What could possibly be more important than a company's financials?
Many companies can get the financials right but the ones I want to invest in are the ones that get people management right. That is where huge amounts of money can be won and lost, all behind the scenes.
Take, for instance, an anonymous UAE company that gathers pages of news coverage about its stock price.
Commentators on Dubai's talk radio station will dedicate 10 minutes of a 30-minute broadcast to interviews discussing its asset allocations and strategic decisions.
This particular business comes to mind for me because I happen to deal with them on a semi-regular basis. The last time I was at one of their locations, I observed a somewhat tattered sign reading "Employee Stress," near the worker area, followed by 10 not particularly great suggestions for dealing with on-the-job stress.
The American Institute of Stress reports that 40 per cent of employee turnover is due to job stress and it costs up to 150 per cent of an employee's salary to replace them.
Stress also leads to lost productivity, absenteeism, poor performance, health problems and other issues to such a degree that in the US alone it is estimated to cost employers US$300 billion (Dh1.1 trillion) annually.
So this job stress problem is not simply something to complain to one's spouse about. It means money down the drain.
Now it could be that this particular company has a fantastic stress-management programme and a state-of-the-art strategy for dealing with employee stress.
But first of all, the aforementioned sign was in two languages that are not the primary ones for any of the workers in the room where it was hung.
As culture and cross-cultural issues are among my main areas of expertise, I found this particularly noteworthy. It is emblematic of an issue this company and many other companies in the area have failed to address that significantly adds to the burden of employee stress: the issue of managing multicultural workplaces.
Perhaps many employers just think there is nothing they can do; others may assume if they ignore the problems they will go away. Neither could be further from the truth.
There are solutions to manage multicultural work environments, but companies have to be willing to dig deeper than a one-day workshop or a radio programme I heard with a consultant who seemed to have invented his own set of cultural values, despite the fact that the subject has decades of research with well-established indexes.
Just because someone has a consulting service and is well spoken does not mean paying them will do anything for your business.
Aside from the huge matter of cross-cultural issues, the company has workers insufficiently trained to carry out their jobs and employees working longer than 12-hour shifts, both of which obviously seriously raise stress levels.
Stress management is not necessarily the place I would start at if I had to list the top management issues I had observed in the UAE, but that is not the point. The cost of stress is easily quantifiable so it makes a good illustration.
The issue is that companies often forget the cost that management mistakes mean for their bottom line. Often, problems of management and organisational issues can lead to many more lost dirhams than questions such as whether the stock price today is up or down.
The point is not to demonise this particular company but to point out how little the stock price tells you about what may or not be happening organisationally in the business in which you invest.
For instance, take the issue of performance and motivation. A bayt.com survey of employees in the Middle East in January this year found 28 per cent received no performance review at all, and of those that did, 50 per cent received no real feedback on how they are doing.
Not only does this indicate huge possible productivity losses, but it also means that most firms have no strategic human resource management system in place.
In terms of motivation, anyone who has worked in an office environment can tell you that it is quite easy to imagine people getting by at 50 per cent productivity or less for quite some time, with nothing happening to them even if there are performance management systems in place.
Without them, what possible incentive do employees have to increase their work efforts?
More to the point, do you want to invest in a company that is hiring people and paying them not to work? Well, if you are investing in companies without such systems that is precisely what you are doing.
Is your company a good investment? Think about how you are allocating and managing not just your financial capital, but your human capital. If you aren't getting returns, then you're not doing your job.
If you're an investor, buyer beware.
Susan Crotty is an assistant professor at the Dubai School of Government
UAE currency: the story behind the money in your pockets
How Voiss turns words to speech
The device has a screen reader or software that monitors what happens on the screen
The screen reader sends the text to the speech synthesiser
This converts to audio whatever it receives from screen reader, so the person can hear what is happening on the screen
A VOISS computer costs between $200 and $250 depending on memory card capacity that ranges from 32GB to 128GB
The speech synthesisers VOISS develops are free
Subsequent computer versions will include improvements such as wireless keyboards
Arabic voice in affordable talking computer to be added next year to English, Portuguese, and Spanish synthesiser
Partnerships planned during Expo 2020 Dubai to add more languages
At least 2.2 billion people globally have a vision impairment or blindness
More than 90 per cent live in developing countries
The Long-term aim of VOISS to reach the technology to people in poor countries with workshops that teach them to build their own device
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Crime%20Wave
%3Cp%3EHeavyweight%20boxer%20Fury%20revealed%20on%20Sunday%20his%20cousin%20had%20been%20%E2%80%9Cstabbed%20in%20the%20neck%E2%80%9D%20and%20called%20on%20the%20courts%20to%20address%20the%20wave%20of%20more%20sentencing%20of%20offenders.%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3ERico%20Burton%2C%2031%2C%20was%20found%20with%20stab%20wounds%20at%20around%203am%20on%20Sunday%20in%20Goose%20Green%2C%20Altrincham%20and%20subsequently%20died%20of%20his%20injuries.%3C%2Fp%3E%0A%3Cp%3E%26nbsp%3B%E2%80%9CMy%20cousin%20was%20murdered%20last%20night%2C%20stabbed%20in%20the%20neck%20this%20is%20becoming%20ridiculous%20%E2%80%A6%20idiots%20carry%20knives.%20This%20needs%20to%20stop%2C%E2%80%9D%0D%20Fury%20said.%20%E2%80%9CAsap%2C%20UK%20government%20needs%20to%20bring%20higher%20sentencing%20for%20knife%20crime%2C%20it%E2%80%99s%20a%20pandemic%20%26amp%3B%20you%20don%E2%80%99t%20know%20how%20bad%20it%20is%20until%20%5Bit%E2%80%99s%5D%201%20of%20your%20own!%3C%2Fp%3E%0A
