CEOs, Stop Trying to Manage the Board

CEOs, Stop Trying to Manage the Board

It’s understandable that most CEOs try to manage their boards. With directors often attempting to take a more active role in decisions these days, CEOs naturally feel a bit threatened. They’re trying to lead a group of people who typically lack the time or expertise to fully understand what’s going on — but who have real power.

At most companies, despite all the best intentions, managing the board usually means keeping directors at arm’s length. Most CEOs I’ve known are inclined to give out just enough information to satisfy their fiduciary obligations

It’s all a matter of developing trust. Building trust can be a delicate thing, but it isn’t magic. You don’t need special charisma. All you really need is courage and self-confidence.

Real transparency, I learned, isn’t so much in the numbers, but in open conversation.

With unscripted meetings not only freed directors to ask more questions, but also gave them more of a window into the company. They got to see the other executives in action, including my potential successors.

It’s important to remember that boards see only a small part of you, and even less of the company. They visit for a day or two and get a snapshot.

If you give the board unfettered access to executives, you’ll build trust with the directors as well as with your management team. Openness and transparency in board meetings over time can go a long way toward making everyone comfortable with everyone else.

A CEO’s job is hard enough. One of your biggest responsibilities is to avoid making dumb decisions. Wouldn’t you want all the directors to feel comfortable challenging you and each other?


One Simple Way To Forecast Fed Rate Move

One Simple Way To Forecast Fed Rate Move

The Fed funds futures change all the time as traders buy and sell contracts based on their expectations for future rate hikes.

That means with each new drip of fresh economic data, including the closely watched non-farm payrolls or inflation reports, the Fed funds futures could change, and so too could expectations for a hike in the Fed funds rate.

The Formula
There’s a simple way to read the Fed funds futures and determine what traders are expecting and when they expect it. The formula: start with a basis of 100 and subtract the last price of the contract month you’re analyzing.
For example, look at the last price of the SEP 2015 contract of 99.745. Subtract it from 100 and you get 0.255. That means traders expect the federal funds rate to be at 0.25% in September.
Now look at the DEC 2015 contract and repeat the calculation: 100 – 99.585 = 0.415, or just over 0.41%. Traders expect the federal funds rate to rise by December.

Return on invested capital (ROIC), compensation and organization design

Return on invested capital (ROIC), compensation and organization design

The path to value creation, is through return on invested capital (ROIC).  Indeed, the best way to create real value in a business is by making smart investment decisions.

Aetna is one of a number of organizations (including the likes of Starbucks, Gap and Walmart) who’ve made this move — and distinct in being a financial services firm rather than a retail enterprise.  The company announced in January the increase to increase Aetna’s minimum wage to $16 per hour.  The move will impact 5,700 employees and result in an average pay increase of 11%.

Many are referencing the efficiency wage theory — the notion that simply paying workers a higher wage should lead to increased productivity — as the rationale for these wage-boosting decisions.  Perhaps this can be banked on, but I would submit that the astute among this vanguard (and I suspect they are all astute) have actively considered and are pursuing steps to maximize the positive return of these enormous investments.  One of these is likely work and organization design.

As those with responsibility for managing our organization’s compensation spend and doing so to maximize the return on that investment, many of us should be looking at an opportunity to embrace it.  I’d wager that the examples of Aetna, Starbucks and Gap are being discussed in many of your boardrooms.  If moves like this are being contemplated, you have an opportunity to provide leadership and expertise.


6 things you need to know to lead the PlayStation generation

6 things you need to know to lead the PlayStation generation

Practical tips for leading millennials

I’m quite senior, I’ve never used a PlayStation, but I feel so aligned…..probably that’s due to the child still alive inside myself.
That’s why I feel comfortable in a bridging role connecting people’s diversity and generations

1] They learn through experience. We don’t call them the PlayStation generation for nothing. They grew up playing a lot of video games without using instructions. They learned to make it to the next levels of these games by dying over and over again. They can be like that in their professional careers too. They throw themselves into new experiences without a lot of planning and learn by failing.

2] Their lives are non-linear. The world has always been complex and volatile for this generation. They have witnessed the Asian financial crisis, climate change, 9-11 and the war on terror, the 2008 financial crisis, all before they were established professionals. This generation has never seen the world as a safe and coherent place.

3] They ARE loyal. But to principles and not to people. This is where some of the accepted wisdom about millennials comes to play. They appreciate personal development. They love new opportunities. But they will not follow your lead just because you are the boss.

4] Assumptions about privacy, boundaries and roles are fluid and permeable. This can be good and bad. We have all heard horror stories of young adults suffering consequences for what they post on social media, like that friend of a friend who got fired for calling their boss a jerk on Facebook.

5] Power is distributed and control requires permission. In other words, millennials don’t put up with bad bosses. They don’t listen to authority if they don’t agree.

This might seem like a challenge, but in the long run the sooner people stop accepting poor leadership, leaders will have to improve. Everyone will benefit.

The lesson here is: don’t be a lazy leader. Make sure your millennial employees understand why your organization and team are doing what they are doing. Don’t just say “do it because I said so”.

6] They are not good at boring but necessary work. Millennials don’t like to concentrate on boring tasks that lead to mastery and build character if those tasks don’t have clear benefit. In order to develop expertise and wisdom in any industry, people have to invest in non-glamorous grunt work to get to know their sector by heart. These types of experiences also help build patience to work through a problem until it’s solved.


Today’s senior managers should put in extra effort to show the digital cowboys why the hard work is important. Leaders need to make sure that entry level talent know that having a deep understanding the different aspects of an industry will help them in more senior roles later on.

