European CEO

Vertex tax technology: Why add a tax engine for procurement

Tue, 17 Nov 2020 13:30:55 GMT

Today’s tax departments continually look for ways to streamline their operations and reduce audit risk. That focus is not just on the sales side of the business, but on the procurement side as well.

Regardless of whether you’re using your ERP system or implementing a new procurement platform, managing tax in the procure-to-pay process requires constant collaboration between tax, IT, procurement, and accounts payable teams. Without this partnership, it will significantly increase audit risk and inefficiencies within AP.

The manual process of tax research and updating financial systems can strain in-house tax and IT resources, and lead to tax errors. Even when these systems are updated with the latest tax content, their native tax functionality is usually not granular enough for today’s complex tax landscape.

At the same time, tax coding decisions on purchase orders and supplier invoices are being made in the AP department instead of the tax department; and all this is happening at a time when tax authorities are increasing audit activity.

Integrating a tax engine automates sales, use, and value-added tax determination to improve the accuracy of taxes paid and accrued. It uses rules-based calculations instead of human decisions. It applies the same tax logic across the procure-to-pay process: at the requisition and purchase order stage, and at the invoice reconciliation and approval stage.

Adding a tax engine for your procurement process brings benefits across tax, IT, and purchasing. It reduces the burden and cost of continuous in-house tax research, since tax content is maintained by the tax engine provider. There’s less IT support needed to implement tax changes, since this can be managed by the tax specialists themselves. It improves tax accuracy since the functionality is more robust than native ERP or procurement systems.

You can introduce consistent tax coding for reliable, repeatable accounts payable process, where tax own tax decisions. And you can integrate a single tax engine to all your financial systems across sales and purchasing, for centralisation and scalability.

Add a tax engine to your procurement process today to improve tax accuracy, reduce IT support, increase efficiency, increase scalability, and improve audit performance.

Vertex tax technology: Why add a tax engine for VAT determination

Tue, 17 Nov 2020 13:30:53 GMT

Today’s multinational businesses face constant changes that affect global tax determination. Not just the ongoing regulatory changes, but business changes: including market expansion, M&A, new financial systems, and new product offerings.

With these constant changes, the process of manual tax research and updating every financial system can be a significant cause of VAT error, and a strain on in-house tax and IT. Even if the tax content is up-to-date, the native functionality in these systems often doesn’t meet the needs of a complex multinational, leaving them exposed at audit time.

Adding a tax engine to your ERP and financial systems improves your VAT process in multiple ways. A tax engine takes away the burden and cost of continuous in-house tax research, since tax content is maintained by the tax engine provider. Adding a tax engine improves VAT determination accuracy, since more relevant data elements are considered than in a native ERP calculation.

With a tax engine, there’s less IT support needed to implement VAT changes, since this can be managed by the tax specialists themselves. Using a tax engine, you can introduce consistent tax coding for a reliable, repeatable accounts payable process. You can conduct adequate real-time reporting, since the tax engine ensures VAT is calculated accurately the first time. A tax engine centralises your VAT controls, allowing for a more agile tax organisation that can scale quickly with business growth.

Adding a tax engine can reduce the overall cost of global VAT management. Integrating a tax engine with your financial systems is essential to stay ahead in today’s tax landscape. You’ll improve your end-to-end VAT processes, making it more efficient, agile, and scalable.

Vertex tax technology: Introducing SAP chain flow accelerator

Tue, 17 Nov 2020 13:30:48 GMT

Managing tax across Europe has become increasingly complex: with new VAT regulations, migrating to the cloud, multiple financial systems, faster data speeds, and urgent reporting deadlines.

For companies with cross-border supply chains, ensuring consistent VAT treatment across all legs of transaction requires tedious manipulation of data in the ERP system. The process is manual, error-prone, and usually requires significant support from IT.

Errors in the interpretation of which data is relevant for VAT determination can mean errors in VAT payments and accruals which affect the bottom line.

Vertex offers a visualisation tool to streamline chain flow data mapping for improved VAT determination. Using the chain flow accelerator, the user can map data inside SAP ECC or SAP S/4HANA to Vertex VAT fields – and perform an interpretation of the data before it’s sent to the Vertex tax engine for VAT determination.

To perform this data mapping, Vertex offers a unique visualisation tool to streamline the data mapping and improve accuracy. Tax professionals can use the tool without IT intervention, connecting up to 80 data elements and documents in a chain, to ensure consistent VAT treatment across the transaction.

The streamlined chain flow data mapping is not only available in S/4HANA, but also in ECC. SAP customers who implement the tool now in ECC can streamline their migration to S/4HANA, since the VAT data mapping can be easily transferred.

Add the Vertex Chain Flow Accelerator to SAP ECC or SAP S/4HANA today – to improve VAT accuracy and spend less time recouping VAT overpayments, reduce IT support, increase tax department efficiency, and improve audit performance.

With success comes social responsibility

Mon, 16 Nov 2020 05:00:17 GMT

Just five minutes speaking with Martin Flick, CEO of Olive Communications, and his clear passion for people soon becomes apparent.

Named as one of LDC’s Top 50 Most Ambitious Business Leaders for 2020 and having tripled the turnover of cloud communications company Olive to £32m in just a few years, Flick is a firm believer that success comes from investing in people – your staff, your customers and the wider community.

It’s an ethos that works. Flick is a respected people person with a passion for leadership, loyally supported by his senior leadership team – many of whom have been with him for over a decade. “With the support of the team I feel we can achieve anything and overcome any challenge.”

Having come from what could be described as a disadvantaged background, growing up in a London inner-city area and with no formal education, Flick has faced his fair share of societal and discriminatory challenges.

At 16, he walked away from the chance of a scholarship in the RAF to work in retail, a sector that afforded him early exposure to the concept of commission. He quickly identified the opportunity in the burgeoning communications sector, in particular, fax machines and following a highly successful career in office equipment sales, he spotted – as an early adopter – the emerging opportunity for growth in the business-to-business mobile sector as a highly proliferate market. “At that time, as mobile was still very new, and most businesspeople would buy mobiles from the few retailers that were popping up, I and my soon-to-be business partner and lifelong friend, Paul Butler, knew how the market would boom and realised that mobile was going to change the way we live and work forever.

But getting from that point to where he is today, hasn’t been easy.

“I was brought up in a single parent family, on a Lambeth housing estate and left school at 15 without qualifications. I thought I had it tough. But for young people today it is much harder than back then to break out and overcome the societal barriers that exist in today’s world.”

A self-starter and now running a team of 130 people from incredibly varied backgrounds, Flick is driven by a passion for diversity and a desire to provide people with opportunities. “Like me, many of the Olive team have fought adversity of some kind to be successful in their own right. We pride ourselves in having such a diverse and ethnically balanced team all of whom are committed and highly talented.”

Since joining Olive as CEO in 2013, Flick has pivoted the business from a mobile phone company to one of the UK’s fastest growing and most progressive managed cloud communications providers, forging partnerships with world players including Vodafone, Mitel and soon, Google Cloud.

In his first three years, turnover tripled to £32m, followed by a seismic shift of product mix more recently. The workforce has grown from 40 to 150, and the company has expanded nationally and at a global level. Headquartered in the UK in High Wycombe, Buckinghamshire, Olive now has offices in Glasgow in Scotland and Brisbane in Australia.

Cloud revenues have grown by 81% and its SaaS business has added hundreds of new customers in just three years, with the company boasting an enviable client list including Yorkshire Building Society, Laithwaite’s Wine, Countrywide, British Red Cross and Kennedy’s Law.

