♪ francine: legal & general was founded as an insurance company by six london lawyers in the 1830's, but now has businesses and funds around the world. it is one of the largest institutional managers in europe and has more than 980 billion pounds in management. so what does it take to manage a company with this kind of complexity? today on "leaders with lacqua," we meet nigel wilson, chief executive of legal & general. nigel wilson, thank you for speaking to bloomberg. and being here on "leaders."

l&g has a diverse business. the pension business, real estate, how do you measure success? nigel: one way is the development of people. talent really matters. we have highly motivated and highly talented people. one of the great things we have achieved in the last two years is outstanding people. yes, we have had great results, but actually, the results are great consequence of the great people and implementation and execution of a strategy. francine: how do you motivate people? nigel: people enjoy doing what we do because they are engaged emotionally what our purpose. people believe we have an important purpose because we do such outstanding things to make a difference in lots of people's lives. we are not a trading operation trying to make daily or weekly profits. we are looking at the very long-term. and as a consequence of that, developing economic activities

that provide solutions to the very long-term in a very holistic sense. francine: you are talking about pensions. are we saving enough for our pensions? nigel: we certainly are not saving enough anywhere, and that is one of the challenges society has. because not only do we need to save more, we need to get a better return on what we have qen saving, and in a environment, in a low interest rate environment, we have had to come up with solutions that line to the real economy and driving real growth. francine: who should pay for the pension deficit? nigel: it is sharing between the employer and employee. that is the model moving forward. we as an employer relies we have -- we as an employer have to recognize that we have to step up, but also, individuals have to step up. as a business, we have to step up because you have to find ts that deliver good return to people, and educate people on why it is the right thing to do. francine: how will your business change in the next 10 years, we talk about ai, robots, doing

things digitally? when it comes to insurance. what do think is the biggest transformation for you? biggest thing the for us is to be what to do more things with the same amount of people, because of the application of technologies. people worry that jobs will get taken away by technology, but activities will get taken away, a lot of boring, mundane activities will get taken away, but lots of great new jobs will be created and lots of new opportunities will be created. that is what has happened in the last 200 years. every time there is a technological leap, people get very fearful about jobs. the u.k. has more jobs now than it has ever had in history of time. 32.6 million people, more vacancies than it has ever had in the history of time, but actually, people are still worried about technology. francine: but is it the right job? if you aren't trained for it, you will be displaced. nigel: that is a good point. we have these vacancies because we haven't trained people to

take advantage of these new opportunities being created through the application of technology. we are all short of a lot of skills. when i wander around the country, the biggest issue is skill shortages, and if they could get more skills, they could actually grow their business much quicker. but hasn't been happening for a number of years. francine: whose responsibility either educate, transform, or train the citizens of tomorrow? nigel: it is a collective responsibility. we certainly have to step up and improve our training. but actually, the universities and the schools need to improve their training, to make people have relevant skills. the world has changed. therefore, you need to change what you are teaching people. and change their attitude towards stuff. the thing that has struck me traveling around the world, is the spirit of entrepreneurship in universities is the highest it has ever been in my life, because they see these wonderful

opportunities. they just sometimes don't have the skills in maximizing the opportunity. francine: is that why we see the rise in populism? nigel: it is part of the reason. the are many reasons for that happening. a model thateated is inclusive in capitalism. it is all about exclusive wealth. that is not selling well to the wider population, so people are looking for different solutions, and looking back in a very nostalgic type of way at history. things were better 20, 30, 40 years ago. well, they weren't really. but actually, the pace of change has favored different types of skill sets over other types of skill sets, and people are feeling left behind because they are not well-equipped to deal with modern society. francine: why? is that a legacy of the financial crisis, capitalism that needs to be rethought? nigel: it is capitalism that needs to be rethought. i don't think it is a legacy of the financial crisis at all. i know we blame the crisis for a lot of things. it has nothing to do with that. i think there are lots of new skills required.

