How much do you value your employees?
The lifeblood of every business is its employees. Given this critical fact, you may assume every business has a detailed plan and solid processes in place to ensure employees are engaged. Unfortunately, this is generally not the case. Many companies continue to assume that if they build a good product or offer a good service, and if customers continue to buy those products or services, then employees should be happy.
Employers typically do just enough to ensure the majority of employees don’t leave; they train just enough, they offer just enough benefits, and they give just enough positive reinforcement. Is this the right way to approach employee loyalty?
Consider these two startling facts:
• Each year the average company loses 20-50% of its employee base
– Bain & Company
• Replacing a lost employee costs 150% of that person’s annual salary
– Columbia University
Because the cost of replacing employees is so high, and the fact that so many continue to leave, businesses who effectively manage the employee engagement process can turn these facts around, making these burdens a strength. They can realize increased productivity, happier employees who willingly promote the business, and eventually, greater profits and other positive business outcomes.
As an employer, you need to understand why your employees are emotionally connected to your business – and it’s generally much more than salaries, training, or benefits.
Research shows that emotionally connected employees are the best employees because they are engaged and productive, and they feel validated and appreciated.
The opportunity exists for businesses to manage engagement just like they manage other areas of their business. It’s not impossible today, with the right technology and best practices.
I hope this information will give you ideas and motivation to want to engage your employees more. Ultimately, with engaged employees, everyone wins.
To increase the loyalty and engagement of your employees learn and follow these basic principles and action items.
Engaged employees are the best employees
An engaged employee is a person who is enthusiastic about their work. Improving employee engagement directly impacts measurable business outcomes. Employees who are committed to success, emotionally attached, and socially involved with a company demonstrate qualities that business managers thirst to have. Engaged employees are more productive at work, take less sick days and exhibit other favorable behavior, promote the business to others and show their happiness to customers. In short, engaged employees are the best employees.
Employee engagement makes a difference
Engaged employees bring a competitive advantage to a business for several reasons. An engaged employee is less likely to leave, leading to substantial cost savings for your organization in terms of recruitment and training. Engaged employees demonstrate improved performance as individuals and teams. Furthermore, engagement increases the consistency in team performance from day-to-day and month-to-month. Also, engaged employees enable a “skill-liquidity,” – an ability to adapt skills to changing business needs – that improves a company’s flexibility to evolve and capitalize on new business environments.
Tim Hendon, a leader from a prominent Washington-based credit union, faced an unanticipated problem. A new loan network partnership provided loans with a high likelihood of debt default. Over time, these bad loans burdened his group and cost the company lost profits. He devised a plan to solve the problem capitalizing on the skills and engagement of his employees; their passion for the company and their desire to want to solve problems was an asset he could use. It worked. He attributed his debt recovery team’s success to two factors. First, the engagement level of his star performer whose attitude inspired an environment of friendly competition. Second, his team eagerly adapted new technologies to facilitate immediate debt payment. In two years, the debt recovery team slashed the auto loan delinquency ratio in half, turning a money loser into a profitable business unit. Their success turned into national recognition in collections and remarketing.
You can manage employee engagement
Employee engagement can be improved by aligning the goals of the business with the goals of the individual. Employee motivation should be associated with traditional rewards, such as pay and compensation, but also with emotional rewards such as personal growth, working for a common cause, being part of a high-performance team, and being recognized for achievements.
You can make dramatic improvements in your employee engagement
Through management of engagement, you can increase the loyalty of employees, but how you need to know what drives engagement and why employees are emotionally connected to you?
Four primary drivers of engagement can help you conceptualize and break down employee engagement into its causes and effects. Research by Allegiance loyalty experts Dr. Gary Rhoads and Dr. David Whitlark concludes that there are four primary areas of emphasis which are critical to understanding why employees are emotionally connected to a business. They are: being helpful, feeling competent and improved, feeling accepted, and feeling respected.
The following sections describe these drivers of engagement, and what specific tactics can be done to improve them.
Principle: Start by measuring employee engagement
The process of measuring employee engagement can range from very simple to very complex. Measuring your employee’s passion about work and the work environment can be as simple as issuing a survey with a few scaled questions around the ideas of:
• Job satisfaction
• Productivity
• Quality of peers
• Likelihood to change jobs
• Likelihood to recommend company products or services
• Likelihood to recommend as a great place to work
• Satisfaction with compensation & benefits
1. Use a Likert Scale
Using a scale of agreement (or Likert Scale), a survey can express quantitative measurements of your employee engagement. Often times, gathering open-ended comments along with numerical, scale data yields a rich source of inexpensive opportunities to make employees happy.
2. Gather Compliments
By gathering compliments in addition to concerns, companies can find out if their engagement efforts make a meaningful, lasting contribution to employees. Consider the following anonymous compliment and complaint printed verbatim:
“My manager is very proactive in discussing my abilities and goals with me and we arrive at a goal together; one that is realistic and achievable.”
“I bothers me that our customers get better benefits with their accounts than we do as employees. Everybody makes a mistake once in a while with their accounts; it’s unbelievable that an employee gets two overdraft reversals in a lifetime.”
These two feedback items helped a business confirm the effectiveness of its management program and work on moral boosters for its employees. Engagement is most effectively measured both quantitatively through scaled questions, and qualitatively through open-ended comments.
Principle: Promote and manage “Being Helpful”
Employees want to feel like they are making a positive contribution. An apathetic employee just works for a paycheck, but an engaged employee perceives their job as important. Being helpful means that whether in a front-facing, retail environment, or in the back office, employees feel like they are making a difference.
‘Being helpful’ means that employees can take pride in delivering outstanding quality, service, and value. It means that jobs make good use of employee skills and abilities.
It means that employees are empowered to solve customer problems. To increase ‘being helpful’ at your work, try these two things:
3. Help employees see the big picture
Help your employees to see the big picture, how they contribute to a functioning whole. A ‘chain of customers’ exists from the bottom of the organization up to the top. Where outward facing employees serve a customer, supervisors must serve and empower retail employees, managers must serve and empower supervisors, and so on up to corporate presidents who must serve and empower vice presidents.
