Is your board of directors ineffective? More strategy less compliance please

Toward a value-creating board, more strategy less compliance please

MALTAway is your board governance partner, furthermore having a NED with international experience in the BOARD, reinforce widely the diversity, independence and compliance requirements for a better Corporate Governance, Leadership and Business results

The amount of time board directors spend on their work and commit to strategy is rising

Directors say they dedicate more time now to their board duties than ever before and that, since 2011, they’ve cut in half the gap between the actual and ideal amount of time they spend on board work. In the newest McKinsey Global Survey on corporate boards,1the results confirm that strategy is, on average, the main focus of many boards. Yet directors still want more time for strategy—more than any other area of their board work—when they consider its relative value to their companies.

We asked directors about the effect their boards have on company value and found that, in general, respondents believe their impact is high or very high—which was also true in our previous survey on the topic.2 To gain a deeper understanding of how boards create value, we took a close look at larger commercial companies and identified patterns between directors’ assessments of the board’s overall impact, effectiveness at executing specific tasks, and the way the board works. From our analysis emerged three types, or profiles, of boards, which we call ineffective, complacent, and striving. Interestingly, some directors’ initial views on their overall impact diverge from how effective they say their boards are at individual tasks. To be successful, then, the results from our three profiles suggest that boards must be effective at individual tasks, maintain a trust-based but challenging board culture that embraces feedback, and aim to improve continuously.

Time spent—and commitment to strategy—are on the rise

On average, the amount of time directors spend on board work has increased notably in recent years. Compared with 2011, respondents now say they spend five more days per year on board work, cutting in half the ten-day gap between the actual days spent and the number of days directors want to spend to get it right

 

As the number of days has grown, so has the amount of time spent on strategy, where board members tend to say they make their biggest contributions (Exhibit 2). Indeed, directors are almost twice as likely to say their boards are more effective at strategy than any other area of their work; they report the least effectiveness at organizational health and talent management.3 Strategy is also where directors spend nine days per year, the greatest amount of time across the seven areas of board work we tested.

But for all of their focus on strategy, most directors would like to dedicate even more time to strategic issues. Fifty-two percent of directors say they want to increase the time they spend on strategy in the next few years, based on its relative value to their companies (Exhibit 3). An equal share say the same for organizational health and talent management, an area where boards spend only three days per year.

A board’s actions, dynamics, and self-perception all matter

To gain a more comprehensive understanding of how boards can be successful, beyond the time directors spend on their work, we looked closely at three factors of board performance: directors’ assessments of what impact their boards have overall, how their boards perform specific board tasks, and how their boards operate.4 After considering responses at both the global and the task level (where some interesting differences emerged), our analysis resulted in three types of boards: those that are ineffective, those that are complacent, and those that are striving.5

The ineffective boards

Compared with their peers, the directors on ineffective boards report the lowest overall impact on long-term value creation and the least effectiveness at the 37 tasks we asked about. Notable shares say their boards don’t execute some of these tasks at all: 70 percent, for example, say their boards don’t align with the executive team on how to manage company risk. Of the tasks they do perform, only minorities of these directors say their boards are effective at any one. Ineffective boards do best at securing and assessing their management teams: 44 percent say their boards are effective at discussing top-team performance with the management team, and 42 percent say they’re effective at regularly reviewing the top-talent pipeline. When it comes to how boards operate, less than half of ineffective-board directors report a culture of trust and respect in the boardroom or that directors seek out information on their own. Only 1 percent say their directors received sufficient induction training.

The complacent boards

By contrast, directors on the complacent boards have a much more favorable view of their overall contributions. Close to half say their boards have a very high impact on long-term value creation—the largest share among the three types of boards. But when asked to consider their boards’ execution of 37 specific tasks, there are only 3 for which a majority of respondents report effectiveness: ensuring that management reviews financial performance, setting the company’s overall strategic framework, and formally approving the management team’s strategy.