we haven't created the infrastructure to create lots of those skills. universities, schools, and clarify carousels, need to transform and create more relevant skills, and more ambition among people so they can see a path to prosperity for themselves. francine: up next, dealing with brexit britain. we talk to nigel wilson about the challenges of running a business in the u.k. ♪

♪ francine: legal & general has

operations around the world, but it is a british business. over the past few years, it has contended with swings in the pound, elections, and uncertainty about the outlook for the nation post-brexit. so, what kind of leadership skills does it take to make decisions for a u.k. business amidst this uncertain environment? nigel wilson is still with me. do you worry that countries have like the u.k., but also the u.s., and a lot of european ones, have either a south-north divide, or a midwest, east coast-west coast divide? nigel: i absolutely agree with that. i think it is sad that has been to happen. we are sitting in this building in london, the best city to live in, but we have neglected the rest of the cities and towns in britain for the last 30 or 40 years. part of our mission has been to put money in these places and help them grow. it is the same in america. you have so many flyover states

, and so many great cities, but actually many others have fallen behind. francine: you are really a champion of rejuvenation in the north when did you realize that . was a necessity? nigel: that was after the crash, when i thought about going back to my training as an economist at m.i.t. it was so obvious that london had got ahead of everyone else and everywhere else had fallen behind, so for the u.k. to prosper, the cities of the north indeed of the south as well, needed more capital put into them. could deliveral extraordinary returns, because there was such a large cache of potential. that youd to realize couldn't just sit and wait for the man from whitehall to go north and say we have these problems and here is how we can solve them. there are enough problems here for people to solve without going to edinburgh, or newcastle, or manchester.

we made a difference. francine: where do you see the biggest problem for the u.k.? nigel: we have a huge infrastructure deficit. america has got a bigger one, actually. has $150 billion in housing, 100 billion pounds -- 150 billion in housing, 100 billion in energy, transport, a massive transportation deficit, big regeneration, and a digital deficit. that capital is all available, but it is sitting on the sidelines. francine: why is it sitting on the sidelines? nigel: i think because it is new. we haven't been investing in these towns and cities or doing these big projects for a long time. america has some great examples. austin, texas is fantastic. boston is doing a great job. lots of cities have been on this journey. there are a handful of around the world that have been amazingly successful, including in china. you know. the chinese have an authoritarian solution to making this stuff happen. in a democracy, it has proven

very difficult because we have tended to have quite a confrontational, political ideology type of model which is hard to get things done. we want very much to have a collaborative model so everyone realizes we have a common goal. how do we work together? francine: how much are you doing housing, so it's like a flatpack you can roll out? nigel: the biggest thing is in infrastructure. we have spent 15 billion already and prove the concept works. it has taken 15 billion to do that, but it actually works. we now need to figure out how do we scale that happen use the fact that we have 32,000 pension ands -- 3200 pension funds move that money into real assets, creating real jobs, improving ranges and creating real skills for people. long does that take to see the fruits?

i keep hearing about that in augusta infrastructure. you put 10 billion, 20 billion, 30 billion, but it takes a long time to see returns. nigel: i don't agree with that. everybody creates barriers for not doing things. you create a pipeline. we created our pipeline, seven or eight years ago after the financial crisis. now it is a huge pipeline. we have had double digit growth, 20% plus r.o.e., so we are doing something right. it is the fact we have had this very long-term view. and yes, there will be some infrastructure projects that last 30, 40, 50 years, but we have liabilities that are 20, 30, 50 years. so we are assets with those liabilities. that results in a great solution for everyone. -- we are matching assets with those liabilities. that results in a great solution for everyone. francine: you started doing this seven years ago. do you think more chief executives are looking at long-term infrastructure, or less? nigel: it doesn't have to be

chief executives. it can be pension funds. it can be mayors of cities, chief executives of councils. you need a critical mass of people who have a common interest. they don't all have to be chief executives. it helps. francine: has it gotten worse, or better? nigel: it is definitely getting better. a lot of people lept into brexit. one of the things that surprised everyone is actually employment is at an all-time high, vacancies are at an all-time high, and the economy is growing at the same pace as in europe for the last few years. in to brexit,ant realizing that they get just sit around and do nothing. francine: what do investors misunderstand about northern u.k., some of these parts left out to investors? nigel: they have to get out and visit them. the thing i say to politicians is if you keep living in the london bubble, all you need is like-minded individuals. -- all you meet like-minded individuals. you have to walk in their shoes and visit these places and talk to people and actively listen. lots of these solutions are not our solutions.