“The pandemic has affected and challenged nearly every business in some way but some more than others. Luckily at Olive, we’re not one dimensional, our cloud technology spans across telephony, mobile and contact centres for SMEs and Enterprise. That enabled us to pivot during the pandemic.

During the start of the pandemic, Olive released Connect4Teams, a suite of services to help organisations swiftly shift their workforce to remote working by offering direct routing, PBX integration, secure voice recording and contact centre capabilities – accessible from any location.

“We’ve seen how limited access to effective remote working tools and technology can bring on further stress and anxiety to employees trying to work from home against the backdrop of family and work commitments. Meanwhile companies were under enormous pressure to install months’ worth of technology in just days. So, through Connect4Teams we offered a fast and simple solution to an immediate problem.”

But with success comes social responsibility, says Flick. “Companies that have managed to pivot and do well during these challenging times have a responsibility to support and give back to the parts of society that are most affected.”

In November, Olive formed a long-term corporate partnership with XLP, a London based youth charity dedicated to creating positive futures for disadvantaged young people through education, mentoring, sport and the arts.

A cause close to Martin’s heart and aligned with his mission to ensure people are given opportunities, XLP help over 4500 young people a year living in inner-city areas of London who struggle daily with issues like family breakdown, unemployment, education failure or gang violence.

“Trying to get the break young people need to succeed today is tougher than ever, especially when you come from a deprived area. This hasn’t been helped by the pandemic which has had an even greater impact on those from underprivileged backgrounds, trying to deal with restricted movement, reduced social interaction in clubs and classes, and with “online” learning much harder to access for those already lacking resources and technology.”

As well as annual monetary donations, fundraising and donation of technology equipment, the Olive team will also be giving up their time to volunteer and train as mentors in support of the young people XLP work with.

“Throughout all the tragedy and uncertainty of COVID-19 there’s been significant moments of unity within society to combat this virus together, with ever greater acts of human kindness and appreciation for one another. I was really proud of the team’s enthusiasm to support XLP, many of who are coping with their own struggles with the pandemic. Without causes like XLP, the next generation of young people could so easily be overlooked without the right support.”

Flick’s ethos of putting people first has also been evident throughout the pandemic among his own workforce. “Leadership has been tested to the limit during the COVID-19 pandemic, with leaders having to make tough choices that they wouldn’t have foreseen at the start of the year. But companies that come out stronger will be those leaders that show empathy and emotional intelligence, who did what they could to take care of their workforce as much and for as long as possible.”

Virtual staff rooms, online personal training, financial advice line extended to wider family members, virtual cognitive behaviour therapy and bereavement counselling are just some of the employee services Olive offers for solidarity and support.

“Around 40 staff took advantage of the personal training and collectively lost 70kg. Those with children have access to an online kid’s club and a parents’ home schooling support group. We also run coffee mornings, lunch and learn sessions, and Friday cocktail happy hours to maintain our company togetherness.”

“The challenge for CEOs is balancing the need for sensitivity towards those that have been tragically affected by Covid such as the death of loved one or a partner’s losing their job, against maintaining a positive “digital” workplace that continues to motivate during these tricky times. This was especially the case for Olive with many of our staff working relentlessly during the pandemic to fast track projects to mobilise client workforces to ensure business continuity.”

“Giving back to society – whether that’s your employees or wider community – goes a long way. Your employees will not only truly appreciate the personal attention and support you’ve shown them during tough times, but you’ll come out the other side of the pandemic with a more united and loyal workforce that can grow your business when the time is right.”

How trust, not power, is increasingly the currency of leadership

Tue, 13 Oct 2020 14:15:39 GMT

As baseball great Yogi Berra once said, “The problem with the future is that it ain’t what it used to be.” And the future world of the CEO will be very different from the one in which most CEOs have learnt their current leadership skills. Before the pandemic, the converging trends of technology, diversity and Gen Y were already disrupting the industrial age way of working. Now, the pandemic is further accelerating our journey into a different paradigm. A paradigm which some have referred to as the social age.

In this social age of business, trust, not power, will be the glue that holds us all together. As Stephen Covey commented in his recent article, ‘The New Role of Trust in the Pandemic’ – ‘Leaders today should be deliberately extending trust to their teams, because the currency of trust is the single most important asset they have…Trust is baseline humanity and we need it to solve our problems.’ So as we make this transition from the industrial age to the social age, leaders will need to unpick the old habits of power and learn new habits of trust, because only trust can provide the level of psychological safety that the modern stakeholder demands.

In my own research on trust at Aston Business School, I interviewed over 70 CEOs and surveyed over 500 board-level leaders. What this research revealed was that the biggest single factor in building a high trust culture was the behaviour of the CEO and the senior leadership team. More worrying, it also revealed the average CEO believes they are 29% more trustworthy than do the people they lead. I refer to this difference as the ‘authenticity gap’ – the risk that we think we are part of the solution, while those we lead believe we are part of the problem.

Trust, like beauty, is in the eye of the beholder. Why does this matter? It matters because the final finding of my research was that over 80% of board leaders think a high trust culture is critical to attracting and retaining the top talent, building customer loyalty and achieving sustainable bottom-line performance.

Many of the CEOs I coach understand that the currency of their leadership is shifting from power to trust. The next question they ask is ‘how do I ‘DO’ trust?’. How do busy leaders break down this abstract, emotive word into a set of practical, tangible behaviours? Thankfully, I can now share with them an academically verified model of trust that consists of nine distinct habits grouped under three pillars. This model, arising directly from the research at Aston, is shown in the diagram.

Based on this model, the means of calculating the trustworthiness of your leadership, your team or your brand is shown in the formula;

‘Trustworthiness = ability x integrity x benevolence’

When I share this formula with the CEOs I coach, most instinctively understand the need for the six habits of ability and integrity, but few have a grasp of this word ‘benevolence,’ which means wishing well for others. Benevolence is human care, compassion and kindness. In the old world of power, benevolence was a nice-to-have. In the new world of trust, benevolence is the must-have differentiator that renews our licence to lead.

The three habits of benevolence are evangelise, be brave, be kind. These three habits are particularly important as CEOs look to satisfy the demands from investors to address Environmental, Societal and Governance concerns.

CEOs need to evangelise a vision for their businesses that goes beyond the single bottom line of profit and embraces the trip bottom line of profit, people and planet. They need to show kindness to recognise the needs of a diverse and inclusive world. For example, leaders now need to respond to the mental health needs of their employees in a way that would have seemed unimaginable 10 years ago. Finally, CEOs are required to be morally brave to speak out on issues of social justice. Whether it be the #metoo movement, Black Lives Matter or the recognition of the LGBT+ community, CEOs must have a voice on topics that would have previously been ‘off-limits.’

So are you one of these future CEOs? Do you have the will to renew your licence to lead in a world where trust not power is the currency of leadership? Can you do benevolence, alongside ability and integrity? If the answer to these questions is an emphatic ‘yes’, then you will be glad that the future ain’t what it used to be. You will be glad because, in the social age, you have found yourself in exactly the right place at precisely the right time.

How a Norwegian data centre has established itself on a global scale

Mon, 12 Oct 2020 11:50:53 GMT

The COVID-19 pandemic has shown how dependent modern society is on effective digital solutions and data centres are the backbone of this digital infrastructure. The global data centre industry is blooming, but at the same time the concern for industry’s CO2 footprint has risen to the top of the agenda. The cloud providers of the world do not only require more data capacity, they demand green data capacity. This is where Green Mountain and Norway comes into the picture.

