New Team Dedicated to Productivity Full-Time

Bill Morrison, Northern Trust president and chief operating officer, announced on March 15 the formation of a new team devoted full-time to our ongoing productivity initiative. Aileen Blake, executive vice president and former controller, will lead the team that is dedicated to assisting the Driving Performance effort to sustainably transform Northern Trust’s culture.

“We continue to build enterprise-wide capabilities that help us ensure we are driving productivity and effectively utilizing our corporate resources in a sustainable manner,” Bill said. “It is in this spirit, that I have appointed Aileen to head our new Enterprise Productivity team that will focus on global productivity efforts as well as facilitating strategic corporate-wide investments in technology and capability development.”

Aileen has lead the productivity initiative since it began in early 2011. Under her leadership, productivity efforts have yielded tens of millions of dollars in cost savings for Northern Trust primarily through encouraging partner to creatively find ways for us to do things better or more efficiently as an organization.

To date, Northern Trust partners have submitted more than 1,200 ideas to Productivity with Purpose, many of which have resulted in substantial savings. In February, the company announced the awarding of significant cash prizes to 7 partners whose ideas already have generated millions of dollars in savings. (More information can be found in the February issue of The IDEA, Productivity with Purpose’s bi-monthly newsletter).

Enterprise Productivity will include the following teams: Driving Performance project management and capability development; In-flight end-to-end Driving Performance initiatives (Client Administration,

Pricing/Valuation, Procurement and US Client/Fund Accounting), A newly created technology capital oversight capability, and The Enterprise Product group.

Pete Magrini, O&T executive vice president, will now report to Aileen and lead the newly created Technology Capital Oversight team that will work closely with our business units to ensure technology capital expenditures are appropriately aligned with strategic priorities. In addition, Pete will be responsible for all technology capital governance processes.

Donald Chae, senior vice president and manager, Financial Analysis will leave that role to continue supporting our Driving Performance project management efforts and help build enterprise-wide capabilities supporting our productivity efforts. He will continue to report to Aileen.

Geordan Capes, Senior Vice President, C&IS, will become the leader of a reconfigured, evolving Enterprise Product Group. This will allow the strategy and resource allocation for enterprise sales and servicing tools to be more closely aligned with the Enterprise Productivity group’s efforts. In addition, this move will result in stronger corporate wide prioritization and governance to ensure we are leveraging our investments in partner efficiency, client information management and business process workflow improvements.

IIn London, Productivity cash awards winners were congratulated by Wilson Leech (center), EMEA head, and Clive Bellow (right), head of Ireland operations, and had a chance to sit down with Wilson and Clive to discuss their award winning ideas.

PFS Changes Affect North America and Europe

On March 8, Personal Financial Services announced organizational changes affecting partners in North America and Europe. The new structure aligns leadership roles with PFS and corporate strategy, accelerates Driving Performance and enables career development. The announcement was made by Jana Schreuder, PFS president, at the PFS all-partner meeting.

“The PFS Executive Leadership Team will be organized into roles representing three areas of accountability working collaboratively to guide the delivery of our PFS commitment to clients and shareholders,” said Jana.

The areas of accountability are:

Client Service and Business Development, where leadership will focus on servicing clients, developing new relationships and delivering profitability.

Global Family & Private Investment Offices - This group is formed by recombining Wealth Management groups in Chicago and EMEA as well as including the International Wealth Advisory business in Miami and is charged with expanding our business globally. Jeff Kauffman will lead this group. Caroline Devlin will move from her full time strategy role and join Jeff's organization to focus on executing our international strategy.

East Region - Southeast and Northeast Regions will merge to form the East Region. Dave Blowers will lead this combined Region and will be guided through the transition by both Jeff Kauffman and Sheldon Anderson. Sheldon will remain a member of the PFS Executive Team but plans to retire at the end of the year and will continue in a consulting capacity to support Northern Trust in the Florida community.

Central Region - The Midwest Region has been renamed and will be led by Mac MacLellan.

West Region - Steve Bell will continue to lead the West Region.

Capability Design and Expertise roles elevate our focus on designing and developing differentiated capabilities as well as subject matter expertise with emphasis on an integrated client and partner experience.

Banking - To evolve our core banking capabilities in conjunction with our Life Driven Wealth Management approach, Susan Mallory will take on the role of Banking Practice Leader, enabling Keith Gossler to focus on the important role of Chief Credit Officer.