many times we walked in and found the vice chancellor of the university had this dream, this great vision, but to make stuff happen, and the capital to make stuff happen has been very difficult. we have often bought into other people's vision and said, that is a great idea. we will support and make it happen. francine: i have been told in your office there is a bookshelf with many different books. what do you have on there? nigel: i have everything. i have all the classics, as well as modern books. i have economic books, all the classics, but also modern books. i gave up sleep many years ago and decided reading -- but i have always been intellectually curious. the fact that i'm intellectually curious has resulted in a lot of people acting as great mentors to me. i feel privileged to have wonderful people who spend a disproportionate amount of their lives helping me. that is why people come first, because i got lucky in life,

from my junior school teachers when i was six or seven years old, until today, people who have been mentoring me. francine: nigel wilson, thank you. coming up, legal & general puts its money where its mouth is when it comes to diversity. details next. ♪

♪ francine: nigel wilson has long been a proponent of shattering the glass ceiling. his business has committed to increasing the representation of women in management roles to 50% by 2020. as the father of five daughters, the issue is a personal one, as well as smart business. nigel wilson is still with me. how have your five daughters shaped the person you are? nigel: immensely. because family comes first. i wanted to be a good dad.

my daughters are all strong willed. [laughter] they have been very demanding over their life, but actually, seeing through their lens as they grow up, the restrictions to a certain extent of the opportunities presented them to them, it meant i had first-hand like ince of what it is effect, to be a woman trying to get on in a modern world, and all the barriers you have to overcome to get to the top. that is in part why we developed our 50-50 by 2020 program. francine: 50% of senior managers being women by 2020. nigel: yes. francine: how do you actually attract talent? is it inside, outside? nigel: it became a great message, and a powerful message internally. in fact, one of the most difficult management challenges i had was i wanted 12 of our senior women to be role models. i wanted a photograph and a little narrative on them and put

it across the firm, trying to persuade them to do it, they all went, other people are much better. whereas, if i asked the guys, i would have 50 of them running on my door telling me that they were the guy, that they wanted your photo. seeing the power that that has come other people have got to the top -- you know, we have seven divisions and four of those divisions are woman-led. will thatdo yo change? do people actively try to work for you because of that? nigel: i think that is true. i think we have become a magnet for talent. lots of people see l&g is a great place to come and work. we are not just an actuary firm or a fund management firm. there are lots and lots of different jobs for people. francine: do you see that changing the industry as a whole? if you look at insurance, it is probably one of the industry's most behind when it comes to modernization, in many ways. that is fair, isn't it? nigel: i don't think that is not fair at all.

i think we have moved on dramatically. divisions, related divisions, are run by women. our actuaries are run by women. what is interesting, the pension transfer business and the u.k., the three leading companies are all now managed by women. the industry is changing. and nobody has noticed that, actually. i won't even mention it to competitors, but they are run , and very successfully, by women. so we have changed already. i don't think we have shouted loud enough about the change that has gone on in our industry, but we had this goal and we are on track to deliver that goal. it is very exciting. francine: who has been your most important mentor in your life? nigel: i have been very lucky. people have been kind to me since i was very young. i met my primary school teachers who taught me for three years