4. Use secret shoppers
Use secret shoppers not just to grade service delivery but also to measure front-facing processes. Is it simple for customers to do business with you? Chances are your secret shoppers can find process gaps and that retail employees know how to solve the issue. Empowering employees to provide first-class service delivery will make employees feel like they are being helpful.
Principle: Your employees must feel confident and improved
Employees want to feel like they can do their assigned job confidently, that their future is secure, and that they are progressing in their own personal life goals. It surprises me how often company managers slash training budgets to save costs, not knowing that both service delivery and morale suffer from inadequate training.
By facilitating career advancement and opportunities to improve skills through training, employers can improve their employee engagement. An employee who is feeling confident and improved by the organization actively promotes the organization to others.
5. Close training gaps
Make sure there are no major training gaps in your organization. Training should be up-to-date. Make sure employees know about training opportunities. Some sophisticated organizations have a Learning Management System in place to measure training and results.
6. Mentoring program
Train and encourage seasoned employees to be mentors. A mentoring program can facilitate dynamic skill growth throughout an organization. Informal learning can be as important as formal learning programs.
Principle: Help employees feel accepted
Employees must be accepted as contributors by their peers at work. Teams may encourage a challenging but supportive environment. Organizational behaviorists of yesteryear recommended that we reduce stress at work to improve engagement.
New research says that stressful environments can be healthy, provided that employees are passionate about what they do.
Strong, loyal teams provide one level of acceptance, and teamwork between departments provides another. Furthermore, adequate benefits programs will enable employees to feel accepted by the organization, not expendable. Employees who become more engaged through increased acceptance will share a common bond of beliefs and purpose about the organization.
7. Promote team building
Encourage team building activities among employee groups. Some managers see the intangibles of team building as a pointless waste of time. However, there are well-documented benefits to creating trust and acceptance among work groups. Team building activities don’t have to be expensive. Inexpensive ideas for trust building activities are available through a simple web search.
8. Build a supportive environment before addressing compensation complaints
Sometimes dissatisfaction with wages merits investigation. But often, dissatisfaction with wages and benefits masks problems that relate back to acceptance by a team or manager. Often employees voice any problem in terms of a compensation issue. Employees may need appropriate coping skills, problem-solving skills, tactics for handling difficult situations, or help expressing their own personal feelings.
Principle: Employees want to feel respected
“Employees don’t leave their job, they leave their manager” is the mantra heard for many years in Human Resources circles. To feel respected, employees should feel like the company regards them as an important asset. Employees should feel like their manager has realistic expectations about what they can achieve. And, managers must be fair and even-handed. In my experience, nothing makes employees angrier than seeing a peer receive special treatment when they’ve broken the rules or have not been performing. Managers have the special role of enforcing company policy while at the same time removing barriers and excuses for employee performance.
9. Don’t be afraid to tell them the truth
Respect your employees through degrees of transparency. Communicate how your business is really doing at least quarterly or semi-annually. Give your employees confidence in the future and information to understand shifts in corporate policy due to your economic or competitive environment.
10. Retrain or get rid of bad managers
One bad manager can pollute multiple layers of an organization. Your most talented employees will be the first ones to leave in the face of poor management. I have seen situations where poor managers bring down the morale of employees, which in turn spills over to the engagement level of customers and ultimately reflects poorly in that group’s performance and profits.
11. Recognize employee contributions
Recognition from a supervisor at least two ranks above an employee makes a meaningful, engaging difference in employee morale.
Let technology help you manage engagement
Utilize technology to help you understand the heart and mind of your employees. Don’t try to figure it all out in a single annual survey, or through a feedback email link you put on the company Intranet. You need to collect feedback often, and in all possible collection points, both solicited and unsolicited. Then you need to really listen and respond to what is submitted. This creates a win-win relationship. A word of caution, Allegiance has learned through years of collecting and managing feedback for businesses in every industry that most employees are skeptical of any feedback system that is offered by their own company. They fear their submissions will not be confidential, so they don’t submit truthful information, or they don’t submit anything at all. That’s one of the reasons Allegiance has been so useful for so many companies; employees know we are a trusted third-party offering them the chance to submit feedback in complete anonymity.
Understand the ‘heart and mind’ of employees
To really know the heart and mind of customers, you should ask them questions that draw out truthful answers to the 4 topics we just discussed: being helpful, feeling confident and improved, feeling accepted and feeling respected. You should ask these questions regularly to a small subset of your employees and you will bring to life the employee engagement level at your business. You will truly know what makes them emotionally connected to your company, spot trends, and become empowered to be proactive instead of reactive.
LaMalfa, Kyle. “The Top 11 Ways to Increase Your Employee Loyalty.” Kyle LaMalfa., 2007. Web. 29 Nov. 2014.
Tuesday, May 12, 2015
Sunday, March 1, 2015
March 1st is the Deadline for Submission of Anti-money LaunderingReport by Companies
In awareness announcement, Capital Markets Authority emphasized the importance that licensed persons and the entities concerned with the application of the provisions of Law No. 106 of 2013 should peruse its Instruction No. (CMA/SD/MD/2013/4) regarding anti-money laundering and combating of terrorism financing, which was issued on 17/07/2013 and act according to the content thereof in general.
CMA stated: Capital Markets Authority reminds all persons concerned with the application of the aforesaid Instruction that they are required to prepare an annual report pursuant to paragraph (4/e) of Article (22) of such instruction, which requires the licensed person to prepare an annual report and submit the same to the Board of Directors of the licensed person. Such report should include all measures and actions taken to implement the internal policies, procedures and controls, and any suggestions to enhance effectiveness and adequacy of such procedures. A copy of the required report should be submitted to Capital Markets Authority not later than 1st of next March, in enforcement of the requirements under Circular No. 1 of 2015 issued on 07/01/2015.