Organizational health and talent management is a particular weakness: just 9 percent of directors on complacent boards, for example, rate their boards as effective at ensuring the company has a viable CEO successor who can step in at any time (Exhibit 4). Compared with ineffective boards, though, these boards have a stronger sense of trust and teamwork. Two-thirds of complacent-board directors report a culture of trust and respect, and about half say their boards spend enough time on team building. At the same time, they struggle to embrace feedback. Less than one in five say their boards regularly engage in formal evaluations, either individually or as a board, or that their chairs ask other directors for input after meetings.

The striving boards

The striving boards, then, are the most well-rounded of the bunch. Just 26 percent of these directors rate their boards’ overall impact as very high, compared with 44 percent at the complacent boards. But on specific tasks, they report much greater effectiveness than their peers on every single one—and at least half of striving-board respondents say they’re effective at 30 of the 37 tasks. These directors rate their boards as particularly good at strategy and performance management (Exhibit 5). For example, 69 percent of respondents on striving boards say they effectively adjust strategy on a continuous basis; only 35 percent on complacent boards and 2 percent on ineffective boards say the same.

Striving boards stand out, too, in the ways they operate (Exhibit 6). These directors report an exceptionally strong culture of trust and respect, that board members and the management team constructively challenge each other (76 percent say so, compared with 53 percent of complacent-board directors), and that chairs run meetings well. Feedback is another area that distinguishes these boards. Striving-board directors are more than twice as likely as complacent-board directors to say their boards conduct regular evaluations, and more than three times likelier to say their chairs ask for input after each meeting. That said, there’s significant potential for even the striving boards to improve: only one-third of these directors say their boards regularly evaluate themselves.

Finally, directors on striving boards commit much more time to their work than others do: on average, they spend 41 days per year on board duties. The complacent-board members spend only 28 days per year—even less time than directors on ineffective boards, who report spending 32 days on board work.

Looking ahead

  • Spend even more time. This year’s results indicate across-the-board increases in the time that directors spend on board work, compared with previous surveys. While directors at striving boards already spend 41 days per year and have no ambitions to spend more time, the average board member spends 33 days and says he or she would, ideally, spend 5 days more. In our experience, though, many board members are spending 50 days or more per year on board work, either due to regulatory pressure or simply owing to the fact that the time required to do a good job is usually more than directors initially expect.
  • Balance trust with challenging discourse. According to the results, the boards that are most effective and well-rounded also have the strongest board dynamics. In a healthy boardroom, a culture of trust and respect is vital. But so is an environment where directors and company leaders challenge each other. It’s no coincidence, then, that directors at striving boards report these characteristics most often. But all boards could be better at other elements of how their boards work: improving induction training, for example, and conducting regular evaluations, which only a minority of respondents report—even at the striving boards.
  • Appoint an ambitious chair. Another important ingredient of improved board dynamics—and an improved board—is an effective chairperson, who runs meetings well, establishes a culture of trust and constructive discourse, and invests in training, development, and feedback. Good leadership sets the tone for the board as a whole and can set the stage for a more effective, value-enhancing board.

http://www.mckinsey.com/Insights/Strategy/Toward_a_value_creating_board?cid=other-eml-alt-mip-mck-oth-1602

 

 

Malta’s ‘Silicon Valley’ of remote gaming

Malta’s ‘Silicon Valley’ of remote gaming

Malta’s future in the gaming industry looks bright and with good prospects comes the need for good regulation

http://www.mga.org.mt/ 

Ready to move here?  MALTAWAY is your way

 

The Malta Gaming Authority has restructured to enable itself to adapt to this dynamic business. What were the major changes you implemented when you started heading the agency?

We have put in place a stronger management and governance structure. The MGA is now split into essentially six directorates namely: Legal & International Affairs, Enforcement, Compliance, Authorisations, Operations (which include HR and IT) & Finance. Furthermore, we have strengthened the Chairman’s office to cater for programme management, stakeholder engagement, innovation, policy and strategy. We have also put in place an Audit Committee, a supervisory council and beefed up our Internal Audit function. Apart from this, we have also engaged more people in enforcement, support services and compliance to address gaps we had in our resources. More information can be accessed at: http://www.mga.org.mt/about-us/mga-structure/

Let us look at the turnovers in the gaming sector, what are the direct contributions to the economy and the indirect contributions? 