Tor Kristian Gyland, CEO of Green Mountain

How has Green Mountain become so successful?
Ten years ago, we were a tiny organisation, in a non-existent industry in Norway, with a hole in the mountain where we wanted to build a data centre. Nevertheless, we managed to build a state-of-the-art facility and communicate our value proposition internationally. We have been one of the drivers behind the growth of the DC industry in Norway and we still give advice to newcomers in the industry. I also believe that the important technical groundwork we did in the early days, our focus on quality and standards, has paid off as we have experienced a massive growth.

What are the benefits of choosing Green Mountain as your data centre supplier?
Norway’s surplus of renewable energy at Europe’s lowest prices, the authorities’ beneficial framework conditions, and the realisation of several new fibre cable projects, form a strong value proposition. Sustainability is a key decision criterion for our clients and together with our focus on quality, we have built a strong reputation of reliability.

What is your company’s greatest asset?
Undoubtedly, the people. At Green Mountain, we have always emphasised getting the right people to do the right job. Their qualifications are important, but even more crucial is their ability to cooperate and develop together with the rest of the team. In this business, there are always new things to learn, innovate, and discover and we are dependent on the contribution and ideas from each and every member of our team. Sometimes we choose to improve incrementally in specific areas, other times we take greater innovative leaps. I believe we have built systems and a methodology to support this development, but we must remember that in the end it is always people who makes things happen.

How is Green Mountain tackling the challenges that face the industry?
The top three main concerns in the industry globally are:

• The concern for the environmental footprint of the industry.
• Power availability
• Skills shortage

However, in Norway we are blessed with abundant renewable hydropower and a robust grid, so we can basically cross the two first items off the list. Yes, there are still ways to improve energy efficiency and waste-heat re-use, but compared to the rest of the world, Norwegian data centres are the world’s greenest.

When it comes to skill shortage, we have yet another benefit. The Norwegian workforce is very tech-driven because of our extensive oil and gas industry. Now, as this industry is declining, we see a workforce of highly competent technical personnel and engineers shift to more sustainable industries – like data centres.

What’s next for Green Mountain?
Soon, we will open our third data centre facility outside the capital of Norway, and we are still growing at our original two sites. Furthermore, we have forecasted a growth of up to 200 MW within the next five years, so we are continuously exploring new sites for development. With clients like Volkswagen Group, MasterCard and international cloud providers, we have earned credibility in the business.

And with more and more clients focusing on sustainability, establishing in Norway makes sense from both an environmental and business point of view.

Top 5 ways to manage the board during turbulent times

Tue, 06 Oct 2020 09:53:12 GMT

The pandemic has fundamentally challenged assumptions, business plans and our views of business risks, rewards and opportunities. The impact of a health crisis that threatens to become the worst economic depression since World War Two is making boards of corporate directors nervous.

Some boards are embracing the challenge while others are uncomfortable as their cosy pre-retirement plan of serving on boards has just become far riskier and demanding than they ever expected. The assumptions around risks are being challenged in unforeseen ways.

The really good boards with high performing CEOs and managers have trusted management. These boards have stayed out of operational issues; using the time and opportunity created by COVID to focus on strategy and risk while assisting their CEOs with wise counsel and support

Yet, even before COVID, PWC’s 2018 CEO Success Study showed that “turnover among CEOs at the world’s 2,500 largest companies soared to a record 17.5% in 2018.” Now in a post-COVID world CEOs are under greater scrutiny than ever as boards grapple with gaining the best return for the risk being taken with the company’s capital, and in a world of increased uncertainty, changed opportunities, disruptive events and new technology. Some businesses will thrive in the new world while some will not – boards need to have confidence that CEOs can understand, respond and lead in times of change.

It is crucial that CEOs build a strong and healthy relationship with their board so they can manage their board during turbulent times, to achieve alignment and success. In this article, European CEO outlines its top five tips to help CEOs gain the best from their board in these different times.

Create clear expectations
The relationship between the board and the CEO is based on trust and respect. Take the time to talk with the board to ensure that you and your board have the same expectations. What will success and good performance look like in these different times? Clarify assumptions and recognise that clear, mutually agreed expectations between board and CEO are a recipe for success just as assumption and guess work may lead to disaster.

Work on a ‘no surprises’ basis
Surprises should be reserved for infatuated lovers and children; they have no place in the boardroom let alone in an effective relationship between the board and the CEO. Work on a ‘no surprises’ basis with your board. Be accountable for working this way and hold your board accountable for reciprocating the trust.

Be willing to field and to ask the tough questions
In a world of change and disruption you must be able to challenge and be seen to challenge assumptions and ask the tough questions about the business, its strategy and performance. CEOs need to be the leading light and, if you as leader of the company aren’t demonstrating leadership by asking those hard-hitting questions of the business, then fully expect the board to be asking them of you and questioning your leadership.

It’s all about the people
Our initial response to the COVID crisis was around the safety of our staff, customers and stakeholders. The initial focus on physical wellbeing has broadened to address the negative impact that this crisis is having on the mental health and wellbeing of our people. The COVID crisis has shown that some CEOs are guiding lights while some are simply lights. Think about your people, the strength of your top team. Think about the need to generate confidence and credibility with the board that you and your team have the bench strength to win in a world of different opportunities. Businesses are generating and destroying trust with the way they respond to COVID and work with their people. Mistakes made at this time will sear the culture of organisations and trust in boards and CEOs. Trust, honesty and openness through clear and regular communication with your board is critical.

Don’t waste a crisis
Necessity is the mother of invention. The need to move fast and break things in order to adapt and respond to a health and economic shock has heightened the pace of innovation. Successful CEOs have demonstrated a willingness to cut through inertia and make changes that will enable their businesses to move from survival to thriving in a different world. Think about what’s working well and what is no longer working. Bring you board on the journey of the changes to people, processes, tools and technology that will enable your business to thrive under your leadership.

Top 5 ways to create a family-friendly work culture

Thu, 24 Sep 2020 04:00:17 GMT

It’s a commonly held belief that career success and a happy family life don’t come hand-in-hand. To prosper in business, a person has to sacrifice evenings with family and drop domestic responsibilities – or so goes the narrative that’s still heavily prevalent narrative within the corporate world.

But this doesn’t have to be the case. In fact, there is plenty of evidence to suggest that, when employees achieve a healthy balance between work and home, their professional life benefits.

A family-friendly work culture also benefits companies themselves. For one thing, respecting and supporting employees’ right to spend time with their families is a powerful retention tool. But it can also make employees more engaged and productive. Research conducted by the International Centre for Work Family at IESE Business School has found that people in family-friendly work environments perform up to 19 percent better than those who aren’t.

For many employers, this year’s work-from-home experiment has demonstrated the importance of allowing employees to dedicate more time to family life. Some are adapting as a result. The German company Siemens is allowing employees to work from home for up to three days a week and, according to research by the Ifo economic institute, just over half of German companies want to follow its lead. Clearly, a growing number of companies are taking this moment to improve their employees’ work-life balance. European CEO outlines five ways businesses can build a more family-friendly work environment moving forward.

Flexible working
As the Siemens example suggests, the coronavirus pandemic has prompted many employers to consider permanently adopting remote working practices. Studies suggest that many workers would support this. Communications consultancy the Gorssman Group has found that almost half of US employees surveyed said they wanted to continue working from home after the pandemic.

Remote working and flexible working hours could benefit parents in a number of ways, allowing them to spend more time with young children, fulfil more family obligations and also reduce childcare costs. Flexible working can be especially beneficial to women, who still end up taking on the brunt of domestic responsibilities in many families. The 2014 Corporate Leadership Council report found that workplace flexibility increased women’s career aspirations by almost 30 percent.