Capital Markets Authority expressed its anticipation that the licensed person will comply with the content of such instruction in order to avoid the disciplinary actions as set forth in Law No. 7 of 2010 on the Incorporation of Capital Markets Authority and Regulation of Securities Business and the Executive Regulation thereof without prejudice to any stricter penalties set forth under Anti-money Laundering & Combating of Terrorism Law or any other relevant laws.
CMA stated: Capital Markets Authority reminds all persons concerned with the application of the aforesaid Instruction that they are required to prepare an annual report pursuant to paragraph (4/e) of Article (22) of such instruction, which requires the licensed person to prepare an annual report and submit the same to the Board of Directors of the licensed person. Such report should include all measures and actions taken to implement the internal policies, procedures and controls, and any suggestions to enhance effectiveness and adequacy of such procedures. A copy of the required report should be submitted to Capital Markets Authority not later than 1st of next March, in enforcement of the requirements under Circular No. 1 of 2015 issued on 07/01/2015.
Capital Markets Authority expressed its anticipation that the licensed person will comply with the content of such instruction in order to avoid the disciplinary actions as set forth in Law No. 7 of 2010 on the Incorporation of Capital Markets Authority and Regulation of Securities Business and the Executive Regulation thereof without prejudice to any stricter penalties set forth under Anti-money Laundering & Combating of Terrorism Law or any other relevant laws.
Wednesday, January 14, 2015
Managing fast and slow in a world that keeps accelerating
When it comes to competitive emailing, Sir Martin Sorrell, chief executive of marketing services group WPP, sets the bar high. Send him an email and he will probably reply within minutes.
When your boss sets the pace of work at warp speed, you will be expected, presumably, to match their haste. Jamie Dimon, chief executive of JPMorgan Chase, routinely tells his employees that their success depends on replying to emails the same day.
But is fast always good in running a business? What do you need to do slowly? And how can you simultaneously manage fast and slow?
We have no choice but to match our own pace of work to the demands of a superfast globalised business world, argues Sir Martin. “You have to be responsive; you shouldn’t attempt to fight it or slow the pace down.”
The increasing emphasis on short-term results from global investors demands speedy action. “It’s better to have a suboptimal decision on Monday and take advantage of being the first or second mover, than to take the time to gestate and have a superior decision on Friday,” he says.
Though he enjoys the pressure to keep up with instantaneous communication, he laments its attendant superficiality. “Things are done quickly without as much thought as may be advisable,” he says.
Tamara Heber-Percy, co-founder of boutique travel business Mr & Mrs Smith, agrees that the relentless acceleration of technology has made every second count. “If your app doesn’t load in four seconds, then that customer is gone,” she says. The feeling of needing to be constantly on your toes has been exacerbated by social media, she adds.
We are indeed under pressure to do things more quickly and many of us work hard to answer every request as fast as possible, says Julian Birkinshaw, professor of strategy and entrepreneurship at London Business School.
“The dominant rhetoric is of accelerated change,” he says. “And because the rate of change in the outside world is perceived to be getting greater, the assumption is that we should do so on the inside, too. Sometimes this creates problems, for example email traffic for its own sake.”
Every business needs both fast and slow, he adds; the problem comes when there is too much of one and not enough of the other. “There are two different speeds underlying any business but some organisations default to fast and some to slow. You have to go out of your way to change that speed.”
Ms Heber-Percy has learnt first hand the merits of both fast and slow management. Established in 2003, Mr & Mrs Smith has 110 employees and three offices worldwide. Like any new venture, it started at an adrenalin-fuelled pace but has slowed as it has matured.
“With this amount of people relying on you, you can’t go at the breakneck speed of a start-up,” says Ms Heber-Percy. Decisions need to be well thought out because the business can no longer afford to make the kind of mistakes — especially technical ones — that a start-up might tolerate.
“Slow makes fast happen,” she says. “We do things fast but well for our customers because the technology has been well thought out. We can surface the right information at the right time.”
Regularly stepping back from the fray means serious thought can be given to the strategic direction of the business. One of Ms Heber-Percy’s regrets is that the company did not create an advisory board sooner. She and her colleagues were reluctant to take on advisers from the very industry they were trying to disrupt but, “it should have been about slowing down and listening to people who have experience”, she says. Time-consuming mistakes could have been avoided.
Sarah Wood, co-founder and chief operating officer of UK marketing technology company Unruly, agrees that business should not always be done as quickly as possible. “We’re a high- growth business but it’s not a 100 metre sprint, it’s a marathon,” she says. “There are moments when you need to do fast but planned agility is paramount.”
This means that, like Ms Heber-Percy, Ms Wood regularly takes time with her co-founders to plan and build business structures that allow rapid and tactical decision making.
Finding the right speed for a business at any given point is difficult. While start-ups are in danger of burning out or missing big strategic opportunities because they cannot slam on the brakes, many large companies, mired in bureaucracy, are too slow to innovate.
“In terms of managing fast and slow, it is challenging indeed, as my inclination is always to want things to be done fast; however, some things just take time,” says Dessislava Bell, founder of UK sportswear company Zaggora.
Ms Bell says her company’s speed is dictated by the customer. If customers are waiting for a response or a product is running out, she expects immediate action. “Other stuff, like strategy planning, does take longer and is something that should not be rushed,” she says.
Speed control is often about managing the short term and the long term. In 2008, Unruly’s founders decided that half the business’s time would be spent on immediate client opportunities, and half on projects with more distant horizons. Ms Wood admits it created conflict within the business, not least with the sales team.
“It is always difficult to turn down revenue,” says Ms Wood, “but there is always a balance to be struck. You have to take the time to think slow in order to move fast.”
Another area in which managers should consciously incorporate different paces is people development.
“If people are happy you will get the most out of them,” Ms Heber-Percy says, but this only works if you spend the time to get to know them. “Certain people need more space and time to do things.”
She regularly organises days out of the office for various teams, most recently an away day for the tech team, who rarely leave their desks. Ms Wood advises taking the time to hire properly: “It’s very time consuming to move people out of the business.”