Advisory - The Trust business and Specialty Advisory Services are being brought together into a single organization led by Charlie Mueller with our fiduciary heritage as a core base from which to provide a deeper, comprehensive Advisory capability. Hugh Magill will continue in his critical role of Chief Fiduciary Officer with a focus on extending his thought leadership activities as the voice of our Trust business internally as well as externally.

Investments - As was announced earlier this year, Katie Nixon has taken on the role of PFS Chief Investment Officer leading our Investments Practice. In addition to expanding our investment solutions, rolling out Goals Powered Solutions and informing the development of a new investment platform, Katie and her team will also be responsible for defining brokerage services as a part of investment solution set.

Sales & Marketing - Building on phenomenal momentum, this new team, led by Doug Regan, is responsible for sales, marketing, branding and introducing innovative ways of delivering our message to accelerate business growth. Brett

Rees and Amy Riggins will continue in their sales management and marketing leadership roles.

Client & Partner Experience - This new team, led by Scott Dille, is responsible for the segmentation and service model design through which we consistently deliver a truly differentiated client experience. Since this requires equal attention to our partner experience, the team will also be charged with ensuring partners are fully engaged and supported with training and tools. Dino DeVita (PCS) and Kendall Kay (FIA) will continue in their segment leader roles.

Execution Enablement and Governance will be provided through the expertise of:

Global Services - Chief Operating Officer - Marianne Doan who is responsible for driving the execution of key strategic initiatives and technology deployment which enable the transformation of the client and partner experience.

We also will continue to rely on our Corporate partners who remain key members of the PFS Executive Team: Jacobo Schatz, Chief Financial Officer, Jim Monhart, Chief Risk Officer and Amyre Coleman, Human Resources Manager.

A Conversation with Steve Fradkin, president of C&IS

Steve Fradkin has been with Northern Trust for more than 25 years, serving in a variety of capacities, business units and corporate roles. Prior to becoming president of Corporate & Institutional Services, he served as executive vice president and chief financial officer. Steve was responsible for Northern Trust’s international business before assuming his role as the Corporation’s chief financial officer.

Northern News recently had the opportunity to talk to Steve about the C&IS business and his career at Northern Trust.

NN: Did you have any notion when you joined Northern Trust in 1985 that the company would be a long-term home for you?

SF: What I accepted from Northern Trust in 1985 was a "job." What I did not realize at the time, as I had very little employment experience, was the difference between a "job" and a "career opportunity." As someone who has had multiple "careers" within Northern Trust — ranging across compliance, marketing, sales, international, general management, finance and beyond — it is only now that I fully appreciate how important the opportunity to build sweat equity within an organization can be over time.

As I reflect upon working here for more than 25 years, it is important to remember that reaching a quarter century of service here is a result of working for a great company that has provided me with many opportunities over the years — rather than a simple choice made at the inception of my employment.

NN: You travel the globe as president of C&IS. What country or region do you find particularly intriguing from a business and/or cultural perspective?

SF: Over the course of my career, I have travelled several million miles on behalf of Northern Trust. It is a privilege to represent our organization and I have been struck over the years by how well this company is respected — even in markets where we are very far from a household name. My travel experiences over the years also have enhanced my appreciation for the strength and value of diversity in all its forms.

Each country, region or culture carries with it a set of norms and expectations, as well as a unique view of the rest of the world. Perhaps what I have learned most of all is how every country or region brings some interesting strengths to the table.

When I joined Northern Trust we had extremely small offices in London and Hong Kong. The transformation since that time has been remarkable. We now have offices in Japan, China, Hong Kong, Singapore, India, Australia, London, Ireland, the Channel Islands, Luxembourg, The Netherlands, Sweden, Abu Dhabi and Canada and one-third of Northern Trust’s partners are located outside of the United States. This evolution has been inspiring to watch and has afforded me a wonderful opportunity to learn so much more about the world in which we live and the strengths and interests of various cultures. Our success around the globe has also served as a career reminder for me. You cannot always micro manage your career and predict or anticipate the next stage. I can categorically say that I never would have dreamt that Northern Trust would be as global as it is today.

NN: Much of your dialogue with C&IS partners of late has focused on adding value to relationships with clients, an idea that applies to all Northern Trust partners whether their clients are external or internal. How would you explain this to partners across the organization?

SF: As I have said many times to partners across our enterprise, excellence is not a part time job. To be excellent, in the eyes of our clients or other constituents, requires an obsessive drive and relentless focus on what "value" means to everyone you interact with in your role, internally or externally, and how we ensure that we provide value consistently, every day, in every interaction. Simply doing what we are hired to do or what is expected of us at the price and quality we committed to is not sufficient.