Switching off an “always-on” culture
However, employers should proceed with caution before embracing a flexible working culture. The pandemic has revealed that working from home can push employees to work longer hours, which in turn can increase the risk of stress and burnout. Technology is, of course, partly to blame here; according to the 2020 Modern Families Index, 47 percent of working parents believe that technology has blurred the boundaries between work and home.

There are a number of ways that companies can help their employees establish more of a work-life balance. One method could be using a business communication platform like Slack for work-related messages, instead of a more casual messaging platform like WhatsApp, to give employees the option of “switching off” once the working day is finished.

Elderly care programme
Many countries’ populations are ageing rapidly and this means an increasing proportion of employees will be faced with caring for elderly relatives at some point during their careers. This experience can be both time-consuming and emotionally draining for workers.

While the issue may seem like a very personal one, it can have a significant bearing on a person’s professional life. MetLife estimates that elderly care costs companies $34bn a year due to absenteeism and lost productivity.

By supporting employees through an elderly care programme, companies could lessen the burden of looking after older relatives. Depending on what seems appropriate, the programme could offer information about elderly care services, geriatric assessments or workplace support groups.

Paternity leave
When it comes to work-life balance, the discussion tends to focus on women and how they can benefit from devoting more time to family. But it’s just as important that men enjoy this benefit as well.

The rate of men taking paternity leave has rapidly increased over the last few decades. Last year, the European Parliament announced the establishment of 10-day minimum paternity leave across the EU.

Firms should consider implementing longer and more robust paternity leave programmes to meet the needs of fathers-to-be. At Netflix, new fathers can take up to one year of paid parental leave. Meanwhile, Facebook gives fathers four months’ leave that can be taken in instalments in the first year of the child’s life.

Childcare
When it comes to childcare, few companies offer much by way of support. According to the Society for Human Resource Management’s Employee Benefits 2019 survey, only 4 percent offer a subsidised child-care centre or programme for their employees.

Childcare has proven particularly difficult to arrange during the pandemic, when many nurseries have had to close their doors temporarily, leaving parents to cope on their own. Employers are well-[ositioned to step in to fill the vacuum, and some already have. Google, for example, extended its paid family caregiver leave policy by eight weeks in the wake of the pandemic.

Other forms of support employers can offer include discounts on childcare-related products such as car seats, toys, games and educational material. Employers could also allow a portion of employees’ salaries to go towards a car, additional holiday or other benefits.

EU travel industry urges governments to rethink restrictions

Fri, 18 Sep 2020 10:20:17 GMT

Groups in the travel industry have called on governments to re-examine current travel rules in order to bring much-needed economic relief to the battered sector. In a letter dated 17 September, the industry groups urged governments to end quarantine requirements and adopt coordinated restrictions and testing instead.

The letter was signed by more than 20 trade bodies, representing over 5,000 companies and millions of employees working across the travel industry. According to Reuters, the letter pressed European Commission President Ursula von der Leyen to urgently resolve the “chaotic situation” unfolding in the world’s travel sector.

With coronavirus cases on the rise, many governments are continuing to add countries to their 14-day quarantine lists. Recently, Ireland moved to quarantine arrivals from Italy and Greece. Tourism figures argue that moves like are stymieing the industry’s chances of recovery. Ryanair cut its capacity by 20 percent for September and October, citing the increase in travel restrictions and the negative impact this had on bookings.

Earlier this month, the EU executive proposed a common “traffic light” system to coordinate travel restrictions among EU states.

Travel industry bodies believe this system must be put into effect to protect jobs and ensure the survival of companies. “Failure to fully implement the Commission’s proposal would kill any chances of a potential recovery,” the travel industry bodies wrote in the letter.

International travel bans and a steep drop in visitors have made the travel industry one of the hardest-hit sectors of the pandemic.

According to a recent report by the World Travel and Tourism Council, the European countries that are expected to see the biggest revenue losses due to COVID-19 are the UK, Germany, France and Italy. France, for instance, is set to lose €48bn in revenue by the end of the year and could lose two million jobs.

The rise of fractional ownership in luxury assets

Tue, 15 Sep 2020 09:10:31 GMT

There are many people for whom owning an Andy Warhol painting, a vintage car or a thoroughbred racehorse would be a dream come true. But it’s a much smaller group of people who can usually afford this kind of purchase. With fractional ownership, however, investors can now buy themselves a stake in a luxury asset at the click of a button and participate in an economy that was once reserved for the very wealthy.

Since the start of the pandemic, fractional ownership has surged in popularity. This has been driven partly by the cancellation of many betting events. Due to the coronavirus outbreak, everything from horse racing to snooker has been temporarily put on hold, pushing many traders online. But the sector’s growth is also a reflection of a broader movement towards democratisation in the investment world. And like other investment options that are part of this movement, it comes with its own risks.

A slice of luxury
Fractional ownership itself is not a brand-new concept. It’s more commonly been associated with private jets and real estate. That’s because assets like this are highly expensive not just to purchase but also to maintain. Ongoing costs for a private jet, for instance, include flight crew salaries, unforeseen repairs and aircraft insurance.

“Accessibility is the main benefit of fractional ownership,” said Yohann Libot, Head of Marketing and Communication at RealT, a real estate company that allows investors to buy a fraction of any given property. “It’s hard for most of the people around the globe to afford an entire house. But it also makes sense for the purpose of diversification; the more properties you own, the less risk you have. So with RealT you can buy many tokens of different properties, diversify and grow a bit more each month.”

It’s only in recent years that the investment idea has spread to the world of vintage cars, artworks, wines and even comic books. One of the companies using this model is Acquicent, a fractional-ownership start-up that specialises in vintage cars and fine art. “The classic car market and the art market perform phenomenally well, but 99.9 percent of people can’t access those markets,” said Anthony Citrano, CEO of Acquicent. “A few years ago it occurred to me that if we could find those willing to offer shares in their luxury assets in exchange for some liquidity, we wouldn’t be likely to have much trouble finding people who want to buy small pieces of them. With changes in the regulatory environment over the past few years, these kinds of transactions have finally become possible.”

One of those regulatory changes happened in the US in 2015, when the Securities and Exchange Commission increased the amount that companies could raise in “mini” initial public offerings to $50m. There are now dozens of companies operating in the space. Another example is Masterworks, sells shares of an artwork and then takes a cut of the profits once it’s sold at auction.

Of course, those who invest in these luxury collectibles are usually car enthusiasts and art admirers. But the main reason for their investment is the hope that luxury goods will appreciate over time.

“Several major classic car indexes have outperformed the S&P 500 for the last 40 years. Historically, these markets tend to be substantially decoupled from equities, so those who are seeking diversification from the stock markets would do well to consider them,” said Citrano. “There’s another angle too, which is that those who own the assets can offer shares in those assets while continuing to retain possession and a majority stake in the asset. It’s like a mini-IPO for a physical asset.”

The impact of the pandemic
Industry-wide data is limited. But the companies themselves report seeing a spike in interest during lockdown. Masterworks’ founder Scott Lynn told The Economist that the company has sold 15 artworks with valuations of at least $1m since the pandemic began. Meanwhile, Acquicent saw an 80 percent rise in the number of potential investors in the space of just three months.

There are several reasons why the pandemic has driven people into this niche corner of the investment world. “The apparent disconnect between the equity markets and the underlying economic reality makes some people cautious about the stock market. They want to diversify. The stock market is fantastic, but not everyone wants their investment portfolio to be 100 percent stocks,” said Citrano. “Another reason is that people are spending less money on travel, leisure and other pursuits, so they have excess cash and are looking for a place to invest it.”

