24 June 2016 by Henry Ker
The latest governance stories in the news
The ‘ideal charity’, as perceived by the public, would spend 14% on each of campaigning for change, fundraising costs and running costs, according to new research. The remaining 58% should be spent on the charities beneficiaries.
The report by nfpSynergy examines the public’s views on charities. As well as perceptions of charities spending habits, the report also looks at the importance of CEO pay and perceptions about what activities count as ‘charitable’.
Nearly 70% of the public see the CEO as an administration cost for a charity and ‘CEO pay’ is viewed as the second most important factor (31%) on deciding which charity to donate to, after the number of beneficiaries (34%).
The view that 14% of spending should be used for campaigning for change is interesting given the recent anti-advocacy clause proposed by the government which could inhibit some aspects of this (i.e. charities receiving government grants being prohibited from activity intended to influence Parliament, government or political parties). Read Charity Finance’s analysis on the anti-advocacy clause, ‘Silent witnesses’, for more on this.
Merrill Lynch will have to pay $415 million for misusing customer cash to free up money for its own trading activities, according to the Securities and Exchange Commission (SEC).
The SEC investigation found the company used money that should have been held in reserve accounts to finance trading activities. As much as $58 billion a day was potentially being risked, without adequate safeguards. The actions violate the SEC's Customer Protection Rule.
Andrew Ceresney, director of the SEC's Division of Enforcement, said ‘The rules concerning the safety of customer cash and securities are fundamental protections for investors and impose lines that simply can never be crossed. Merrill Lynch violated these rules, including during the heart of the financial crisis, and the significant relief imposed today reflects the severity of its failures.’
Bank of America released a statement saying ‘Our responsibility is to protect customer assets and we have dedicated significant resources to reviewing and enhancing our processes. The issues related to our procedures and controls have been corrected.’
The Competition and Markets Authority has proposed 30 new measures for energy firms. The move is designed to increase competition in the marketplace and help customers get a better deal on energy bills. CMA research revealed that customers are currently paying £1.4 billion more than they would be in a fully competitive market.
The proposal represents the end of a two-year investigation into the energy sector and whether the ‘big six’ suppliers have been overcharging customers.