I have a relentless focus on thinking beyond what clients have asked of us or hired us to do. I have seen this mind-set grow both within C&IS and, importantly, across all of our other business units as well. I believe it is a great competitive advantage and will serve us well in the years to come.

NN: During 2011, Northern Trust made two important acquisitions under the C&IS umbrella. The acquisitions are different in nature – Omnium brought capabilities and

new clients while BOISS reinforced a commitment to a current business. Together or separately, how do they help position Northern Trust for the coming years?

SF: We are extremely pleased with both investments, and are already seeing the benefits of these acquisitions, even at this early stage. With Omnium, now Northern Trust Hedge Fund Services, we are off to a great start — currently serving more than 50 clients with high levels of satisfaction. With only about a half of one year under our belt, the team has successfully implemented one of the largest hedge fund conversions in industry history with our new client, Carval, and has also won nearly 20 new clients on four continents, with a wide range of investment strategies. The pipeline, and Northern Trust's reputation in the hedge fund administration arena, continue to grow and we are extraordinarily well positioned for the future.

Our acquisition of the Bank of Ireland Securities Services has also gone extremely well and brought us new industry-leading capabilities, particularly in the area of serving exchange traded funds. Now, in combination with our existing capabilities in Ireland, we are one of the largest administrators in the Irish marketplace. As Clive Bellows and Meliosa O’Caiomh from our Irish offices can attest following a recent meeting, even the Irish Taoiseach (prime minister) has taken an interest in Northern Trust’s success and growth in Ireland.

I believe both acquisitions will, in the end, prove to be extremely important contributors to Northern Trust’s future success.

NN: As we finish the first quarter of 2012, what are the “hot” product or service offerings in C&IS?

SF: One of our core objectives for C&IS for 2012 is to continue our focus on innovation. Amidst a difficult environment, it would be easy to put our heads down and simply try to navigate through the storm. While we are very focused on Driving Performance and continuously improving our results, we are also committed to exploring new ways to maintain and enhance the relevance of what we do for clients through organic product development and via acquisitions.

We are actively innovating across the product spectrum from reporting through to risk analytics. We are also exploring a variety of innovations on the client service front and considering new ways to aggregate data across client groups in ways that can be extremely interesting. Last year we averaged two product-related announcements per month and I expect we will continue that pace in 2012 with all that we have going on.

A few product highlights include our first Australian Superannuation (pension) plan going live with Investment Operations Outsourcing; our clients’ increased interest in Risk Services and our new business growth in hedge fund custody and administration.

NN: What changes do you see on the near-term horizon for C&IS?

SF: Change is a constant in the C&IS business and for the corporation as our clients continue their never ending quest to optimize investment returns on a risk adjusted basis in a continuously shifting global economy. Accordingly, to me, the near term horizon is not about change as much as it is about continued evolution.

In capitalism, nothing stands still. If we lose our edge or lose our relevance to clients, others will pass us by. Northern Trust is not just the place we work but, is also the place that enables us, and our families where applicable, to enjoy the lives we lead. As a result, I take my role here very seriously and I know that the rest of our partners do as well. We will continue our relentless focus on clients, on Driving Performance, on integrating our acquisitions and other complex clients and activities, and on innovation — all designed to make us the provider of choice to the clients we seek to serve.

Partner Points of View

In each issue of Northern News, we ask a number of Northern Trust partners from around the globe to answer a question in their own words.

Do you like this feature, or have suggestions for future questions? Let us know what you think.

As Earth Day approaches, do you have plans to increase your sustainability efforts at work and at home? (Click on the partner's name to hear their response.)

 Amit Sachdev, Learning & Development, Bangalore

As one of the founding members of the Green Lounge Club in Bangalore (now a part of Partners Think Green), I have always believed strongly in doing my bit to “Go Green.” This Earth Day I plan to do a few additional things that can help me reduce my carbon footprint.

Save paper by always printing on both sides Save paper by using my mug instead of paper cups for water/coffee Save electricity (and exercise) by using the stairs instead of the elevator Save fuel by cycling to work once a week Save water by installing low flow shower heads and taking shorter showers

I am positive that each of these small steps will help me contribute to a greener earth.

Amy Franklin, O&T Communications, ChicagoI have never owned a car, so as the warm weather approaches, I’ll be biking to work regularly. To cut energy use at home, I wash laundry in cold water during off-peak hours and line dry everything, use energy efficient lighting and moderate indoor temperature, especially during summer. I clean my apartment with mild solutions made from basic household ingredients and recycle as required. Also, I shop locally and buy produce at the city’s farmers markets from May through October. My actions aren’t driven solely by the environment, but they effortlessly decrease my carbon footprint and increase sustainability.