A third factor is the shift to remote working, which has left many people with more time on their hands. “This gives some people more time to pursue passions such as classic cars and fine art, which in turn leads them to discover that there are now new ways they can participate in those markets,” said Citrano.

It’s this spare time – and the boredom it creates – that has driven younger generations to venture into trading for the first time while in lockdown. According to a study by E-Trade, more than half of investors under 34 say that their risk tolerance has increased during the pandemic.

The rise of fractional ownership could also be seen as part of the broader democratisation of the investment. Apps like Robinhood have made it cheaper and easier for ordinary people to trade, by removing commission costs and gamifying aspects of the trading experience. Such platforms have been accused of luring amateur traders into financially risky positions. Robinhood made headlines in June when a 20-year-old trader killed himself, after mistakenly believing he had racked up $730,000 in debt on the platform.

Taking a risk
Even though it may be much more affordable than owning the asset outright, buying a fractional share in a luxury item is still risky business. While fine art pieces can see their value shoot up – for example, Robert Rauschenberg’s Buffalo II was bought for $16,900 in 1964 and sold in 2019 for $88.8m with fees – there are also plenty of well-known artworks that have depreciated in value over time. In 2008, In 2008, works by the artist Damien Hurst had sold for $111m in a two-day auction. But experts at the website Artnet estimate that 17 of 19 the artist’s piece sold in the following decade then depreciated in value, with a total loss of $2.2m. Just because an artist was highly valued at one point is no guarantee their value will continue to grow.

But for those who dream of owning a yacht, or a Banksy or an Aston Martin, the risk will be worth it. Investing in a share of one of these items puts the lifestyle of the ultra-wealth suddenly within reach – but without the added hassle of clearing some wall space or emptying out the garage.

KKR-owned Hensoldt files for Frankfurt stock market listing

Tue, 08 Sep 2020 13:43:41 GMT

German defence company Hensoldt said on 8 September that it plans to list on the Frankfurt stock market later this year. KKR, the private equity firm that owns the company, will sell shares in the initial public offering.

The offering was originally planned for spring 2020, but market turmoil due to the coronavirus pandemic forced the company to delay it. According to Bloomberg, KKR is seeking a valuation of €3bn ($3.5bn) and new and existing shares worth 20 to 30 percent of the business will be listed on the stock exchange. This would make it the biggest IPO in Germany this year.

Hensoldt produces military sensors, radars, avionics and optronics. The company expects defence spending to increase around the globe as geopolitical tensions rise and as militaries invest in more technologically advanced solutions. In addition to military equipment, Hensoldt also offers solutions for border security, airport protection and wildlife protection.

Previously owned by Airbus, the company was bought by KKR in 2016 for €2.5-3bn ($3-3.5bn) including debt. In 2019, Hensoldt generated revenues of €1.11bn ($1.31bn). It expects this to rise to more than €1.15bn ($1.36bn) this year and reach between €1.14bn ($1.35bn) and €1.16bn ($1.37bn) in 2021.

During the pandemic, Germany’s economic outlook has been somewhat brighter than its European neighbours’. Whereas Spain recorded an 18.5 percent drop in economic growth in the three months leading up to June, Germany recorded a much lower contraction of 10.1 percent. This has given confidence to companies looking to go public and to investors seeking opportunities in the midst of Europe’s economic downturn.

Citigroup poaches Deutsche Bank’s top dealmaker

Tue, 01 Sep 2020 10:59:46 GMT

Citigroup announced on 1 September that it has appointed Robin Rousseau as vice chairman of investment banking for Europe, the Middle East and Africa (EMEA). This marks the end of Rousseau’s tenure at Deutsche Bank, where he was head of M&A for the same region.

Rousseau is the latest high-profile banker to be leaving Deutsche Bank after the German bank announced plans to radically restructure its business. Others who have recently left the company include Tommaso Zanobini, previously Deutsche Bank’s Head of Fintech, and Adam Bagshaw, its former co-head of corporate finance for EMEA, who left to join HSBC in June 2020.

The lender’s restructuring plan, which it announced in July 2019, involves cutting 18,000 staff and slashing equity sales and trading. Looking forward, the bank aims to focus on financing, advisory, fixed income and currencies.

So far, Deutsche Bank has had mixed success for investment banking revenues in 2020. Although it grew fees faster than European competitors in the second quarter, it was significantly slower than its peers in the first three months of the year. By comparison, Citigroup has seen its global M&A fees rise 9.2 percent so far this year.

Rousseau, who, in his 26-year investment banking career, has previously worked at Morgan Stanley and Goldman Sachs, first joined Deutsche Bank in 2017. In his new role, he will provide “strategic client coverage” with a particular focus on France, according to a memo from Philip Drury, head of Citi’s banking, capital markets and advisory business. Drury said that the bank would “continue to recruit top investment banking talent in order to lead both M&A and equity on behalf of our clients”.

Top 5 tips for a successful joint venture

Fri, 28 Aug 2020 04:00:30 GMT

Joint ventures are relatively unusual in the corporate world. Often involving shared management teams and long, drawn-out negotiations, they can seem more trouble than they’re worth.

But sometimes a new partnership can be the key to business innovation. Without NASA, Google wouldn’t have been able to create Google Earth. And when Sony joined hands with Ericsson, together they created one of the best-known providers of mobile devices in the world.

A joint venture can be particularly advantageous during a downturn as an alternative to a merger or acquisition. In this arrangement, two partners share business ownership, returns and risks. This can make it an effective method for navigating an uncertain business environment while also bringing new skills and perspective into each organisation.

However, in order to unlock these benefits, it’s crucial that businesses build a strong and healthy partnership. In this article, European CEO outlines its top five tips for a successful joint venture.

Shared objectives
The first thing a successful joint venture needs is shared objectives between the two parties. While this may sound easy to achieve, ensuring goal alignment is actually a part of the process that many companies neglect. According to research by McKinsey & Company, planners in a joint venture often spend less time discussing the structure and business model of the proposed entity than they do hashing out specific deal terms. Unless both parties are clear on the long-term goals of the alliance, there is sure to be conflict later down the line.

Due diligence
Joint ventures are time-consuming to set up. In fact, they can take longer to complete than even M&A negotiations. Business leaders should remind themselves of this when carrying out their due diligence; it’s not a process either party should rush.

Because a joint venture involves the integration of different business units, it’s crucial that each party knows what they’re getting into ahead of time. Before committing to a partner, businesses should take into account the other party’s corporate culture and decision-making style, its history with joint ventures and its operational capacity.

The right management team
Strong leadership is needed in any organisation, but it’s particularly important when two companies join hands. The different businesses should be careful to appoint highly effective leaders to deliver the new alliance’s objectives. These individuals will be the bastions of the partnership; they should therefore be vocal in their commitment to it and skilled at motivating the newly combined teams. It also helps to allocate the responsibilities of these leaders quickly and clearly to ensure the smooth delivery of the new business plan.

Understanding the market
One of the reasons a firm may enter into a joint venture is to gain access to a new market. Sometimes a joint venture may therefore mean operating in an unfamiliar country or region. Businesses should spend as much time familiarising themselves with this new market as they do with their prospective partner and be aware of the risks that accompany it. In addition, companies should ask themselves if there is a new market that, through their joint venture, they might be able to explore.

Culture fit
When bringing two cultures together, conflict is inevitable, even if the due diligence process has suggested that they should be compatible. This conflict can present a major threat to the success of the joint venture, since disillusioned employees may be tempted to find jobs elsewhere.

