What's the worth of a prize with a price tag?

19:55, Jun 03 2014

If Chalkie invited the Queen to lunch, and she accepted, Her Royal Highness would receive a meal of dubious quality in surroundings likely to make her feel she needn't have worn the diamonds.

Your correspondent, on the other hand, would receive the honour of a tete-a-tete with the world's 35th most powerful woman and 15 minutes of fame.

Clearly the benefit of the exchange would accrue overwhelmingly to the inviter, not the invitee.

It can be the same with awards, which are popular in all fields including financial services.

Generally an award involves an exchange of prestige in which the person receiving the award gets the lion's share of the glory.

But there is a two-way street - the presence of honourable winners reflects honour back upon the award.


Novelist Edward St Aubyn has remarked on the phenomenon, having been shortlisted for the Premio Gregor von Rezzori literary prize in Florence this year.

Unfortunately he couldn't go to the award ceremony this month so the judges took him off the shortlist.

"It's a looking glass world these days," he said. "Now it's about books promoting the prize rather than prizes promoting books."

Chalkie mentions this because awards in the financial sector appear to be proliferating, and some seem likely to benefit the prize giver more than the prize winner.

Among several examples drawn to Chalkie's attention by market sources, some themes emerge.

There is a cold-call approach or an unsolicited email saying something like: "Your highly esteemed firm has been shortlisted for our prestigious international awards. Please fill in the questionnaire to provide information for our judges to make their final selection."

There may be an online voting system, where candidates can vote for themselves.

Then there may be another call or email: "Good news, you have been selected as a winner. To claim your prize, please indicate which of our marketing packages you would like to buy."

Cynical readers may find their antennae starting to twitch at this point. So there's a prize, but you have to pay?

They might also think if that really was the deal, surely no savvy financial institution would go for it.

Chalkie is not sure at all.

One example of an outfit touting its awards in these parts is publisher World News Media.

This London-registered company produces a publication called World Finance and seems to have done so since 2004. There is a bi-monthly magazine available for free online and a website carrying a range of articles on weighty topics.

The package looks elegant, although like many media outlets it leans on non-exclusive articles provided by agencies. For example, one article by economist Joseph Stiglitz posted on World Finance's website in October last year was written in May 2008 and distributed by Project Syndicate.

Chalkie's research at the UK Companies House found that World News Media was entitled to deliver abbreviated accounts because its turnover was no more than £5.6 million (NZ$11m), total assets were no more than £2.8m or its staff numbers were no more than 50. As of August 2013 it had net assets of £635,080.

A decent business then, but not huge.

However, as well as presenting neat, sober and deferential corporate commentary, World Finance runs a whole bunch of awards. Last year it handed out gongs in 16 categories - banking, construction, corporate governance, investment and development, pension funds, hedge funds, infrastructure investment, insurance, investment management, Islamic finance, law, oil and gas, project finance, public private partnerships, technology and, phew, telecoms.

That's a lot of judging.

A financial professional of Chalkie's acquaintance was cold-called about World Finance's awards last year but declined to take part. This year he thought he'd have some fun by voting for himself and lo, was informed last month that his firm had received a "substantially high number of votes" and reached the final.

"One vote buys a lot of love," he said.

The process then goes to a judging panel, who World Finance says has "over 230 years of financial and business journalism, supported by a research team that works round the clock to ensure our award winners are the most deserving in their sector".

Exactly who is on this panel is unclear.

The next stage is that finalists are invited to go to London for a presentation and to take part in a marketing opportunity. This involves a "digital TV showcase" featuring a 20-minute interview videoed at the London Stock Exchange studios, edited down to six minutes, plus a "thought leadership" article highlighting the winner's expertise and general wonderfulness, and an A4 "colour profile".

The normal commercial rate for this package is apparently £40,000-£45,000, but winners qualify for a special reduced rate of £15,000.

The World Finance rep told our eager applicant that if he was chosen as winner, "I will formally confirm, and include standard confirmation of order to reserve a winner's media package'.'

Chalkie is on the edge of his seat. Winners will apparently be announced in the July-August issue.

There will be a lot of winners. Each award category has a winner for each country represented and in one single category there were 69 winners from countries including Angola to Vietnam and Pakistan to Peru.

In the banking category there were more than 200 winners.

And if these are just the winners, by implication the nominations for that many categories must run to thousands.

Faced with such a blizzard of excellence Chalkie has to wonder about the ability of any judging panel - even one with 230 years' experience - to evaluate that amount of information between now and the Second Coming.

As a result, Chalkie reckons these awards are probably about as valuable as a degree in earwax extraction from the University of Wobegon, where everybody is above average.

It is therefore surprising to see a couple of highly respectable New Zealand firms promoting their 2013 winner's gongs from World Finance on their websites, along with video interviews from London Stock Exchange studios.

Both firms - First NZ Capital and Harbour Asset Management - are scarcely in need of endorsement from a small outfit like World Finance. Indeed, both are packed to the gills with experts of high pedigree and are deservedly in the top echelon of the local industry.

The question is, should they be advertising an award win of doubtful provenance?

Granted, others may not share Chalkie's opinion of World Finance's awards, but there is also a more general issue here.

There are numerous publications marketing award schemes to businesses - other examples crossing Chalkie's desk in recent months include International Finance, Wealth and Finance International and Acquisition International - and it's not always clear that the awards are meritorious.

It's probably about time the financial services industry thrashed out some standards on when an award becomes credible enough to use in advertising.

Chalkie is written by Tim Hunter, deputy editor of the Fairfax Business Bureau.