employee donations up to £1,200 per annum. The scheme has enjoyed an increase in take-up of almost a third over the last three years. The bank also offers to help employees establish and manage their own Charitable Trusts. Selling the benefits of the government’s recent changes in the law that make payroll giving more tax-efficient is one of the team’s easier tasks. “Present the maths and bankers more than anyone can see when they’re onto a good deal”, says Nick.

UBS’s worldwide contribution to the community totals several million pounds a year, with the programme split between matched giving, grants and employee time. In addition, UBS Warburg has a major arts sponsorship programme, including a £3.5 million partnership with the London Symphony Orchestra for the new St Luke’s Music Centre.

Successes

UBS Warburg was a second-time winner at the Lord Mayor’s Dragon Awards in 2000, testifying to the commitment of the bank to its community involvement activities at a time when it was still determining its new identity as a merged company.

The role that community affairs can play in defining and demonstrating the values of any company, Nick believes, goes a long way to explain the team’s success in winning senior level buy-in to the programme. In an industry continually in the throws of the “war for talent”, the issue of corporate purpose and principles is ever important. To quote Marcel Ospel once again: “talented individuals will not want to work for us unless they identify fully with our corporate culture”. Although difficult to prove empirically, anecdotal evidence indicates that the bank’s community affairs programme – and particularly employee community involvement – has provided a number of the bricks to help construct that corporate culture over the last three years. Winning a budget increase this year indicates that the bank’s senior management agrees.

Future?

Continuing to link the community activities in with the other UBS business groups is an obvious challenge. Dovetailing its community programmes in with other UBS companies in London is something UBS Warburg is already doing, but aims to improve in the future. It is also looking to extend its programme to include those it employs on a subcontractor basis; cleaners, caterers, security staff etc. Running a regular annual charity dinner for all its suppliers in support of the bank’s charities is one example of how this may develop.

Looking for internal synergies between the different functions of the Group is another role that Nick and his team hope to develop in the near future. Advising UBS fund managers on SRI-related issues, for example, or working with the bank’s private client divisions to design effective investment packages for wealthy philanthropists, are other potential avenues.

Certainly the foundations are in place to make the bank a significant community player. But UBS Warburg finds itself in a competitive league. Against it stand some formidable opponents; potential recession, a sceptical public, an intrusive media, active shareholders, a readily-mobile labour pool. While community affairs can kit the bank out to face these challenges, the odds will depend on whether all the business divisions choose to buy the strip and wear it. Only time will tell, but current form makes it definitely worth a flutter.