Ms. Heber-Percy also helps give her team slow time to do a job properly by protecting them from some of the business’s pressures. “As a manager, you need to take the plunge and have the confidence to push back. Rushing never really pays off.”
But there are, of course, times when the focus and speed created by time pressure are desirable. Ms. Heber-Percy’s current bugbear is meetings, which she is determined to speed up. “They have too many people, are too long and suck the life out of you,” she says.
Bigger, longer-established companies must also focus on setting the right pace. Does Sir Martin, for all his talk of the primacy of speed, ever make sure he tempers the pace in his working life? “Yes I do — on planes and holidays and weekends,” he replies.
Miranda Kennett, an executive coach at First Class Coach, advises businesses to: Establish your “golden time” and then police it. When is your brain sharpest? What do you do at that time? Before a meeting, take three minutes to consider its purpose, the order of the agenda and how much time will be allocated to each point. Use a slower pace for creativity. It is difficult to achieve excellence on demand. Use “slow time” for employee development. Take time to really listen to what is going on so you can help. This is not time-consuming but time releasing.
By Emma De Vita
January 14, 2015
When your boss sets the pace of work at warp speed, you will be expected, presumably, to match their haste. Jamie Dimon, chief executive of JPMorgan Chase, routinely tells his employees that their success depends on replying to emails the same day.
But is fast always good in running a business? What do you need to do slowly? And how can you simultaneously manage fast and slow?
We have no choice but to match our own pace of work to the demands of a superfast globalised business world, argues Sir Martin. “You have to be responsive; you shouldn’t attempt to fight it or slow the pace down.”
The increasing emphasis on short-term results from global investors demands speedy action. “It’s better to have a suboptimal decision on Monday and take advantage of being the first or second mover, than to take the time to gestate and have a superior decision on Friday,” he says.
Though he enjoys the pressure to keep up with instantaneous communication, he laments its attendant superficiality. “Things are done quickly without as much thought as may be advisable,” he says.
Tamara Heber-Percy, co-founder of boutique travel business Mr & Mrs Smith, agrees that the relentless acceleration of technology has made every second count. “If your app doesn’t load in four seconds, then that customer is gone,” she says. The feeling of needing to be constantly on your toes has been exacerbated by social media, she adds.
We are indeed under pressure to do things more quickly and many of us work hard to answer every request as fast as possible, says Julian Birkinshaw, professor of strategy and entrepreneurship at London Business School.
“The dominant rhetoric is of accelerated change,” he says. “And because the rate of change in the outside world is perceived to be getting greater, the assumption is that we should do so on the inside, too. Sometimes this creates problems, for example email traffic for its own sake.”
Every business needs both fast and slow, he adds; the problem comes when there is too much of one and not enough of the other. “There are two different speeds underlying any business but some organisations default to fast and some to slow. You have to go out of your way to change that speed.”
Ms Heber-Percy has learnt first hand the merits of both fast and slow management. Established in 2003, Mr & Mrs Smith has 110 employees and three offices worldwide. Like any new venture, it started at an adrenalin-fuelled pace but has slowed as it has matured.
“With this amount of people relying on you, you can’t go at the breakneck speed of a start-up,” says Ms Heber-Percy. Decisions need to be well thought out because the business can no longer afford to make the kind of mistakes — especially technical ones — that a start-up might tolerate.
“Slow makes fast happen,” she says. “We do things fast but well for our customers because the technology has been well thought out. We can surface the right information at the right time.”
Regularly stepping back from the fray means serious thought can be given to the strategic direction of the business. One of Ms Heber-Percy’s regrets is that the company did not create an advisory board sooner. She and her colleagues were reluctant to take on advisers from the very industry they were trying to disrupt but, “it should have been about slowing down and listening to people who have experience”, she says. Time-consuming mistakes could have been avoided.
Sarah Wood, co-founder and chief operating officer of UK marketing technology company Unruly, agrees that business should not always be done as quickly as possible. “We’re a high- growth business but it’s not a 100 metre sprint, it’s a marathon,” she says. “There are moments when you need to do fast but planned agility is paramount.”
This means that, like Ms Heber-Percy, Ms Wood regularly takes time with her co-founders to plan and build business structures that allow rapid and tactical decision making.
Finding the right speed for a business at any given point is difficult. While start-ups are in danger of burning out or missing big strategic opportunities because they cannot slam on the brakes, many large companies, mired in bureaucracy, are too slow to innovate.
“In terms of managing fast and slow, it is challenging indeed, as my inclination is always to want things to be done fast; however, some things just take time,” says Dessislava Bell, founder of UK sportswear company Zaggora.
Ms Bell says her company’s speed is dictated by the customer. If customers are waiting for a response or a product is running out, she expects immediate action. “Other stuff, like strategy planning, does take longer and is something that should not be rushed,” she says.
Speed control is often about managing the short term and the long term. In 2008, Unruly’s founders decided that half the business’s time would be spent on immediate client opportunities, and half on projects with more distant horizons. Ms Wood admits it created conflict within the business, not least with the sales team.
“It is always difficult to turn down revenue,” says Ms Wood, “but there is always a balance to be struck. You have to take the time to think slow in order to move fast.”
Another area in which managers should consciously incorporate different paces is people development.
“If people are happy you will get the most out of them,” Ms Heber-Percy says, but this only works if you spend the time to get to know them. “Certain people need more space and time to do things.”
She regularly organises days out of the office for various teams, most recently an away day for the tech team, who rarely leave their desks. Ms Wood advises taking the time to hire properly: “It’s very time consuming to move people out of the business.”
Ms. Heber-Percy also helps give her team slow time to do a job properly by protecting them from some of the business’s pressures. “As a manager, you need to take the plunge and have the confidence to push back. Rushing never really pays off.”
But there are, of course, times when the focus and speed created by time pressure are desirable. Ms. Heber-Percy’s current bugbear is meetings, which she is determined to speed up. “They have too many people, are too long and suck the life out of you,” she says.