Rather than letting the culture of one company dominate, the two parties should be ready to embrace their differences. Before implementing the deal, the business should have a clear grasp of the differences between each organisation as well as a detailed plan on how to address any problems that could emerge as a result.

Tougher climate target is feasible for EU, researchers say

Mon, 24 Aug 2020 11:19:35 GMT

The EU can afford to get tougher on climate, researchers said on 24 August. As part of its strategy to achieve net zero emissions by 2050, the EU is aiming to reduce greenhouse gas emissions to 40 percent below 1990 levels by 2030. A new plan, which the European Commission will propose next month, could see that target raised to 55 percent.

In an analysis entitled “How to Raise Europe’s Climate Ambitions for 2030”, the think tank Agora Energiewende and the German research centre Oeko Institut said the new plan was both technically and economically feasible. They outlined how the EU could adjust its current policies in order to meet the goal.

The researchers said emissions covered by the Emissions Trading System would need to fall to 61 percent below 2005 levels. To achieve this, the EU’s carbon market must be reformed. For example, the researchers said that its cap on emissions should be reduced by up to 5.4 percent annually from 2025, up from the existing reduction target of 2.2 percent.

But the new target will only be approved if European nations can find agreement. While Western and Nordic countries are likely to support the 55 percent target, Eastern nations could present an obstacle. Poland and the Czech Republic, which are both heavily reliant on coal, have been the loudest voices in criticising the EU’s climate goals, arguing they cannot afford to make the contributions demanded of them.

However, the researchers pointed out that, without a bigger contribution from states like Poland and the Czech Republic, the EU would be unable to meet the 55 percent target. Therefore, they suggested that the EU earmark funds for low-income countries in its next budget, to help these nations build the infrastructure needed to reduce their carbon emissions.

Rainmaking CEO shares his secrets for growing innovative firms

Tue, 18 Aug 2020 11:00:44 GMT

Carsten Kølbek, CEO of Rainmaking, believes the corporate world has a problem with “innovation theatre”. Many businesses talk the talk when it comes to innovation, but few of them walk the walk. “We try to stay away from innovation for its own sake,” he told European CEO. “Instead, we try to focus on innovation that creates real business outcomes.”

According to the McKinsey & Company Global Innovation Survey, while 84 percent of executives agree that innovation is important to growth strategy, only 6 percent are satisfied with performance of innovatory programmes. There are multiple reasons why this might be the case: one of the most often cited is the lack of alignment between business goals and innovation.

Kølbek has made it his mission to create that alignment within businesses. A serial entrepreneur, Kølbek founded Rainmaking – a corporate innovation and venture development firm – in 2007. The company’s core objective is to create, innovate and scale businesses. In 2010, it created Startupbootcamp, one of the most successful start-up accelerators in the world.

Rainmaking believes that a company of any size and age can – and must – retain the spirit of entrepreneurship. For that reason, Rainmaking has expanded into corporate innovation strategy. Since 2010, the company has delivered over 100 innovation cycles, working with major brands including IKEA, Visa and Facebook.

Lessons for start-ups
When Rainmaking was first founded, the company had just a handful of start-ups in its portfolio. “We began with a blank sheet of paper, and then just started creating start-ups,” he said. “We were lucky enough to exit the first couple of start-ups and make some money out of that. And then we thought, what if we began giving back to the community and helping other start-ups? What if we took all the mistakes we had made, and then helped others to not repeat the same mistakes?”

Through Startupbootcamp, Rainmaking has now accelerated almost 900 start-ups. As such, Rainmaking has had plenty of experience working out solutions to the common problems faced by early-stage companies.

One of the most frequent mistakes entrepreneurs make, Kølbek explains, is clinging to the first idea they have. This was an error the Rainmaking founders made themselves on a number of occasions. “Too often, we got excited by an idea without actually validating whether it was meeting a real public need and whether it was in a growing market,” he said. “And then we ended up spending six to nine months being so excited only to go out into the world and find out that nobody else was excited about it.”

Another common problem is not getting the right people tied down early on. “When it comes to the core team, we’ve realised that you need to feel like the company just cannot cope without these people,” said Kølbek. Urgency can drive founders to make compromises, and the wrong people can seriously impede growth from the start.

Lastly, Kølbek believes that start-ups too often lack the persistence needed to really fulfil their potential. It’s easy, when a company IPOs for billions or achieves a dominant position in the market, to perceive them as an overnight success, but Kølbek is more than aware of the gruelling work they’ve had to put in behind the scenes. Once entrepreneurs understand this, he explains, it becomes much easier to stick it out for the long run.

“In the first couple of start-ups we created, we had this mentality that if things were not a success after six or nine months, we should just kill it,” he said, “which was a very naive and stupid idea. It took us some time to unlearn and find out that no, we either need to keep going at it or pivot and then try something else. And having that persistence and understanding is key to creating a real success.”

Scaling up
Having worked in the ecosystem of start-ups for several years, Rainmaking decided it was time to enter the big corporate world. With its corporate innovation programme, Rainmaking strives to give large companies the agility, creativity and rapid decision-making more often found in start-ups. These companies have the financial muscle to apply these learnings at scale. “That’s where I think a lot of the real magic starts to happen,” said Kølbek.

When helping businesses shape their innovations strategy, Rainmaking doesn’t operate like a traditional consultancy. “We strongly believe in co-creating the value with our clients and solving the problems together,” said Kølbek, “rather than us coming in as smart consultants and saying, ‘Hey, you know, just sit back and wait, and we will come up with all the clever stuff.’ We don’t really think it works like that.”

For this reason, Rainmaking is paid by business outcomes, not by time spent on projects. Having payment linked to the resource the company creates is a good motivator. “Then we are suddenly in the same boat; we have completely aligned incentives,” said Kølbek.

To foster a culture of innovation at a company, Kølbek believes that experimentation is key. Rainmaking encourages companies to get involved in a portfolio of different activities and start trying things out and embracing failure.

Kølbek believes that the innovation side of the business needs to be treated as its own separate entity. “If you don’t separate it, you cannot expect the innovation side to get the attention and the budgets it needs to actually happen,” he said. “Because if the innovation business is sitting inside the company – and there’s a big fight between the existing business and the new – the existing will all almost always win. There’s so much culture and incentives and bonuses linked up to the existing business that it hurts too much to cannibalise it.”

Kølbek explains that CEOs and managers can sometimes hinder the effectiveness of this programme. “Sometimes the top management get scared as soon as they make the first mistake,” said Kølbek. “They think they need to de-risk everything and put processes in place and make sure there’s a business outcome. And just like that, you’ve killed the culture. That is really where they need to prove that what they said initially that this is important and recognise that mistakes are part of our learning journey.”

The conviction of the top management team is one of the most important elements for success, Kølbek explains. Once senior leaders are on board with an innovation strategy, then the rest of the team has a license to get the right infrastructure in place. Kølbek told European CEO that this usually involves upskilling teams and giving them the tools, skills and mindset needed for innovation. After that, it’s a matter of practice makes perfect. “Just like you don’t learn to be good at cycling or playing football by just reading about them or being trained, you actually need to go out and practise,” he said.

Innovation meets sustainability
Today, Rainmaking has over 200 employees at 10 offices based across four continents. Even with so much experience under its belt, Kølbek admits that the company can still occasionally struggle to practise what it preaches. “Sometimes I think we can fall into the trap of thinking we know better and we know how to come up with the next generation of amazing solutions,” he said, “instead of going out and systematically asking the market: what are the problems? What are the needs? And based on those hard facts, then go back and come up with a new solution.”

