It surprised me when I received before the Summer an email from our HR Academy requesting which date was suitable for me to attend this one day course ‘Presentation Skills’. The reason for my astonishment was mainly because I am already attending this (international) networking club* for the purpose of helping members improve their communication, public speaking, and leadership skills. Thus, why would I need this simple one day course while I was already going to this club bi weekly? After being told by my colleagues that this course will bring new insights, I replied back to our HR Academy with a preferred date. On the day itself I told myself; different angle, different (new) insights… I have to admit the training was good. Well organized, very professional trainer and comfortable setting. The training started with a kick-off by telling who you are, what you do and what you are expecting from this training. After each short presentation, the trainer would give his feedback and you could watch yourself on the video. I’d never watched myself back on the video after presenting, thus this exercise felt scary but also exciting. While I thought the presentation couldn’t go any worse than this, after I watched myself, I reconsidered my negative opinion. It wasn’t that bad after all. Immediately, after the kick off, I picked up some improvement points such as: “Speak louder, speak slower, and breathe!“ All those points, I KNEW from the club. It wasn’t something new, but after the kick-off, and having watched the video, this time it struck me; these are really the points I need to focus on. The second exercise was to present a convincing/persuasive story to the audience. I chose to persuasive the audience to watch this incredible good American TV-series. I’d outlined the points I wanted to emphasis on, how to catch their attention and make my point why they should watch (or at least watch the trailer) as well. Voice was loud, talking slower than the kick off, and was breathing normally. The improvement points after this presentation was: look at the audience and take pauses. Looking at the audience can be quite challenging, therefore the tip: use the letter M and try to have eye contact with each person in the audience for max 2.5 seconds. With the letter M the idea is as following; while you are presenting try to start from either left or right side of the room and move with your eyes as drawing the letter M. Try not to literally draw with your eyes letter M, you might look funny. The final exercise of the day was to make your point during the presentation, such as presenting in front of management, but in an effective and efficient way. Goal of my presentation was to tell the audience why my job responsibilities are important for every employee at our organization. During my presentation I gave clear examples and expressed the willingness to help them with any uncertainties they may have. The take away from this presentation was: examples can be helpful and try to ask yourself whether the message you want to bring over; do you just want to tell and ‘move on’ or do you want to get it ‘stick’, which will allow to accomplish the goal of effectiveness. As summary of the one day Presentation Skills training: Breathe and Pause Letter M 5 Sec Voice Examples
Interview with Paul Zwetsloot
Paul Zwetsloot, substitute ambassador and head of the economical department at the Dutch embassy in Brasília talks about Brazilian business culture, the current economical and political state of Brazil, and corruption and transparency. During our Studytour, we will visit several accounting and finance related companies. Furthermore, we will compare Brazilian business culture to the Dutch business culture. Could you tell us how the Brazilian business culture compares to the Dutch business culture? “In Brazil, contacts are more important than contracts. Consequently, having a sound network is essential. Furthermore, Brazil has a lot of rules and regulation, you need a license for plenty of things. Therefore, we advise Dutch entrepreneurs who want to do business in Brazil to hire a good lawyer. Brazil also has a quite complex tax system, so next to a good lawyer, it is also important to have a good tax consultant. We are not really used to these issues in Europe, which increase the costs of doing business in Brazil. These extra costs are called ‘Custo Brasil’, which is a common phenomenon here. The Custo Brasil exist in all aspects of doing business. Hence, the productivity and effectiveness are somewhat lower than in, for instance, The Netherlands. Brazil is, after a long period of economic growth, currently in a state of recession. The GDP has shrunk for the sixth consecutive time in the second quarter of 2016. According to experts, a recovery is near. However, the Brazilian economy is still not really progressing. To what extent do you notice this economical recession in your daily work? “We clearly notice this. From a Dutch business perspective, Brazil has become less appealing. In 2012, we could easily attract many companies for a trade mission, while recently this has become significantly harder. ”Entrepreneurs also read negative coverage about Brazil in the newspapers, and make other investment decisions.” This is quite natural, but my message is: Brazil is a very large country, so there are many negative aspects about Brazil, and there many aspects that are positive. Ultimately, there is a negative economical growth now, however, that does not mean that the positive aspects are not interesting anymore for Dutch business. After the crisis has emerged, about a year or two ago, we have changed our direction and have started recruiting more actively in The Netherlands. By doing this, we inform Dutch businessmen about what is going on in Brazil and expand on the sectors that are still very attractive for Dutch entrepreneurs. Sectors like the logistic sector, agriculture, healthcare and also technology and innovation