In an exclusive interview with the Monitor, Adam D. Warner, the 2014 chairman of the ELFA’s board of directors, discusses his priorities for the year, which include sustaining the association’s ongoing lease accounting and tax reform projects. He will also focus on attracting new talent to the industry and creating more diversity on the ELFA board.
Adam D. Warner, President, Key Equipment Finance
As the old adage says, if you want something done, ask a busy person to do it. That would explain how Adam Warner, president of one of the largest U.S. bank-affiliated equipment leasing companies with approximately $8.5 billion in assets, finds the time to lead the 28-member board of the Equipment Leasing and Finance Association, which represents more than 580 member companies.
When Warner joined Key Equipment Finance in 2001, the company was already active in the ELFA, which drove his interest to become more deeply involved in association activities. He began his service on the board in 2007 and became vice chairman in 2010. Regarding the time commitment necessary to serve the association at such a high level, Warner explains, “As with any type of investment, you have to consider the long-term strategy and the payoff. The payoff, frankly, is hard to beat. The networking and interaction with other association executives is meaningful. You are representing your company in setting policy and strategic development of the association. When you consider what actions are necessary to keep our industry strong, resilient to economic downturns and policy changes, you can sit on the sidelines and watch, or you can be an active participant and try to shape the future.”
Priorities & Initiatives
Part of the board chairman’s role is to steward ongoing initiatives. Two crucial ELFA activities include representing the industry in the face of the proposed lease accounting changes and advocating in Washington, D.C. for comprehensive tax reform that does not disadvantage leasing.
An additional project that Warner would like to undertake includes drawing new talent to the industry and the association. “No one that I know of goes to business school thinking, ‘When I graduate I want to get into the equipment leasing industry.’ We are in an enormous industry that hasn’t done a great job of self-promotion, especially on college campuses, younger group forums and on social media,” Warner explains.
Toward that end, the ELFA’s board has started a subcommittee to develop and make recommendations on how to further engage young talent in the industry and the association. One useful tool in the effort will be ELFA’s Guest Lecture Program, a standard presentation that executives can deliver when speaking on campuses, teaching a class or addressing business school boards. The prepackaged material describes what the equipment finance industry does and how it helps the economy and creates jobs. The subcommittee is also focusing on educating members on the value of recruiting graduate and undergraduate students into their businesses and ways to approach schools in order to reach these potential candidates.
Warner’s other focus will be on working toward creating more racial and gender diversity on the ELFA board. “I want to examine what modifications we can make and how we can attract a more diverse board slate, starting with the nominations committee considering a more diverse pool of candidates,” he explains.
When reaching out to member companies for board candidates, Warner would like to consider drilling below the CEO level. “Perhaps digging little bit deeper within member companies will generate opportunities to identify a more diverse slate of board candidates. Likewise, perhaps providing the chance to serve on the board could help to catapult careers to that CEO level,” he adds.
Adding to the difficulty, he says, is that the financial services industry may not be the most diverse profession. But Warner says, “I’m proud of the fact that at KeyCorp, our CEO, Beth Mooney, is the first woman to lead a top-20 U.S. bank and was voted by American Banker as the most powerful woman in banking.”
Each year, the ELFA sponsors Capitol Connections in Washington, D.C. as an opportunity to educate members of Congress and Administration officials about the equipment finance industry and advocate for important industry issues. Topping the list is the ongoing issue of comprehensive tax reform. If the U.S. government lowers the overall corporate tax rate for businesses, the concern for the equipment finance industry would be the lessening of deductions that minimize capital formation. “We want to make sure Congress is educated on the impact that could have to not only finance activity, but overall equipment sales,” Warner explains.
In addition, the ELFA must remain nimble in order to respond to various agenda items that get introduced throughout the year. An example that Warner gives is a provision in the Dodd-Frank legislation that requires lenders to collect the minority status of the applicants. However, the Equal Credit Opportunity Act forbids a lender from asking for that information. “So now we have contradictory legislation between the ECOA and Dodd-Frank about what a lender is supposed to do. Those types of things come up every year, and we need to get in front of Congress to talk to them about what the challenges are that perhaps they aren’t aware of,” he explains.
While on the topic of Washington, Warner notes that federal policy uncertainty will continue to contribute to the slow pace of the economic recovery. “When our federal government doesn’t resolve issues, but just keeps moving the due dates for further debate, it creates concern for business leaders about what the future holds. That uncertainty creates a level of paralysis and frustration within the business community. It doesn’t matter who is at fault, the point is that significant issues don’t get resolved,” he says.
However, despite the slow-growth economy, members of the equipment finance industry remain positive. “The good news is that businesses are going to continue to need equipment and the industry adapts to those needs and develops creative solutions. An example is how to finance software as a service, the cloud and disruptive technologies. From my perspective, while there are always challenges out there, we have a very optimistic and entrepreneurial spirit in the industry that keeps it moving forward,” Warner explains.
Embracing the Industry & the Association
Warner began his career as an accountant and found himself working at McDonnell Douglas Finance. He enjoyed the work and made equipment finance his distinct career choice, working his way up to operations manager. “Like most of us, we tend to stumble into the industry,” he says with a laugh. “It is one of those specializations that once you learn the industry, the nuances and how the market works, your capital goes up and you become more coveted in the market for your industry expertise.”
Warner says that it always has been important to expand his skills and to accept different types of opportunities to broaden his knowledge. “The important thing is don’t stop learning, not just about our industry but about being a better leader and collaborator,” he says.
When asked how members can get the most out of the ELFA, Warner stresses active participation to learn about key issues and how peers in the market are tackling them. Going to conferences and getting involved on committees or steering councils are ways to ensure employees of member companies are getting the most out of what the association has to offer, he notes. “The association works to benefit all of its members. But just sitting on the sidelines hoping issues get tackled really is not a way to be proactive in shaping the industry or the association,” he says.
The role of ELFA chairman is not to run the association but to run the board and set the agendas and strategies for the association, Warner explains, emphasizing the strength of the staff under the guidance of president and CEO William G. (Woody) Sutton. To illustrate how impressed he is with the management of the organization, Warner shares this anecdote, “Earlier this year as chairman-elect, I attended a symposium with Woody for association CEOs and their chief elected officers. What I learned is that we have a very functional association compared to many that are out in the market! When I think about how our association works together and collaborates, I attribute much of that to Woody Sutton and his leadership. Equipment finance is more widely recognized now than it ever has been as leading economic indicator, and the ELFA’s Monthly Leasing and Finance Index is covered by the Wall Street Journal and Bloomberg. I credit that distinction to the work of the association staff.”
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