With that said, Kølbek is confident that Rainmaking has a team committed to new ventures and organisational change. “Fostering an innovative culture is relatively easy in our case because we are lucky that almost all the people we attract to the company are entrepreneurs at heart,” he said. “We do consciously try to empower people to be creative, and we have a very high tolerance for failure and for mistakes.”

The coronavirus pandemic put that entrepreneurial spirit to the test. When the virus struck, almost all of Rainmaking’s projects were very hands-on with a lot of face-to-face client interaction. Suddenly, all of these projects had to move online. But Rainmaking had no blueprint for how that should happen.

“We had to say, ‘Hey, teams, we have a challenge. We need to keep existing projects running. So now please go and find a way to make all of them digital.’ And without any top-down input, all the teams just invented new ways of sharing project statuses using the company tools and solutions and best practice. And probably one of my proudest moments was when we realised that we had created not only a culture of innovation but also a culture where people felt they had the mandate to actually experiment and make mistakes along the way.”

Looking forward, Kølbek hopes the company will take on more ventures with a social and environmental purpose. It recently launched the SDG Compass tool, which helps businesses find start-ups they can partner with to address the UN’s Sustainable Development Goals. It currently includes over 2,000 start-ups, such as EO Charging, which designs and manufactures smart electric vehicle chargers and GrowUp Urban Farms, which grows food for local markets in London.

“We’re trying to focus on projects that combine doing something good for the bottom line with also doing good for the world,” said Kølbek. “Those are the kind of problems that we are most excited about.”

Innovation is critical not just for business growth, but also for addressing some of the most urgent problems the world faces. And it’s currently under-funded in the business world; Rainmaking’s own research shows that 25 percent of businesses said they would not be investing in innovation activity in April, up from 8 percent the month before. At a time when businesses are slashing innovation spending, it’s important to remember that no organisation can ever outgrow the need for entrepreneurial spirit.

US maintains tariffs on EU goods but holds off on threatened hikes

Thu, 13 Aug 2020 10:30:40 GMT

The US has chosen not to escalate its 16-year trade fight with the EU. On 12 August, US trade representative Robert Lighthizer confirmed that the Trump administration would maintain 15 percent tariffs on Airbus aircraft and 25 percent tariffs on other European goods, holding off on a threatened tariff increase on $7.5bn (€6.8bn) of European exports.

The tariffs, imposed last year after a World Trade Organisation (WTO) ruling, have soured relations between the US and EU. More than 100 items, including cheese, whisky and olive oil, now cost more to be imported into the US.

Lighthizer accused the EU of not having done enough to end the trade battle. “The EU and member states have not taken the actions necessary to come into compliance with WTO decisions,” said Lighthizer. “The US, however, is committed to obtaining a long-term resolution to this dispute.”

The feud, which has lasted 16 years so far, began as a dispute over unfair support for the aerospace industry. Both Boeing and Airbus received billions of dollars in unfair subsidies in events dating back to 2004, according to the WTO.

US tariffs were introduced after the WTO ruled that state aid provided to European aircraft maker Airbus was illegal and authorised US retaliation. This year, the US threatened to hike tariffs or impose the tax on new items such as salmon fillets and gin.

Its decision to hold off on this tariff increase has brought some relief to the EU. “The commission acknowledges the decision of the US not to exacerbate the ongoing aircraft dispute by increasing tariffs on European products,” an EU spokesperson said.

However, European trade bodies such as the French wine and spirits exports federation FEVS and the Scottish Whisky Association have voiced their outrage at the US decision to retain tariffs. As pressure mounts, the EU may be pushed to step up its efforts to resolve the dispute.

FirewoodFX guides traders to success in volatile market

Fri, 07 Aug 2020 04:00:22 GMT

When New York confirmed its first cases of COVID-19 in January 2020, US stocks tumbled. For the next few months, uncertainty continued to grow across global financial markets as the number of confirmed cases mounted. Then, on 11 March, the declaration of a global pandemic by the World Health Organisation sent markets into a full-blown panic.

This negative sentiment has made the forex market extraordinarily volatile this year. For example, take the two most popular currency pairs in forex trading: EUR/USD and GBP/USD. The average monthly range for EUR/USD is 250-350 Points in Percentage (PIPs) per month while GBP/USD is 600-700 PIPs per month. But in March, EUR/USD crashed to around 900 PIPs in the space of just eleven days. It rallied sharply at around 500 PIPs a week later. We saw the same pattern with GBP/USD, which tumbled to roughly 1800 PIPs in only eleven days and then rallied at around 1000 PIPs the following week.

This period of high volatility has a silver lining. Many of our clients at FirewoodFX have been able to use the volatility – and the extended range it has created – to their advantage. Remarkably, one of them even managed to book a 55,000 percent profit in the space of just a week. In short, our clients have been able to make superb returns during the instability of March 2020, thanks to FirewoodFX’s excellent liquidity and rapid execution.

A wise investment
Certain business sectors have been badly affected by the pandemic. Many organisations have seen their revenue streams hit hard as a result of lockdown measures and plenty of them have unfortunately had to make redundancies or shut down their operations.

But forex brokers have been largely unscathed. This is because forex trading can be carried out anywhere in the world. In fact, as our clients’ success stories demonstrate, trading forex is one of the most profitable things a person can do during lockdown.

This doesn’t mean there aren’t challenges that accompany today’s extreme volatility. For instance, markets have had very low liquidity during the pandemic. This can increase traders’ exposure to slippage, which occurs when currency prices change while an order is being placed. As such, traders are at risk of running into unwelcome surprises, unless trading is carefully handled by their broker.

FirewoodFX is well-placed to help its clients overcome this problem. We work with top liquidity providers in order to give the best price feeds for our clients. Moreover, our servers are hosted in Equinix’s NY4 data centre, a state-of-the-art financial facility that provides no requotes as well as very fast order execution in a matter of milliseconds. As such, our clients can enjoy the high levels of sophistication needed to navigate markets with low liquidity and high volatility.

Adapting to the new normal
The pandemic has reminded us all that good health is one of our most valuable assets. More specifically, it has reminded employers just how important their workforce’s health and wellbeing really is. At FirewoodFX, we support the #stayathome policy and have made it possible for our employees to work remotely.

When we first took this decision, there were some aspects of our business operations that needed adjusting. But thanks to our strong work ethic, innovative leadership and good communication, we have successfully transitioned to remote working and will continue to provide the best services for our clients in this new arrangement.

Another lesson the crisis has taught all of us is that nothing lasts forever. All businesses must be prepared to adapt in times of extreme pressure. Although we have no way of knowing when the crisis will end, one thing is certain: this new normal is here to stay. In order to survive, businesses must embrace digital transformation and make their operations more flexible while continuing to provide the best service to their customers. FirewoodFX is committed to doing exactly that. We will strive to ensure that we emerge from this pandemic even stronger than we came in.

The future of forex
The coronavirus crisis hasn’t just transformed the way we work. It’s also changed the global forex market more broadly. There has never been such strong turbulence in the financial world like that we are seeing in today’s crisis. All asset classes – from commodities to currencies – have experienced extreme volatility due to the pandemic.

Many experts predict that the economy will not recover quickly. It’s more likely that we will see prolonged economic turmoil which will force governments to continue issuing emergency measures. Accordingly, the global forex market shows no sign of stabilising. But, as we’ve discussed, there are opportunities here for those who are willing to find them.