Companies and organizations by and large have been good at getting millennials in the door for a while now, but they have been more challenged about getting them to transition to higher levels of responsibility.

Which regulations do we need for the Board of Directors members’ job?

Which regulations do we need for the Board of Directors members’ job?

Frequently, much more than the relevant managerial experiences and skills, what really counts are the topics of the reputation, the independence and of the conflict of interest

These are the main reasons why the choice of an INDEPENDENT NON-Executive Director, is always a key step on the pathway for the Corporate Governance strategy and practice, doesn’t matter is a large or a small business, a family company or a public corporations

….. The relative ease with which limited liability companies may be set up in Malta has made the protection of limited liability accessible to a large number of people. In reality, they may be unable or unprepared to assume the duties and respons-ibilities expected from company directors, fail to exercise adequate management skills, and lack proper regard to the financial interests of the company’s creditors.



Bitcoin Transactions Vs. Credit Card Transactions

Bitcoin Transactions Vs. Credit Card Transactions

Satoshi Nakamoto, the inventor of bitcoin, titled his original white paper on the subject “A Peer-to-Peer Electronic Cash System.” This description touches on the core differences between bitcoin and credit card transactions.

Bitcoin payments are analogous to a wire transfer or cash transaction, where payment is ‘pushed’ directly from one party to another, without going through another financial institution. Payment processing is executed through a private network of computers, and each transaction is recorded in a blockchain, which is public. Bitcoin is based on peer-to-peer technology and relies on the blockchain and the cryptography securing it, without any third party oversight.

By contrast, credit card transactions entail the buyer effectively authorizing the seller to ‘pull’ a payment from their account, passing through several financial intermediaries in the process. For example, a typical Visa transaction involves four parties: the merchant, the acquirer (the financial institution that enables payments to the merchant), the issuer (the card holder’s bank), and the individual cardholder.

When making a bitcoin transaction, it is not necessary to provide personal identification information such as your name and address. Bitcoin transactions are made using an anonymous alphanumeric address that change with every transaction and a private key. Payments can also be made on mobile devices by using quick response (QR) codes.

While credits cards are stored physically in a wallet, bitcoin transactions are sent to and from electronic wallets, which can be stored on your computer, smartphone, or in the cloud.

Bitcoin transactions are irreversible and can only refunded by the receiving party — a key difference from credit card transactions that can be canceled. This means there are no charge-backs for merchants when taking payment via bitcoin. A charge-back is the demand by a credit-card provider for a retailer to cover the loss on a fraudulent or disputed transaction.

Bitcoin merchants also save on credit card fees that can range anywhere from 0.5% to 5%, plus 20 to 30 cents for each transaction made. Bitcoin payments can be sent and received at a very low cost or none at all, as bitcoin fees are based on the amount of data sent.

For merchants, the advantages of receiving bitcoin are obvious. Payments made using the virtual currency save substantially on processing fees and eliminate the risk of charge-backs. For shoppers the advantages of paying with bitcoin include greater simplicity in placing the transaction, user anonymity, no interruptions from intermediaries (for example your account being frozen as a result of a fraud alert), and very low transaction fees.

Credit cards offer important beneficial features such as the ability to borrow money, protection against fraud, reward points, and vastly wider acceptance among merchants. While a few major retailers, including (OSTK), Dell, and Etsy, have started to accept bitcoin, most have yet to make it a payment option. However, using credit cards carries the risk of incurring late fees, interest charges, foreign transaction fees, and potentially adverse effects on your credit score.

The Bottom Line

Ultimately, bitcoin resembles cash as much as it does credit cards. The virtual currency aims to combine the advantages of direct cash transactions with the power of digital technology.
maltaway_malta_balatti boardmember_bitcoin

Finance 4 family, What to Know and What to Do in 2015

Finance 4 family, What to Know and What to Do in 2015

5 Things to Know in 2015

1. Central Banks Diverge: Dollar Likely Higher

We expect divergence to continue for at least the next several months. Continued dollar strength will exert downward pressure on commodities, inflation and the earnings of U.S. exporters.

2. Fed Ready to Hike – But Rates to Remain Low

Short-term bonds will be most affected by higher rates, while longer-term yields should inch up at a gentler pace. Stocks may see brief stutters, but should recover.

3. U.S. Economy: Inching Up, Not Breaking Out

The U.S. is still stronger than other developed economies. We expect growth in the area of 2.5% to 2.75% this year—enough to support modest growth in stocks.

4. Inflation: Still Low – In Some Places, Too Low

Tepid U.S. inflation is good news for American businesses and consumers. Ultra-low inflation in Europe should lead to continued stock-friendly policy from the ECB.

5. Expect Stocks’ Bumpy Ride to Continue

While volatility will be higher than the unusually low levels of the past few years, market dips may present buying opportunities for long-term investors.

5 Things Investors Should Consider in 2015

1. Prefer Stocks Over Bonds, But Be Choosy

2. Look Overseas for Opportunities

Most stock market bargains live outside the U.S. Ensure you’re taking advantage. (see image below)

3. Watch Your Step in Bonds

With rising interest rates, bond principal is at risk. Be wary of shorter maturities in particular, which would be most affected by a Fed rate hike.

4. Resist the Urge to Exit

It’s important to hold some cash, but too much can set you back. Cash comes with a cost after inflation and taxes.

5. Seek Growth in a Low-Growth World

Expand beyond traditional assets in an effort to optimize your portfolio’s results