Philip Tan, APAC Corporate Services, Singapore

To contribute effectively to the preservation of the environment, it means going the extra mile in changing my daily habits and lifestyle. The key is how to reduce waste disposal both in the office and at home. I like to concept of the 3 “R”s: Reduce, Reuse and Recycle. There are many opportunities to practice them and all it takes is discipline which turns into daily habits. More important is influencing our partners, family members and friends to have a mind-set change and take a serious stand on environmental issues.

Pauleanna Reid, Toronto

In celebration of Earth Day, my commitment to learning more about the environment and how I can contribute to its protection has amplified. By exercising a daily proactive approach both at work and at home, my efforts to increase sustainability will be illustrated through my actions. I will lead by example by turning off the computer at night, reviewing all labels of chemicals and cleaners, and limiting my use of water and energy appliances.

The Words We Use

Have you ever been in a meeting and heard someone say, “Let me Cartoon this for you,” or maybe, “We need to hold hands on this”? If you haven’t that would be surprising because they are phrases heard at Northern Trust meetings daily. Corporations tend to develop their own language over time, and Northern Trust is no exception. In our case, that language is a hybrid of American English, British English, current business slang/clichés and Northern Trust’s own vernacular.

How did these words and phrases come into play at Northern Trust? No one knows for sure. Some hitched a ride with incoming partners who joined us from other organizations; some have likely been bouncing around Northern Trust in various forms for decades and others, no doubt, arrived from business schools and literature.

Regardless, we thought it would be a useful and fun exercise to catalog some of the more common words and phrases we hear every day, together with their definitions as we understand them. (See below).

Have your own favorite words or phrases that aren’t included here? Please e-mail them to the Northern News mailbag and we will share many of them with all partners in the next issue of Northern News.

Northern Trust Phrase Translation

We need to hold hands on this This needs to be a consensus decision.

We can't just spread the jam We shouldn't allocate a particular thing evenly.

Let me cartoon this for youLet me give you a very simple, exaggerated example of what I'm trying to explain.

Put a klieg light on it Examine something in detail.

For your benefit. You're not as familiar with the topic as I am so I'll give you some context.

Moving the needle Pushing a project forward.

Socializing the idea. Asking others for feedback.Gaining traction in the organization. Acceptance of an idea is growing among partners.

Above my Pay Grade. Someone senior to me must make the decision.

CIRT, BIRT, LIRT Acronyms for corporate, business unit and local incident response teams.

Many thanks and kind regards. E-mail sign offs that proliferate.

Stay close to our clients on this. Make sure our clients approve of what we're doing.

Complexity is our friend. The more complex things are for our clients, the more they need us.

Drill down. Seek date or facts well below the surface.

On Northern time. A nice way of saying someone's late.

Bangalore Partners Paint Trees —Yes, Trees — to Help Keep Kids Healthy

On March 10, more than two dozen Northern Trust partners volunteered at the SOS Children’s Village, a volunteer organization dedicated to caring for parentless, homeless and abandoned children. It also works to strengthen the ties between parents and children, so that children won’t suffer or get abandoned due to domestic problems.

Northern Trust partners engaged in an activity called “Shramdaan,” — doing voluntary work through physical effort — by painting the village trees with limestone to a height of 5 feet to help keep the village children safe from tree-borne bacteria.

In addition to local partners, the Northern Trust volunteer group included Joyce St. Clair, Operations & Technology head.

Joyce St. Clair (seated, center), head of O&T, joined more than two dozen Bangalore partners at their March 10 volunteer event.

NEWSBRIEFS

NATO Summit to Impact Chicago Operations

You have likely heard that the North Atlantic Treaty Organization summit will be held in Chicago the weekend of May 20-21, 2012. During that time, the city will welcome nearly 5,000 world leaders and dignitaries in addition to United States President Barack Obama.

In the past, similar gatherings have attracted thousands of protestors. On occasion, the protests have resulted in violent acts. There may be disruption to public transportation and significant traffic delays which could make it difficult to commute to the business district. As a result, companies throughout the Chicago area, including Northern Trust, are working closely with one another, the City of Chicago and U.S. government officials to plan for the possibility of significant disruptions during the days leading up to and during the summit.

More information will be distributed soon to all employees via e-mail.

If you have any questions or concerns, please discuss them with your manager or send an e-mail to G8-NATO Summit Communications.