The sector contributes around 10% of Malta’s Gross Value Added if one had to include the land based sector i.e. national lottery, casinos, gaming parlours and bingo halls. The sector’s contributions include gaming and income taxes, direct employment, property rentals & procurement of services e.g. ICT, corporate services, supplies and other services. Furthermore, the sector has an indirect impact on the entertainment industry and other support services the gaming industry procures to run its business.

Why do foreign gaming companies seek Malta?

Malta has a sophisticated and well-developed ecosystem that has built a high level of critical mass that is not easily copied by other jurisdictions. By ecosystem I mean the whole industry and the support services driving it, which are, in my opinion, world class. Apart from that, Malta’s regulatory regime is effective and transparent with a regulatory authority that is highly skilled and experienced.

Malta is in essence a role model for other countries to follow. Other facets of our attraction as a place of establishment include the underlying ICT infrastructure, Mediterranean lifestyle, strong banking system, English speaking population, agility, fiscal regime and skilled workforce. Putting all this together makes Malta the undisputed place of establishment for remote gaming. Our plans are targeted towards making Malta the “Silicon Valley” for remote gaming.

Are we selling ourselves cheap?

No. We don’t sell ourselves cheap and we never should. Malta is a jurisdiction of repute and our success should not be dependent on being a low cost jurisdiction. On the contrary, our unique selling point is the integrity of our jurisdiction and the manner in which we approach our regulatory ethos. Of course, competitiveness is critical but reputation and integrity are priceless. Our success is and should be based on that.

How do you promote Malta as a centre for remote gaming?

We participate in many gaming events globally where we showcase Malta and its attractiveness as a gaming jurisdiction. Furthermore we collaborate closely with practitioners in the field and other stakeholders. We have also built a strong social media and PR presence where we communicate our message and developments in the sector using a variety of channels.

What are the lacunas and issues we still face?

Our challenge is to remain relevant in a fast paced and dynamic environment. Our agenda for the future is based on innovation and growth. Plans to improve existing legislation to cater for new technologies, innovations and growth should leave the desired effect on the industry. I am sure that all stakeholders will appreciate what we have in mind.

Do you not believe that the participation of Maltese nationals in the gaming sector is still far too low?

It is low but having expats working in Malta is a positive thing. It has helped us build the right competencies and skills. It is a fact that two thirds of employees in the remote gaming sector are foreigners. What we need to do to increase participation of Maltese nationals is to create the right training and development institutions to build the required skills. The new Gaming Academy of Malta to be launched next year is designed to address that gap.

There are a number of concerns that the advantages we offer gaming companies may be at risk.  How real are these?

Risks are always there, in any kind of business. What we do to address those risks is what defines outcomes. Most of the risks we face as a jurisdiction are not local but emanate mainly from outside Malta.  I can assure you that we are on top of any such risks and dealing with them through the right channels with clearly articulated initiatives.

Remote gaming brings with it many ethical and moral issues, how do you respond to these justified concerns?

Consumer protection is key for us. To obtain a licence from the MGA, an operator needs to adhere to a number of consumer protection and responsible gaming requirements. Education is critical in ensuring that consumers play responsibly. The vast majority of people play responsibly and see gaming as a form of entertainment.

There are unfortunately a small percentage of people who gamble excessively and enter the realm of problem gambling. The latter category of gamblers needs to be tackled professionally by specially trained people. The Responsible Gaming Foundation, which was launched last year, has been set up to address such situations.

Malta has been the target of money laundering operations and some remote gaming companies have been investigated for their role.  How do you ensure that such activities are curtailed?

Effective supervision and monitoring of the sector helps to minimise such risks. Furthermore, continuous improvements in our compliance activities and investment in cutting edge information systems improves the robustness of our supervisory mechanisms.

Are you happy with diligence procedures in place?

Yes. Having said that, we continuously keep our processes under review to optimise our governance mechanisms including our on-boarding process.

Looking at the next five years, how do you see this sector developing?