Bigger, longer-established companies must also focus on setting the right pace. Does Sir Martin, for all his talk of the primacy of speed, ever make sure he tempers the pace in his working life? “Yes I do — on planes and holidays and weekends,” he replies.
Further reading: Setting the tempo
Miranda Kennett, an executive coach at First Class Coach, advises businesses to: Establish your “golden time” and then police it. When is your brain sharpest? What do you do at that time? Before a meeting, take three minutes to consider its purpose, the order of the agenda and how much time will be allocated to each point. Use a slower pace for creativity. It is difficult to achieve excellence on demand. Use “slow time” for employee development. Take time to really listen to what is going on so you can help. This is not time-consuming but time releasing.
By Emma De Vita
January 14, 2015
Monday, December 1, 2014
Baker Tilly Kuwait Moves to New Premises
During December 2014, Baker Tilly Kuwait will move to its new premises located in:
Kuwait City
Sharq
Khalid Ibn Al Waleed Street
25 February Tower
Floor 19
The move comes in line with the expansion plan set at the end of 2013 and implemented during 2014. According to the plan, the expansion should consider the following:
Noteworthy is that our move to the new premises comes in response to the development of the needs of our customers, driven by our keenness to always fulfill such needs effectively and efficiently.
Kuwait City
Sharq
Khalid Ibn Al Waleed Street
25 February Tower
Floor 19
The move comes in line with the expansion plan set at the end of 2013 and implemented during 2014. According to the plan, the expansion should consider the following:
- Office Location
The office should be in one of the new distinct towers that mark building intelligence, overlooking the Arabian Gulf, is located at the heart of the Capital and is easy accessible. - Dccor and Design
Streamlined, logical and open design taking into consideration the privacy, and safety of human resources and files, and providing access to sunlight. - Infrastructure
Infrastructure should be flexible and of high tech, covering the entire floor space, and allowing for any modifications that might arise by time. - Furniture
Luxurious brand furniture featuring economic footprint, splendid colors, and harmony of all parts. - Centralized Data Room
The room should include our local server, AC units, licenses of the programs required to operate the server effectively and efficiently. - Record Keeping Room
The record keeping room should be semi-automated and of high tech, accessed by only the authorized personnel using secret code system that logs the names of users when accessing and leaving the room, as well as the document accessed , and the purpose of use. This aims at preserving the confidentiality of the documents’ information and data. - Devices
Devices are of renowned trademarks and high tech. Telephones, computers, photocopiers and printers have been purchased from Cisco, Dell, Richo and Xerox, respectively. - Services
Services include a hotline with memorable number. The hotline comprises 30 sub-lines to ensure customers' calls are answered on timely manner. In addition, a high speed internet connection is available with capacity that can serve the entire employees simultaneously.
Noteworthy is that our move to the new premises comes in response to the development of the needs of our customers, driven by our keenness to always fulfill such needs effectively and efficiently.
Monday, September 1, 2014
Public Private Partnership Law Enacted
State of Kuwait seeks to create appropriate investment climate through suitable investment opportunities that allow the attraction of private equity, up-to-date technology and knowledge by implementing strategic projects based on Public Private Partnership (PPP) schemes. In addition to providing citizens with opportunities to participate in such project, promote savings and realize additional income sources.
In this connection, State of Kuwait enacted Law No 116 of 2014 regarding Public Private Partnership (PPP) on 23rd July 2014. The Law was published on the official gazette "Kuwait Al-Youm" on volume No. 1197 dated 17th August 2014.
Issuance of such a Law is a logical development to treat certain gaps in Law No. 7 of 2008 concerning regulation of B.O.T, and other similar schemes, and certain provisions of Law Decree No. 105 of 1980 regarding State Property.
The Law contains 48 articles, where Article (46) thereof obliges Minister of Finance to issue the Executive Regulations within 6 months from the publishing date thereof on the Official Gazette.
Law No 116 of 2014 regarding Public Private Partnership established a set of new criteria that can be summarized as follows:
In this connection, State of Kuwait enacted Law No 116 of 2014 regarding Public Private Partnership (PPP) on 23rd July 2014. The Law was published on the official gazette "Kuwait Al-Youm" on volume No. 1197 dated 17th August 2014.
Issuance of such a Law is a logical development to treat certain gaps in Law No. 7 of 2008 concerning regulation of B.O.T, and other similar schemes, and certain provisions of Law Decree No. 105 of 1980 regarding State Property.
The Law contains 48 articles, where Article (46) thereof obliges Minister of Finance to issue the Executive Regulations within 6 months from the publishing date thereof on the Official Gazette.
