Internationally immobile

BY Richard Summerfield

As employers look to develop the business leaders of tomorrow, they are increasingly using mobility to bolster their talent pipeline. However, according to a new report from PwC, companies are greatly neglecting one part of their work force: women.

PwC’s ‘Moving Women with Purpose’ notes that international mobility experiences can be of great benefit to both employees and employers, and by allowing staff to develop their careers overseas companies can create opportunities for staff to develop into future leaders and key talents. However, PwC’s data suggests that the number of women being transitioned into international opportunities is remarkably low, at just 20 percent of international assignees.

PwC interviewed 134 global mobility executives and 3937 professionals from over 40 countries and found a huge disparity in the number of women wanting to experience overseas work in the careers and those being afforded the opportunity to pursue such a position. Indeed, 71 percent of female ‘millennials’ – millennials, for the purposes of PwC’s report, are defined as being born between 1980 and 1995 – want to work outside their home country during the course of their careers, yet only 20 percent of the current internationally mobile population are women.

More and more women wish to be considered for international assignments, yet that demand is not being borne out in reality. More than half of the survey’s respondents said their female employees were being under-represented in their company’s mobility populations.

"This PwC report highlights a number of critical diversity disconnects. CEOs must drive an agenda where women are both aware of, and provided with, the critical experiences required to progress their career, including international assignment opportunities. Global mobility, diversity and talent management strategies must be connected to support the successful realisation of international business and people strategies," said Dennis Nally, chairman of PwC International.

Furthermore, only 49 percent of women surveyed believed that organisations had enough female role models with successful international assignment experiences. This shortcoming has a negative impact on employers’ female talent pools and global mobility programmes.

The report also vanquishes a number of myths around gender stereotypes, namely the suggestion that women with children would be unwilling to work overseas or that women would not seek an international assignment for fear of jeopardising a higher earning partner’s income at risk. Forty-one percent of the female respondents who noted that would want to undertake an international assignment were parents, compared with 40 percent of men.

Given the data contained within the report, the onus is on organisations to take steps to drive higher awareness of the positive experiences of female assignees moving forward.

Report: Moving Women with Purpose

Energy faces uncertain future as megatrends transform oil & gas sector

BY Fraser Tennant

Industry megatrends, such as historically low commodity prices, are transforming the oil & gas sector with a challenging future the likely outcome, according to PwC’s New Energy Futures report published this week.

Recognising the uncertainty clouding the sector’s future, the report proposes a framework which evaluates four potential future scenarios that could help companies successfully navigate an increasingly complex and volatile global market over the next 5 to 15 years.

The four are: (i)  the oil and gas sector evolves along current lines with limited government intervention; (ii) demand from energy consumers (retail & commercial) for cleaner energy drives the transition towards a low carbon; (iii) governments drive increased energy efficiency, expansion of renewable energy demand and accelerated development of disruptive technologies; and (iv) supply constraints are triggered through direct government action, such as implementing carbon legislation or withholding licences (e.g,. Shale, Arctic) or geopolitical disruption.

“Global demand for affordable, reliable energy will continue to grow for the foreseeable future, but there is a new longer-term backdrop, as the world transitions to a low carbon system,” said Viren Doshi, PwC’s Strategy& oil and gas leader. “Momentum to replace fossil fuels with cleaner energy sources is building, and oil and gas companies need to consider their futures in this context."

The report also recommends that companies across the oil & gas chain: (i) have a clear strategy and alignment with portfolio, decision making processes and capabilities; (ii) have an ability to be agile and resilient in uncertain times; (iii) have an innovative response to disruptive change using existing assets as well as technology, knowledge and capabilities; (iv) have a readiness to form alliances and collaborate across the supply chain; and (v) safeguard the social licence to operate by sustaining the trust and support of investors and wider stakeholders through increased transparency.

Jan-Willem Velthuijsen, PwC’s chief economist in Europe, believes that the recommendations will allow companies to “reassess their current strategy and plans, with implications for the operating model, partnering strategy, resourcing and technical capabilities and other areas".

Despite all the uncertainty and prediction of a challenging future, Mr Doshi is in no doubt as to oil and gas sector’s ability to innovate and adapt to a rapidly changing world: “Time and again, successful operators have demonstrated the ability to respond to challenges by taking a long term view, innovating, adapting and gauging major trends as they define medium-long term investment plans.

“We are convinced that they can do so again."

Confidence in 2016 revenue growth is high, say global asset management CEOs

BY Richard Summerfield

Confidence among global asset management CEOs that revenue will grow in 2016 is currently at a high level (90 percent), according to PwC’s 19th Annual Global CEO Survey published this week.

The survey, which quizzed 189 asset management CEOs in 39 countries, also found that over the next three years this boom in confidence will rise to 95 percent.

However, a mere 30 percent of the CEOs said that they expected the global economy to improve over the next 12 months, a view that does not impact on the confidence they have in the ability of their company to achieve strong revenue growth this year and beyond.  

Additionally, the survey reveals that most asset management CEOs believe ‘responsibility’ will play an important part in their success in five years’ time. Furthermore, 86 percent stated that they will prioritise long-term over short-term profitability. Sixty-nine percent also said that they will report on both financial and non-financial matters, while 68 percent anticipate corporate responsibility being a core venture.

“Asset management is going through a time of fundamental change," said Barry Benjamin, global asset and wealth management leader at PwC. “This is a time of great opportunity for growth, yet asset managers need to become more innovative, leverage technology, manage a wider range of risks and use digital communication intelligently if they are to remain competitive. In ten years’ time the sector is likely to be far bigger, but asset management companies will look very different from today.”