when i was very young and really coached me in lots of different ways. it was a wonderful, moving experience. i hadn't seen her for many years. she came to an event and asked me to guess who she was. i hadn't seen her in about 50 years. [laughter] sinceas a very long time i had seen her, and it was just wonderful. she had followed my career over all those years. but i had some very interesting life-learning experiences. at m.i.t., i worked with bob -- and i realized very quickly that one of us would get the nobel prize for economics, and one of us wouldn't. [laughter] i realized in the academic world i was better suited to working in business and i should go work in business because i wanted to see things happen quicker, and i i wanted to see things happen. write dullnt to research reports. i had tremendous commercial experience when i was a group commercial director, dealing

with issues around the world. i worked for mackenzie, so many of the partners took a real interest in my career. i was the first phd from m.i.t. they had hired. i think they had a. city as to what this person to contribute towards the firm, anything they got a lot out of it. francine: who is the person you admire the most? nigel: i don't know if i have a single person i really admire the most. i admire different people in different situations and different walks of life who have made a bigger contribution, who have the right values and behaviors. some of my heroes might be people who don't necessarily have the right to his ears. similarly, people have made a huge political difference, but they might not have had the right behaviors, so there isn't a single person who i say, wow, they are so inspirational. francine: what does it mean being a leader in 2019? is it different than being a leader in 1999? because of the changes were going through? nigel: absolutely.

think the command and rule authoritarian approach we saw in the past, and silo-driven organizations is gone now. you have to form an organization that is about collaboration, teamwork, visible, shared accountability. people want that accountability and responsibility. you have to have a real purpose. i think businesses will struggle if people who work for them can't be emotionally engaged in what they are trying to achieve in their purpose. bloomberg is a good example of that, where you are the dna of business. francine: how do you translate that dna to your employees? nigel: every office every year i nigel: i visit every office in the world every year and maybe everyone who works for us. everybody has an opportunity to talk to me and see me physically. it is not just a corporate video going out, we do that as well, of course, but i wanted that

engagement. i want people to listen to what i say but also questioned me and put me on the spot. discussiont physical , and people feel therefore, that they are being listened to, and we then listen to what they have said and actually make better outcomes for them at work, and for society as well. francine: what is the best piece of feedback or advice you have received? nigel: i think, about actively listening. i think the m.i.t. mckenzie background made me a little intellectually arrogant. i have turned that into intellectual curiosity, which i always had, but i am much more tolerant as a consequence of that. . engage better than i used to because there are lots of ways of looking at things and you need that diversity, and over time, we have created a lot more diversity in the workplace,

and as a consequence of that, you can become a better leader by listening. it makes a difference. francine: is there something you don't like about your job, or a particularly difficult day you don't want to happen again? nigel: i think the regulatory burden of financial services at times can be slightly overwhelming, because that is really the legacy of the financial crisis. there is a huge regulatory burden put on us, but we have to become a trusted industry. i think that legal & general is a globally trusted brand, but we have to be a trusted industry. we still have some way to go on that. but once we saw the pension crisis, the housing crisis, the infrastructure crisis, and actually help create lots of real high-paying jobs, then trust will increase exponentially. francine: what do you want your legacy to be? nigel: i don't really want to have a legacy. in a sense, i am happy with everything legal & general achieved, but actually, i never think about my legacy at all.

i would like people who work for me and work with me to say, it was great working with nigel. if people remember me as a good person to work with, then that would be fantastic for me. francine: would you ever go into politics? nigel: i have been asked that question since i was 11 when i used to go knocking on doors and canvas, as this midget 11-year-old. i think people used to find it very unusual. i was chairman of the youth club at 12. i sat on the village hall committee at 12 and 13. francine: so you are telling me yes, you were made for politics. nigel: no, i am not made for politics at all. i am made for business. i like to have engagement with politicians. politicians have very difficult lives, and they don't have a lot of levers to pull. i have lots of levers to pull that can make a difference. i think we have made it difficult for politicians to do that. so i have no interest at all in being a politician. by have got a huge interest in

helping politicians and others deliver better societal outcomes. francine: nigel wilson, thank you so much. nigel: thank you. ♪

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