The sector is set to keep on growing but not necessarily at the same pace of previous years. This is because we have most of the biggest names in the industry already established in Malta. I envisage more consolidation and M&A activities in the market going forward. Furthermore, I believe that Malta can be the hub of adjacent activities to remote gaming such as IT development, game design, payments processing and back office activities. My vision is for Malta to be the “Silicon Valley” of remote gaming and our strategy is based on that.

http://www.maltatoday.com.mt/business/business_news/59793/preparing_for_maltas_silicon_valley_of_remote_gaming#.VmUr67jhDIU

Benefits of Malta Trust & Foundation

Benefits of Malta Trust & Foundation

 

Wealth Management & Trusts in Malta

Since Malta’s accession to the EU in 2004, Malta has emerged as an attractive jurisdiction for the establishment of international corporate holding structures, to be used in multinational groups, owner-managed companies as well as the holding of assets for High Net Worth Individuals. Worthy of note is the fact that in the last decade Maltese legislature has been very active in the area of fiduciary obligations, specifically those resulting from the creation of trusts and foundations.

Benefits of Trusts in Malta

  • One of the few civil law jurisdictions that has developed its ow domestic trust law
  • Recognitions of trusts set up under foreign laws
  • Offering the set-up of domestic trusts and foundations
  • Legislation published in English
  • High professional standards with many accountants, bankers, lawyers, notaries and investment advisors holding overseas qualifications and having overseas experience
  • Fast-track authorisation for trustees licensed in other (approved) jurisdictions
  • English-speaking country with a pro-business government

Benefits of Wealth Management in Malta

  • EU and eurozone location
  • Multi-disciplined advisors able to adapt to the changing needs of High Net Worth Individuals (HNWIs)
  • Sound and sophisticated banking system
  • Fast-track authorisation for Professional Investor Funds (PIFs)
  • Flexible investment structures (SICAVs, trusts, partnerships, etc.)
  • A reputable stock exchange
  • One of the only civil law jurisdictions to have successfully developed a trust concept by integrating it with Roman law sources
  • Recognition of foreign trusts
  • Offering the set-up of both trusts and foundations
  • A stable macroeconomic environment

http://www.financemalta.org/sections/malta-trusts-financemalta/financemalta-wealth-management-articles/detail/8-benefits-malta-trusts-foundations

MALTA BANKS & INVESTMENTS

INVESTMENTS in Malta: The Complexity of Simplicity

Corporations, Entrepreneurs, Families, HNWIs, Individuals, with our advice and support, find in Malta a dedicated, professional and safe Banking and Finance system within legal, tax, financial regulations suitable for business environment and wealth & assets protection

These Finance Services’ solutions for Investments in Malta, meet the clients’ needs in a stable, safe and growing economy country, member of Europe and Commonwealth as well

Behind these words , there are three basic concepts :

  • wealth protection
  • asset growth
  • income from capital

From the real estate to the financial market , through sophisticated solutions for Investment Protection & Management , we can guide you on the best way to go

MALTAway allows you to find in Malta a unique investments solution that combines:

  • legal vehicles
  • low cost structure and tax
  • efficient financial instruments
  • professional advice

to protect and growth of your WEALTH and ASSET in a jurisdiction fully compliant with the OECD and Europe regulations, placing itself at the top of global stability and fiscal efficiency

 

Be aware , open a bank account in Malta as NON-RESIDENTS , is a long, demanding and selective process. We can be your Introducer and Sponsor , first checking with you that there are the conditions to proceed without wasting valuable time

Of the 22 banks authorized to conduct business in Malta , three are owned Maltese , 19 are foreign banks .

The banking system consists of the Central Bank of Malta and the ” Malta Financial Services Authority ” ( MFSA ) , an autonomous body established in 2002 legally .

The Maltese Government has launched a legislative reform aimed at transforming the island from offshore center to financial center with a high global standard of banking, financial and insurance services as well.

MALTA BANKS 

WEALTH PROTECTION, BENEFIT TRUST AND FOUNDATION

MALTA TRUST

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