Law No 116 of 2014 regarding Public Private Partnership established a set of new criteria that can be summarized as follows:
- Correction of generic title of the law:
The Law was titled Public Private Partnership. It pointed out that B.O.T. and all other similar schemes are types of schemes that fall under the title “Public Private Partnership” scheme. - Formation of Supreme Committee on PPP projects and defining its functions:
Article (2) of the Law sets out the formation of Supreme Committee on PPP Projects and defines its functions. Such Committee shall replace Supreme Committee on Projects constructed on the State’s real estate properties, which was formed pursuant to Decree No 145 of 2008. It shall undertake functions and powers of the Authority Board of Directors. - Creation of a Public Authority named PPP projects authority and defining its functions:
Article (4) of the Law sets out the creation of such authority, which shall replace “Partnerships Technical Bureau”, in order to legalize the status of the entity that will offer partnership projects given its multiple technical, preparatory, or executive responsibilities. - Regularization of the status of projects existing prior to effective date of the law:
Article (7) of the Law addresses the contracts concluded in accordance with the partnership scheme prior to the effective date of the Law emphasizing its implementation. Thereof as per the terms contained internally and in order to maintain stability of existing legal positions and apply the basic principle of “pacta sunt servanda” or “the consent makes the law”; provided that such contracts shall be terminated upon expiry of the term thereof as set forth in the respective contract and may not be extended or renewed in violation of the provisions of this Law. - Offering PPP projects with total cost not exceeding KD 60 million through competition. An investor may hold the entire share capital of the project company:
Article (12) of the Law handles the PPP projects with total cost not exceeding KD 60 million where it assigns the Authority to cooperate with the public entity in offering such projects through a competition among the investors interested in investing in the project. The successful investor may incorporate the project company or consortium company.It is self-evident that the successful investor or consortium in this case will hold the entire share capital of the project company.Needless to mention that the provision permitting the successful investor to solely incorporate the project company and possess its entire capital is an exception to the basic rule set forth under Companies Law No 25 of 2012, as amended, concerning the minimum number of incorporators and shareholders in a shareholding closed company. The same provision shall apply to the consortium company if the parties to the consortium are less than the minimum limit required for incorporating and holding the entire share capital of via closed shareholding company in accordance with Companies Law. - Empowering PPP projects authority to subscribe for the share allocated to the citizens:
Article (14) of the Law sets forth that the Authority shall subscribe for the share allocated to the citizens pending the project operation, particularly that the project is not expected to generate any revenues before this. The Authority is also authorized to subscribe for the share allocated to public bodies in order to maintain integrity of the company’s capital and eliminate obstacles hindering the incorporation of public shareholding companies, and hence determine the method whereby such shares shall be distributed after subscription by the Authority and when the project is in operation. - Council of Ministry is authorized to make decisions on offering certain projects with cost not exceeding KD 250 million through competition:
Article (16) of the Law allows Council of Ministers to make decisions on offering certain projects with cost not exceeding KD 250 million through competition instead of incorporating a public shareholding company. This is an exception to the provisions of Article (13) of this Law in order to provide more flexibility in involving the private sector to contribute to investment projects of private nature. - Increasing the contract term to 50 years:
Article (18) of the Law fixes the maximum term of the contract to fifty years. Such term shall be calculated effective from the completion date of construction and fit-out works. - Premium initiatives and projects:
Article (20) of the Law sets a specific mechanism for the benefits that the concept originator would obtain. Such benefits are dependent on the concept nature if it is determined to be a distinct initiative or project. - Intellectual property rights are reserved for the concept originator:
Article (22) of the Law reserves intellectual property rights for the concept originator. It also reserves the State’s right to benefit from such concepts. - Project financing:
Article (23) of the Law has primary significance as it permits the investor to adopt the financing methods set out therein including pledge of proceeds and shares held by them through creating the necessary guarantees to finance and execute the project.This Article includes a provision stating that the borrowing amount may not exceed the percentage specified in the project documents as well as not exceeding the period set for the project or the remaining period thereof. It is also prohibited to pledge or sell the land on which the project is constructed.
Friday, August 1, 2014
International Professional Certificate in Regulatory Compliance
Baker Tilly Kuwait Audit, Tax and Consulting Services is always keen to provide professional certificates that enhance the capabilities and knowledge of individuals with the aim of enabling them to match the changes that take place in the business environment; such changes led and guided by the regulatory authorities, mainly represented in the Central Bank of Kuwait (CBK), Capital Markets Authority (CMA) and the Ministry of Commerce and Industry (MOCI) through the laws, resolutions and instructions issued by such regulatory bodies to the banks and companies subject to their supervision, with the aim of executing such laws, resolutions and instructions, while conducting their services for securing a sound business environment marked by transparency and equity.
In this regard, it became crucial for banks and companies licensed to conduct securities activity to create the title “Compliance Officer” within their organizational structure. It is stipulated that this job should be registered with the Central Bank of Kuwait and the Capital Markets Authority; which means that the approval of the said regulatory bodies of the qualifications, criminal record and the experience of the person occupying this job is required before recruiting him. The occupant of this job will be the official point of contact between the regulatory bodies and the banks and companies licensed to conduct the securities activity to ensure the validity of communication methods in terms of the relevant laws, resolutions and instructions and to ensure taking the necessary action for executing the same within the business entities referred to herein.
As the said job is newly created, Baker Tilly Kuwait has, several times, conducted the “Professional Compliance Officer (PCO)” training course which was attended by the occupants of this job who praised the value added in the study material, in addition to the academic expertise of the instructors who led this program. A lot of those who attended the training program have stated that they, for a long time, wished that an international professional certificate in regulatory compliance could be conducted in Kuwait to be able to join it with the aim of improving their skills and knowledge, thus contributing to developing their career path, along with professional application of the regulatory compliance in the business entities they work for.
Baker Tilly Kuwait Auditing, Tax and Consulting Services has undertaken the task to turn such desire into a reality for their clients as Baker Tilly Kuwait is in the process of signing a memorandum of understanding to deliver the review course of “The Regulatory Compliance Certificate- Advanced Level” offered by “The International Compliance Association (ICA)” in association with the University of Manchester Business School, UK.
The certificate will be conducted three times per year; twice in Arabic Language and one time in English Language, with the aim of overcoming the language barrier. Upon conducting the same in the Arabic language, the course material will be in Arabic and the exam which will be in the same language. In the case of English version, the course material will be in English and the exam which will be in the same language. The course material of this certificate will be distinguished, as it will contain the regulatory rules issued by the regulatory bodies in the State of Kuwait; which is a simulation of the international and local rules in terms of application.
The review course will be conducted in one of the training venues in a 5 star hotel over three days starting from 9:30 am to 4:30 PM and at the end of the third day an exam will be conducted, adopting the handwriting technique. It is expected that the first session of the program will be conducted from 10 - 12 November, 2014.
In this regard, it became crucial for banks and companies licensed to conduct securities activity to create the title “Compliance Officer” within their organizational structure. It is stipulated that this job should be registered with the Central Bank of Kuwait and the Capital Markets Authority; which means that the approval of the said regulatory bodies of the qualifications, criminal record and the experience of the person occupying this job is required before recruiting him. The occupant of this job will be the official point of contact between the regulatory bodies and the banks and companies licensed to conduct the securities activity to ensure the validity of communication methods in terms of the relevant laws, resolutions and instructions and to ensure taking the necessary action for executing the same within the business entities referred to herein.