are still being invested in regularly, and are doing quite well. The political situation in Brazil has been quite instable. Michel Temer is the new president following the impeachment of former president Dilma Rousseff. This change of power has not gone without protest from parts of the Brazilian citizens. To what extent do you notice the political instability in Brazil, and what are the most important economical changes Temer is going to make with regard to Rousseff? “I would say that the worst instability is behind us now. This government is ready to make some measures that are highly needed. Reformation of the pension system and reformations in the area of labor law are very important and very radical decisions that have been pushed ahead for a long time. I think this government will probably take action. Employee protection is very high in Brazil, which makes the costs of hiring people very high, and is not very favorable for employment rates. The complex tax system is also something that needs an overhaul, but I don’t think that this government is capable of doing that in the limited time they have. An obstacle for this government is the very fragmented political landscape. There are a lot of small parties, which makes it hard for the government to run the country and push changes through the congress.” Corruption is a widespread problem in Brazil. On the Corruption Percepion Index, Brazil is in 76th place out of 168 countries, with a score of 38 (every country that scores below 50 is assumed to have serious problems in the area of corruption in the public sector). Could you tell something about the fight against corruption, is this a main focus of the government? “No, so far I have not seen any real measures to fight corruption. However, there is one measure that is important: it has become less easy for political parties to accept money. Political parties have to become a lot more transparent in the way they receive their funds. There have been local elections over here a few weeks ago, and this law has impacted political parties’ funds a lot. This shows that the measure is very effective, which is a good thing. Outside of this measure, I have not seen any other measures yet. Are there certain things you advise Dutch entrepreneurs who want to focus on the Brazilian market regarding corruption and transparency? “Of course, we do this all the time. Corruption is something you should stay away from, how hard this even may be. You will get sucked into a swamp where you cannot get out anymore. Luckily, we know a lot of companies that have stayed away from corruption and became successful. Next to corruption, we also think corporate responsibility is very important. Brazil is a very complex country with regards to, for example, the environment, deforestation, minority groups, labor law, etc. You can get your fingers burned on a lot of things like that, so the advice we give to companies is: ”prepare yourself very well, make sure you hire a good lawyer who prevents you from getting trapped in certain risks.” Having said that: if you have everything sorted, doing business in Brazil is a very good thing!”
Accounting Insight 2016: Exploring the future of accountancy
On behalf of the Accounting Insight 2016 committee, I would like to invite you for this event of the study association Asset | Accounting & Finance. The accounting profession is changing! There are many new developments that affect the profession of the current auditor. Lately, the accounting profession is very often in the news; headlines such as ‘The accountants have become cowards, and ‘Longing for the auditor as sparring partner’ are no longer shocking nowadays. Everyone is aware of the changes, but how does this really have impact on the future? Is there even still a future for the audit? Perhaps, in the long run, the current auditor will be entirely redundant. There are innumerable IT innovations going on, but what will be the consequences? Should we be happy with this or will this lead to the extinction of the profession? In addition, a reform plan is being implemented; this also requires in many areas a new approach within the accountancy world. It is important to continue to look to the future and to keep our expectations of the profession realistic. And who said the future will not be better than ever before? “Everyone is aware of the changes, but how does this really have an impact on the future?” During the symposium on November 22, will be a discussion about all these changes and reformation. Thus, the future of the audit will be the central theme. After a brief introduction of each statement, they will be discussed one by one by the panel of speakers and the audience. As a committee we are very pleased to introduce the following speakers of the evening: Dr. Nout Wellink (commissioner PwC), Drs. Jan Hommen (commissioner Ahold Delhaize), Drs. Christine Scheper RA (manager AFM), Drs. Johan Hopmans RA (partner Deloitte) and Drs. Martin van Dijke RA (CEO Van Oers). Chairman Prof. Dr. Eddy Vaassen RA, associated with Tilburg University, will lead the evening. Because of their knowledge in the field of accountancy and the experience they have accumulated in their careers, we are convinced that the speakers and the chairman will share very interesting insights with you. Moreover, this night gives you the opportunity to get in touch with four different accounting firms: KPMG, BDO, Joanknecht & Van Zelst and Wesselman. Before the start of the main event, the audiTTalk will take place in cooperation with these four firms. In this short session you will have the opportunity to get your CV checked and ask all your unanswered questions regarding the accountancy profession and your future role in it. Do you want to remain one step ahead of your future? Then you should definitely be present at this event! After this evening you will be fully informed with all the actualities within the accounting profession. Click here to register!