As calm gradually returns to the financial markets, investors should continue to trade in forex. The forex market remains the largest and most liquid in the world, accounting for more than $3trn of daily trading. There are numerous trading strategies that can be applied in different market situations and the flexibility of forex trading is what has helped it become the biggest market in the world. We believe that traders or investors will always have a chance to become profitable, provided they educate themselves on forex and apply their learnings with high levels of discipline and good money management.

Employees work longer hours during the pandemic

Tue, 04 Aug 2020 11:31:08 GMT

According to a recent study of 3.1 million employees at more than 21,000 companies, remote working during the pandemic has led to longer days for many workers. By studying employee behaviour over two eight-week periods before and after lockdown, the researchers determined that the working day lasted 48.5 minutes longer while lockdown measures were in place. Employees also sent an average of 1.4 more emails each day while the number of meetings increased by about 13 percent.

The study, which is one of the largest of its kind so far, adds to a growing body of evidence that the working-from-home experiment has prompted many people to adjust their working behaviours. This could be attributed to the blurred boundaries between work and home, as well as employees’ paranoia around job losses.

The researchers from Harvard Business School and New York University looked at companies based across 16 cities in North America, Europe and the Middle East. They found certain differences in working patterns between geographies. For example, whereas the average workday length returned to pre-pandemic levels in a few cities, such as Los Angeles and Chicago, longer days continued in New York City and most of Europe.

There was one potentially positive takeaway from the study. While employees attended more meetings during lockdown, the researchers found that additional meetings were generally shorter.

The link between long work hours and psychological stress is well documented, so overwork during the pandemic is a potential concern for employers and public health officials. Financial difficulties and anxiety around catching the virus are only adding to employees’ worries. According to a survey by the mental health provider Ginger, almost 7 in 10 employees believe that the coronavirus pandemic has been the most stressful period in their professional career.

Renault posts record $8bn loss

Fri, 31 Jul 2020 04:00:38 GMT

Renault posted a record loss of €7.29bn ($8.58bn) in the first half of 2020 as the pandemic hammered the French carmaker’s ongoing recovery plans. Sales fell 34.9 percent and group operating losses stood at €2bn ($2.35bn) compared with an operating income of €1.5bn ($1.76bn) last year.

The company attributed its dismal results to the impact of the coronavirus pandemic. Global automakers were badly affected by lockdown, which forced factories to close and kept many potential customers away from showrooms and dealerships.

The disappointing performance of its partner Nissan also weighed heavily on Renault’s first-half results. Even before the virus outbreak, the partnership between Renault and Nissan was under pressure due to the arrest of the alliance’s leader, Chairman Carlos Ghosn, in 2018. The Japanese automaker’s financial results will only add more strain to the relationship. In the first and second quarters of the year, Nissan’s performance reduced Renault’s total net income by €4.8bn ($5.64bn).

“Although the situation is unprecedented, it is not final,” Renault’s new chief executive Luca de Meo said in a statement. “I have every confidence in the Group’s ability to recover.”

Already, the company has unveiled a major cost-cutting initiative. Over the next three years, it plans to slash costs by more than €2bn ($2.35bn), in a move that will lower production capacity by almost a fifth and lead to the loss of 15,000 jobs worldwide.

To strengthen its finances in the wake of the pandemic, the carmaker managed to secure a €5bn ($5.6bn) credit facility with the French government in June. The French state has also stepped in to aid in the auto industry’s recovery. In May, it announced heavy subsidies that it hopes will boost the adoption of electric and hybrid vehicles in the country.

Top 5 ways managers can support ethnic minority workers

Thu, 30 Jul 2020 04:00:10 GMT

In 1986, Brent Staples described how he came to terms with the realisation that white people perceived him as “suspect”. In his seminal essay, Just Walk On By, the writer explained the alienation he felt on a daily basis while navigating white pedestrians’ hostility towards him, and the meek persona he adopted to stay out of harm’s way. “I chose, perhaps unconsciously,” he wrote, “to remain a shadow—timid, but a survivor.”

Staples’ words are just as relevant today as they were in 1986. The killing of George Floyd by police officers in the US has prompted many people from ethnic minority backgrounds to reflect on the racism they experience in their day-to-day lives. Mark Mason, Chief Financial Officer at Citigroup and one of Wall Street’s most senior black executives, wrote on the company’s blog in late May that Floyd’s killing was a reminder that black people are often denied the “basic privileges” that white people enjoy. “I’m talking about something as mundane as going for a jog,” he said.

Racism, in any form, takes a significant toll on people’s wellbeing and, inevitably, on their work as well. While many companies – from Apple to Lego to Saatchi & Saatchi – have responded to Floyd’s death by proclaiming their support for Black Lives Matter, these statements can seem hollow when not backed up with action to make their workplaces more diverse and inclusive. Now more than ever, companies should ask themselves how they make their workplaces better for employees from ethnic minority backgrounds.

Take a stance
Many business leaders and managers probably assume that racism is not prevalent in their company. But their employees may tell a different story. The Twitter hashtag #BlackintheOffice, which was created to share stories of racism in the workplace, gives an insight into the covert and overt harassment that people from ethnic minority backgrounds can experience at work due to the colour of their skin.

Managers can’t guarantee that similar stories aren’t unfolding in their own teams. They should recognise the possibility of this in a company statement in which they also clarify that support is there for all employees. To give these statements more weight, managers should consider individually reaching out to non-white employees for their perspectives on how the company’s culture could be improved.

Listen and act
Perhaps the most impactful thing a manager can do is simply listen to their employees. Those from minority backgrounds may have complaints they’ve been afraid to report or ideas for inclusivity they’re worried will be ignored. It’s important managers invite this feedback and take it on board.

Managers should also be aware that this process will take time. Erin L Thomas, Head of Diversity, Inclusion and Belonging at Upwork wrote on Twitter that “taking on too much” and spreading themselves too thin is a common mistake of companies trying to improve diversity and inclusion at work. “It took me three months to uncover the ins and outs of Upwork’s Black employee experience,” she wrote.

Create safe spaces
Many studies have confirmed the link between racism and psychological distress. An event like George Floyd’s killing can be collectively traumatising for many members of the black community, triggering feelings of grief, anger and pain.

Safe spaces can help employees address these emotions with others who may be feeling the same way. Inevitability, workers may feel reluctant discussing emotional trauma with their direct line-manager. For this reason, managers should consider not participating in this discussion and leaving this up to non-white employees instead.

It is worth bearing in mind that every individual is different in terms of how much support they require. It might be worth offering counselling sessions for any employees who feel they need it.

Promote anti-racism
Supporters of the Black Lives Matter movement often state that simply being “not racist” is not good enough. Ibram X Kendi, author of How to be an Antiracist, distinguishes between a “not racist” and an “anti-racist” in the following way: “One either allows racial inequities to persevere, as a racist, or confronts racial inequities, as an anti-racist. There is no in-between safe space of “not racist.”

For an organisation to be truly inclusive, white employees must be allies to people from ethnic minority backgrounds. It’s important that managers provide their white employees with the resources necessary to understand how they can do this. A good first step might be setting up an expert-led discussion on what it takes to be actively anti-racist.

Set measurable goals
To create lasting change in response to the Black Lives Matter movement, those in management positions must make themselves more accountable for the progression of diversity and inclusion in the company. Some firms have taken particularly big steps to ensure this happens; one organisation in Ohio in the US links its top executives’ annual bonuses to diversity goals. Other methods include publishing the company’s diversity metrics and sharing how many underrepresented employees the organisation hires, as well as how many are promoted, in order to incentivise change.

No one gesture will serve as an appropriate response to this year’s protest movement. But by taking repeated actions and measuring their progress, companies can make the changes needed to create a more supportive and inclusive workplace.