As the said job is newly created, Baker Tilly Kuwait has, several times, conducted the “Professional Compliance Officer (PCO)” training course which was attended by the occupants of this job who praised the value added in the study material, in addition to the academic expertise of the instructors who led this program. A lot of those who attended the training program have stated that they, for a long time, wished that an international professional certificate in regulatory compliance could be conducted in Kuwait to be able to join it with the aim of improving their skills and knowledge, thus contributing to developing their career path, along with professional application of the regulatory compliance in the business entities they work for.
Baker Tilly Kuwait Auditing, Tax and Consulting Services has undertaken the task to turn such desire into a reality for their clients as Baker Tilly Kuwait is in the process of signing a memorandum of understanding to deliver the review course of “The Regulatory Compliance Certificate- Advanced Level” offered by “The International Compliance Association (ICA)” in association with the University of Manchester Business School, UK.
The certificate will be conducted three times per year; twice in Arabic Language and one time in English Language, with the aim of overcoming the language barrier. Upon conducting the same in the Arabic language, the course material will be in Arabic and the exam which will be in the same language. In the case of English version, the course material will be in English and the exam which will be in the same language. The course material of this certificate will be distinguished, as it will contain the regulatory rules issued by the regulatory bodies in the State of Kuwait; which is a simulation of the international and local rules in terms of application.
The review course will be conducted in one of the training venues in a 5 star hotel over three days starting from 9:30 am to 4:30 PM and at the end of the third day an exam will be conducted, adopting the handwriting technique. It is expected that the first session of the program will be conducted from 10 - 12 November, 2014.
Saturday, February 1, 2014
CBK Mandates Basel III Capital Adequacy Ratio
Dr. Mohammad Al-Hashel, Governor – Central Bank of Kuwait (CBK), stated that the Bank’s Board of Directors has adopted the regulatory capital structure for Basel III Capital Adequacy Ratio (CAR), and the transitional stage for the application of this ratio, among the standards included in the Basel III reforms issued by Basel Committee on Banking Supervision.
“Basel III Capital Adequacy Ratio reflects major alterations to Basel II Capital Adequacy Ratio, representing an increase in the overall ratio of regulatory capital, while re-defining the regulatory capital, with a set of standards that aim at improving its quality.” Dr. Al-Hashel said.
“Among those standards are setting a minimum for the items in the form of common equity, setting additional margins in the form of conservation capital buffers, and counter-cyclical capital buffer, setting stricter terms for Tier II Capital, rescinding Tier III, which was allowed under Basel II, in addition to further ratios of domestically systemically important banks (DSIBs).” He added.
“Basel III set of reforms also includes the application of other standards, representing maximum limits for leverage ratio, and two new liquidity ratios; one is a short-term liquidity ratio, i.e. liquidity coverage ratio, and the other is a long-term liquidity ratio, i.e. the main stable funding ratio.” He elaborated.
The Governor explained that the amendments made by Basel Committee on Banking Supervision to Basel II Capital Adequacy Ratio aim at improving the capital quality and increasing the regulatory capital ratio, thus helping absorb losses, in addition to building extra capital buffers, within the framework of the overall hedging policy applied by regulators to mitigate systemic risk and enhance financial stabilization.
The Governor stated that, owing to these facts, Basel III Guidelines allow the application of capital adequacy ratio over time stages commencing 1/1/2013 and ending 1/1/2019, giving banks a grace period for gradual build-up of the required capital, in both quality and quantity, to avoid any credit shrinkage. This takes into consideration that it is difficult for many global banks to comply with the new controls of the ratio during such transitional period.
“As CBK is keenly desirous to apply Basel III set of reforms and the included guidelines, CBK, since the issuance of such set of reforms, has initiated the actions necessary to apply these guidelines, whereby Kuwait will be in the avant-garde of the countries applying the best international banking control standards.” Dr. Al-Hashel continued.
“Kuwait was one of the first countries to apply Basel II, which was welcomed and appreciated by global institutions, and served as a boost to the reputation of the Kuwaiti banking sector at the global level. This includes the global credit rating agencies, thus reflecting in upgrading the credit rating notches of the Kuwaiti banks.” He clarified.
“In application of Basel III guidelines, a steering committee, chaired by CBK, with two members representing Kuwaiti banks, is formed, and consultants are selected to contribute to drafting Basel III and preparing the quantitative impact study (QIS) to apply capital adequacy instructions, liquidity and leverage ratios, in addition to training the staff of CBK and banks on the mechanism of application of the instructions.” He stated.
“In July and August last year, CBK issued draft instructions to conventional and Islamic banks, upon which the QIS was built.” He added.
About CBK Board resolution regarding the application of Basel III Capital Adequacy Ratio, and the stages of application, CBK Governor indicated that in light of the findings of the QIS on Kuwaiti banks, and taking into account the standard application stages as per Basel III guidelines, as well as the global tendency by central banks in other countries regarding the application of the ratio, CBK Board of Directors has adopted an overall capital adequacy ratio with a minimum of 13%. Such ratio is to be applied over stages: at the outset of 2014, a ratio of 12%, at the outset of 2015, a ratio of 12.5%, and at the outset of 2016, a ratio of 13%.
“While applying the ratio over stages, CBK also considered that capital adequacy at Kuwaiti banks remain at the ratios that boost their ability to continue their expansionary policy, specifically to meet any expansion in lending, within the framework of financing the country’s economic development projects, whereby they maintain their competitive edge as opposed to other banks.” He highlighted.
“Kuwaiti banks will provide CBK with capital adequacy data, with effect from December 2013 statements, in parallel with Basel II Ratio data. Those banks had commenced experimental testing with effect from the statements of 31 December 2012.” He stated.