Fix the roof while the sun is shining (2)
The first part of this two-part article introduced the possibilities a government has to implement countercyclical policies: making use of automatic stabilizers and discretionary fiscal policy. This last part analyses the effects of the recent recessions on the development of the four components1 of the Dutch GDP. I conclude with a policy advice to the next government. Dutch households have got the highest mortgage debt of the Eurozone (€ 638 billion). As the virtual value of real estate seemed to rise by default, taking up (mortgage) loans was relatively easy prior to the crisis. People found themselves richer than they actually were, which resulted in excessive consumption. When the truth about real estate valuations eventually revealed itself, consumption expenditures needed to be cut. The Dutch consumption expenditures dropped by as much as 3.5% over the period 2007-20142, while GDP had a similar size in both periods (see graph). Furthermore, one may also observe a sharp drop in investments. As of difficult market conditions (less confidence and falling demand) companies went bankrupt and investments had been eliminated. Companies that were able to survive the crises scaled back their investments drastically. A corresponding result can be observed in the data: investments fell by as much as 15.8% over the years 2007 to 2014. Next to consumer spending, investments are still far from full recovery. Despite a decline of 18.6% in the 2007-2009 period, net exports (NX) have returned to their previous levels as early as 2011. At first, confidence in international trade declined, but this proved short-lived and net exports recovered rather quickly. Indeed, in 2014 net exports had increased by 40% compared to 2007. The exporting sector is often the first sector that kick-starts after an economic downturn. This is certainly applicable to the Netherlands as it is a small and open economy. Finally, government spending has not declined but increased at a slower pace than would have been the case without government intervention. In total, government expenditures increased by 5.4% over the years 2007 – 2014. Despite the implementation of some austerity measures, absolute government spending increased yearly. The budget cuts were primarily intended to counteract the effect of automatic stabilizers, which resulted in government spending increasing less quickly. ‘’… GDP could have been higher in 2014 if the government did not cut its budget and made use of expansionary fiscal policy.’’ In the end, especially thanks to an increase in exports, GDP recovered in seven years. Consumption and investment dropped significantly. Despite the fact that government spending showed a small increase, the government has made every effort to prevent this from happening. Its goal was to oppose the effects of the automatic stabilizers, leading to a prolonged recession. In other words, GDP could have been higher in 2014 if the government did not cut its budget and made use of expansionary fiscal policy. During a recession the government should implement countercyclical policies instead of procyclical ones. This will weaken the business cycle, lead to less volatility and mitigate the adverse effects of the downturn. Well, you could argue that the Dutch government did not have the means to implement expansionary policies during the recession. That’s totally correct. The Stability and Growth Pact (3% rule) obliged the cabinets Rutte I and II to deepen the recent recessions. As the government did not succeed in cutting the budget sufficiently in the years preceding the crises (when a boom was going on) and did not refrain from using expansionary fiscal policy, it had been implementing procyclical fiscal policy in an economic upturn. The government actually increased volatility. ‘’ The government will need to run a budget surplus (towards + 3%) to make countercyclical fiscal policies feasible in the event of a new recession.’’ To mitigate the effects of a new recession the government will have to go back to austerity measures once again. The government will need to run a budget surplus (towards + 3%) to make countercyclical fiscal policies feasible in the event of a new recession. The government will have to repair its roof right now because if we take a look outside, it stopped raining and the sun has returned. You will never know when it starts raining again… 1 Consumption (C), investments (I), net exports (NX) and government expenditures (G). 2 I have chosen the 2007 – 2014 period as the economy was almost equally large in terms of GDP in both years. This enables us to observe changes in the composition of the GDP. Max Pepels is a blogger at econooMax. Do you want to read more of Max? Visit the website of econooMax!
How to work and live in Brazil?