As well as concerns over the global economy, global asset management CEOs see over-regulation, geopolitical uncertainty, volatile exchange rates and interest rate rises as major threats to growth. In addition to these, the survey also reveals that 61 percent of asset management CEOs believe that shifting customer behaviours are a threat to growth; 60 percent view cyber security as an escalating issue; and 61 percent consider stock market volatility to be a constant concern.

Yet, despite the threats identified by CEOs, Mark Pugh, UK asset and wealth management leader at PwC, believes that asset managers are on the right side of a number of powerful trends. He said: “Retirement patterns across the globe, especially in the UK with recent Pension Freedom reforms, are leading to opportunities as well as creating a wider set of stakeholders.”

News: Asset management CEOs positive as they innovate to take centre ground - PwC’s 19th Annual Global CEO Survey

Report: PwC’s 19th Annual Global CEO Survey

Fifth column risks rise - EY

BY Richard Summerfield

Cyber breaches and the threat posed by malicious insiders are two of the biggest risks driving investment in global forensic data analytics (FDA), according a new report from EY.

EY's 2016 global forensic data analytics survey, ‘Shifting into high gear: mitigating risks and demonstrating returns’, notes that insider threats  in particular offer the biggest risk to organisations becoming a victim of fraud, corruption or data loss. The most prominent forms of inside threat, according to respondents, include malicious insiders stealing, manipulating or destroying data.

The survey questioned 665 executives globally across a wide range of industries including the financial services, life sciences, manufacturing and power and utilities sectors. From the available data, it is clear that concerns around cyber security are helping to crystalise opinions across industry boundaries; indeed, companies are turning to FDA to try to counteract cyber threats.

Companies have been spurred into action by increasing activity among cyber criminals as well as aggressive regulatory pressure. Rising demands from both governmental bodies and the general public is driving much of the investment in FDA, notes EY. Forty-three percent of respondents claimed regulatory pressure was one of the main driving forces behind their FDA investment, second only to the burgeoning threat posed by cyber crime.

Of those executives surveyed, 44 percent reported an increasing level of concern over “bribery and corruption risk” while 62 percent noted an increasing concern over  “cyber breach or insider threat”.

Given the recent spate of major, headline grabbing cyber attacks, it is little surprise that breaches are weighing heavily on executive minds the world over. As companies take steps to protect their physical and digital assets from internal and external threats, the FDA will continue to play an important role in helping them navigate such risks. Given the size of the fines and sanctions imposed on companies and individuals in recent years, c-suites are understandably concerned about regulatory enforcement around cyber risk.

With the c-suite increasingly worried about the threat of cyber risk and malicious internal actors

Many companies have been pouring considerable resources into bolstering their FDA efforts in recent years. Spend is expected to continue throughout 2016. In 2014, 64 percent of those surveyed believed that their investment in FDA was adequate, while in the latest survey only 55 percent felt the same. Furthermore, three out of five respondents said they intend to increase their FDA spend over the next two years.

Report: Shifting into high gear: mitigating risks and demonstrating returns

CFOs adopting mood of caution in early 2016

BY Fraser Tennant

A cautious mood currently pervades the chief financial officers (CFOs) of the UK’s largest companies, according to Deloitte’s new Q4 2015 CFO Survey - widely accepted as a key barometer of the sentiment and strategies of the UK’s corporate world.

The survey, the 34th focusing on the views of CFOs and group finance directors of major UK companies, features three key findings: (i) risk appetite has shrunk and business confidence has fallen back to 2012 levels; (ii) support among CFOs for UK membership of the EU has narrowed, although a majority still favour UK membership; and (iii) CFOs’ balance sheet strategies are more defensive now than at any time in the last three years.

When quizzed about their company’s prospects for growth in 2016 compared to three months ago, 30 percent of CFOs said they were less optimistic (up from 20 percent in Q2), while 12 percent said they were more optimistic (down from 36 percent six months ago).

“UK corporate sector risk appetite has fallen to a three and a half year low mirroring the loss aversion and caution being seen in financial markets," said Ian Stewart, a chief economist at Deloitte. “With a much sharper focus on cost control and less emphasis on growth through acquisitions and capital spending, CFOs’ strategies are more defensive than at any time in the past three years.

“The surge in business confidence that started in late 2012 went into reverse in 2015. CFOs are reacting to uncertainties abroad by cutting back on risk taking and sharpening their focus on cost reduction. The more defensive stance by CFOs points to a softening in the growth of corporate hiring and capital spending in coming months.”

In terms of whether it is in the interests of UK businesses for the UK to remain a member of the EU, 62 percent of CFOs said they were in favour of the UK remaining in the EU (down from 74 percent in Q2). Furthermore, 28 percent made it clear that their decision will depend on the outcome of the prime minister’s renegotiation of UK membership.

“A clear majority of CFOs continue to favour the UK remaining in the EU, but the proportion of those expressing unqualified support has fallen," said David Sproul, senior partner and chief executive of Deloitte. “This mirrors what we have seen from the broader public in opinion polls in the last six months."

The 2015 Q4 survey involved 137 CFOs, including the CFOs of 24 FTSE 100 and 62 FTSE 250 companies, and took place between 11 November and 2 December 2015.

Report: The Deloitte CFO Survey – the year ahead: A cautious start to 2016