“QIS produced positive findings that reflect the bank's ability to meet Basel III Capital Adequacy Ratio requirements, despite the additional requirements of this ratio relating to regulatory capital, in light of the above-cited amendments.” He explained.
“Those positive findings of the QIS were arrived at as banks maintained high ratios of capital adequacy (Basel II), owing to conservative policy applied by CBK within the framework of balanced, gradual methodology in implementing banking controls.
CBK, in collaboration with Kuwaiti banks and consultants, is working on implementing the capital adequacy ratio instructions in their final format, which will be disclosed in the first half of this year.
CBK, in collaboration with these parties, is moving forward toward accomplishing the other standards of Basel III set of reforms, representing leverage and liquidity ratios, in line with a well-studied time frame and taking into consideration the findings of the QIS.
CBK is persistently upgrading its regulatory tools in line with the regulations that cope with the best practices and enhance the banks’ flexibility to face the shocks, capitalizing on the balanced, gradual methodology it adopts within the regulatory policies that aim at strengthening the banking and financial system, without affecting the requirements of economic growth. He concluded.
Source: KUNA, Dated: 01 February, 2014
“Basel III Capital Adequacy Ratio reflects major alterations to Basel II Capital Adequacy Ratio, representing an increase in the overall ratio of regulatory capital, while re-defining the regulatory capital, with a set of standards that aim at improving its quality.” Dr. Al-Hashel said.
“Among those standards are setting a minimum for the items in the form of common equity, setting additional margins in the form of conservation capital buffers, and counter-cyclical capital buffer, setting stricter terms for Tier II Capital, rescinding Tier III, which was allowed under Basel II, in addition to further ratios of domestically systemically important banks (DSIBs).” He added.
“Basel III set of reforms also includes the application of other standards, representing maximum limits for leverage ratio, and two new liquidity ratios; one is a short-term liquidity ratio, i.e. liquidity coverage ratio, and the other is a long-term liquidity ratio, i.e. the main stable funding ratio.” He elaborated.
The Governor explained that the amendments made by Basel Committee on Banking Supervision to Basel II Capital Adequacy Ratio aim at improving the capital quality and increasing the regulatory capital ratio, thus helping absorb losses, in addition to building extra capital buffers, within the framework of the overall hedging policy applied by regulators to mitigate systemic risk and enhance financial stabilization.
A Grace Period for Banks
The Governor stated that, owing to these facts, Basel III Guidelines allow the application of capital adequacy ratio over time stages commencing 1/1/2013 and ending 1/1/2019, giving banks a grace period for gradual build-up of the required capital, in both quality and quantity, to avoid any credit shrinkage. This takes into consideration that it is difficult for many global banks to comply with the new controls of the ratio during such transitional period.
“As CBK is keenly desirous to apply Basel III set of reforms and the included guidelines, CBK, since the issuance of such set of reforms, has initiated the actions necessary to apply these guidelines, whereby Kuwait will be in the avant-garde of the countries applying the best international banking control standards.” Dr. Al-Hashel continued.
“Kuwait was one of the first countries to apply Basel II, which was welcomed and appreciated by global institutions, and served as a boost to the reputation of the Kuwaiti banking sector at the global level. This includes the global credit rating agencies, thus reflecting in upgrading the credit rating notches of the Kuwaiti banks.” He clarified.
“In application of Basel III guidelines, a steering committee, chaired by CBK, with two members representing Kuwaiti banks, is formed, and consultants are selected to contribute to drafting Basel III and preparing the quantitative impact study (QIS) to apply capital adequacy instructions, liquidity and leverage ratios, in addition to training the staff of CBK and banks on the mechanism of application of the instructions.” He stated.
“In July and August last year, CBK issued draft instructions to conventional and Islamic banks, upon which the QIS was built.” He added.
Multi-Stage Application
About CBK Board resolution regarding the application of Basel III Capital Adequacy Ratio, and the stages of application, CBK Governor indicated that in light of the findings of the QIS on Kuwaiti banks, and taking into account the standard application stages as per Basel III guidelines, as well as the global tendency by central banks in other countries regarding the application of the ratio, CBK Board of Directors has adopted an overall capital adequacy ratio with a minimum of 13%. Such ratio is to be applied over stages: at the outset of 2014, a ratio of 12%, at the outset of 2015, a ratio of 12.5%, and at the outset of 2016, a ratio of 13%.
“While applying the ratio over stages, CBK also considered that capital adequacy at Kuwaiti banks remain at the ratios that boost their ability to continue their expansionary policy, specifically to meet any expansion in lending, within the framework of financing the country’s economic development projects, whereby they maintain their competitive edge as opposed to other banks.” He highlighted.
“Kuwaiti banks will provide CBK with capital adequacy data, with effect from December 2013 statements, in parallel with Basel II Ratio data. Those banks had commenced experimental testing with effect from the statements of 31 December 2012.” He stated.
“QIS produced positive findings that reflect the bank's ability to meet Basel III Capital Adequacy Ratio requirements, despite the additional requirements of this ratio relating to regulatory capital, in light of the above-cited amendments.” He explained.
“Those positive findings of the QIS were arrived at as banks maintained high ratios of capital adequacy (Basel II), owing to conservative policy applied by CBK within the framework of balanced, gradual methodology in implementing banking controls.
CBK, in collaboration with Kuwaiti banks and consultants, is working on implementing the capital adequacy ratio instructions in their final format, which will be disclosed in the first half of this year.
CBK, in collaboration with these parties, is moving forward toward accomplishing the other standards of Basel III set of reforms, representing leverage and liquidity ratios, in line with a well-studied time frame and taking into consideration the findings of the QIS.
CBK is persistently upgrading its regulatory tools in line with the regulations that cope with the best practices and enhance the banks’ flexibility to face the shocks, capitalizing on the balanced, gradual methodology it adopts within the regulatory policies that aim at strengthening the banking and financial system, without affecting the requirements of economic growth. He concluded.
Source: KUNA, Dated: 01 February, 2014
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