Rio de Janeiro: the city of samba, beach, carnival and caipirinhas. The Cariocas, which is the name for the inhabitants of Rio de Janeiro, love to party and enjoy the beach. However, work also needs to be done. It has almost been 2 years ago since I moved to Salvador, a city which is 2 hours away from Rio by plane, for the sake of love. I have been living in Rio for 8 months now because of work. Unfortunately I cannot mention the name of our company due to contractual arrangements with one of our clients. I would like to describe it as follows: our company is a global market leader in the area of temporary water- and waste water infrastructures and purification of water and waste-water. This company is established in the Netherlands, and has been active in Brazil for 4 years now. It has scaled up significantly due to a major sports event this year. At that time, I was appointed to be the Cluster Manager because of this event. After the event had ended, I started working as Account & Operations Manager at the office in Rio de Janeiro and we are fully occupied with new business. The road towards our great victory, however, has not been without setbacks and difficulties. It was one of the biggest challenges our company has ever faced. As a company which puts a great value on quality, we had to pull out all the stops to actually realize a high level of quality. Everything, really everything, changed every day and besides that, the Brazilians also have a ‘doing everything at the last moment’ mentality. “This is the essence of the Brazilian way of working: everything will be okay.” Do not worry. “Luc, fica tranquilo”….Well, that was an expression I got to hear a lot. My first experience in the preparation of the mayor sport event was at ‘Forte Copacabana’, the age-old fortress on the corner of the beach of the same name. We had to lay a water- and waste water system on ‘the roof’ of the fortress, which was a complicated operation. I had just been one week before I gathered all stakeholders; people who supply toilets, people who build stands, the venue manager and electricity suppliers. With Dutch blood flowing through my veins, I obviously wanted to make arrangements. Making strict agreements in order that the deliveries will be on time is what typical Dutchmen love to do. When I called on the stakeholders to their commitments in a quite direct way, I soon found out that this way was too firm. The responsible venue manager namely interrupted me: “yes, Luc is a ‘gringo’, a Dutchman who has a different work ethic than we have.” I immediately got a reality check, and I realized I have to approach people differently in the future. I was way too direct and I proceeded too quickly… “Fica tranquilo, Luc, Fica tranquilo.” The following months was a real struggle to meet all deadlines: we were always present at the venue, but we were dependent on other suppliers. With a lot of blood, sweat and tears, we met each deadline. In the end you could say that the Brazilians were right, everything fell into place in the end. HOWEVER, work could have been easier and conducted with less stress, if we had used our (Dutch) ethics. Building and maintaining relationships is really important in Brazil. You cannot just push your plans ahead out of the blue. “When a good foundation is laid for a relationship, it is easier and more pleasant to work with Brazilians.” Their work ethics will not change, but they are then more willing to put in more effort for you and they will ensure that everything will be alright in the end. Meanwhile, Brazilians dó look up to foreign companies. They associate foreign companies with high quality considering service and goods by default, which leads to a high expectation. Essentially, this is not a bad thing, but you have to be aware of this fact as a foreign company in Brazil, and you should not be afraid to maintain your reputation. In the social sphere, Brazilians are the best. It has been almost 2 years that I moved to Salvador, alone. I have never been given a warm welcome as here in Brazil. They are very sympathetic and hospitable, their door is always opened for you and they genuinely always want to help you. This is something us Dutchmen could learn from the Brazilians. One last piece of advice: Rio is not necessary unsafe, but you do have to be alert and not just walk into a random neighbourhood and you have to store valuables in a safe place. I encourage you to look on every neighbourhoods safety, and filter them on safety. I wish you a lot of luck and fun in Rio de Janeiro, I am sure it will be a trip you will never forget!
High pay for asset managers makes the world poorer
Many asset managers don’t invest their own money. They invest the money of mutual funds, banks, insurance companies or pension funds. In those cases asset managers are typically rewarded with pay-for-performance schemes (bonuses), which are meant to incentive asset managers to outperform the market. As the substantial bonuses are added to an already impressive base salary, the job of asset manager is among the best paid world-wide. On the face of it, this all makes sense, as it is both extremely difficult to outperform the market and extremely lucrative if it is pulled off. The promise of outperforming the market is then the sole justification for the generous remuneration of asset managers. If asset managers could not beat the market, then the only thing they basically would have to do is diversifying their portfolio to avoid idiosyncratic risks. That certainly requires some training and experience, but it is essentially a clerk’s job, and could be paid accordingly. “Even if some asset managers individually outperform the market that does not necessarily imply that bonuses are good for society at large.” The crux of the matter is that the average investor can’t outperform the market –for the market is the average investor. Collectively investors are thus not adding value. The gain of one investor is the loss of another, so asset management is ultimately a zero-sum game. In fact, collectively asset management is a losing game, as the average return minus costs is by construction lower than the market return (which equals the average return). Society as a whole loses, just like gamblers collectively loose (though individual gamblers may become incredibly rich). Now, it is sometimes claimed that a societal benefit of asset management is its so called price discovery function. By constantly trading shares and bonds, the “correct” price of securities is determined. There is something to that, but not that much. Share and bond markets are second-hand markets. The trading of securities does not provide companies with new capital. One could then argue that the price discovery function helps determining the “correct” price in case companies issue new shares or bonds. But it is unclear why that is helpful. In any other market, the price for a good or service is determined in the market itself where supply meets demand. Non-financial markets function without second hand markets signalling prices to the original market. Of course it still makes sense for individual mutual funds, pension funds and banks to reward investors who beat the market –who wouldn’t want to become incredibly rich. But collectively large bonuses make the world poorer. Gambling’s number one rule is that in the end the house always wins. In financial markets asset managers always win, as they receive extreme salaries for a clerk’s job.
