Tag Archives: infrastructure

The theme of Business Continuity Awareness Week is Cyber Security. No, really…

If businesses and public organizations needed a kick in the backside over their cyber crisis preparedness, then many got it over the weekend as the ransomware ‘Wanna Decryptor’ paralysed hundreds of thousands of users and systems in more than 100 countries, including hospitals and doctors’ practices in the UK National Health Service.

So the irony of this being ‘Business Continuity Awareness Week’ #BCAW2017 is only heightened by the fact that the theme of the week is ‘Cyber Security’. But the timing of this week – and the theme – couldn’t be better.Screen Shot 2017-05-15 at 10.08.25

As the hand-wringing, blame-gaming and shock-horror media coverage continues – it’s worth spending a few minutes leafing through the Business Continuity Institute’s guide on preventing cyber attack (this is safe to click, by the way). Sure, there is some VERY basic advice in the guide – like not using ‘password’ as your ‘password’, but don’t roll your eyes too quickly.  One in five passwords are things like ‘1234567’ or ‘qwerty’ – and other entirely predictable passwords. It’s clear people need reminding of the simplest security habits.

The BCI’s guide won’t solve complex IS security issues, but it’s often the weakest links that allow the hackers in to do their business.  That weakest link is commonly your company’s IS or information security policy (or lack of it) – and if you have a policy – how well employees have been trained to implement the policy AND how diligently they act on those policy requirements.

I’m in trouble – send money!

And finally, it’s not only the junior or non-techie employees who let the hackers in.  Scammers and phishers target all levels of an organization in an attempt to breach firewalls or just separate someone from their money.

I’m aware of one CEO who knew what a ‘419’ scam was (wonder how many of you opened that link…) and how to avoid it, but was nearly stung by another email scam.  We just managed to stop him from sending his credit card details (including the ‘magic code’ on the back) to an employee whose email to the CEO claimed he was in trouble abroad, having had his laptop, wallet and phone stolen and who needed credit card details for him to be able to book into a hotel for the night.  Except it wasn’t the employee’s internet email address and he wasn’t in trouble… and, and, and.

Is BlackRock’s CEO Larry Fink a champion of the worker, or an investment manager? Well both actually

Last year Larry Fink’s letter to CEOs of companies in which BlackRock invests urged them and their boards to look forward (as opposed to back) at strategic issues affecting value creation. (See my blog from 2016).

This year, his letter to CEOs urges them specifically to look at a ticking timebomb: the lifecycle of employees’ careers – not only ongoing retraining and ongoing education of workers, but also of actively preparing them for a secure, solvent retirement.

The letter covers some strategic corporate and governance issues on which BlackRock will hold companies to account, such as:

  • Globalization and more particularly the effect of automation on lower-skilled employees’ jobs and the consequent gulf in their earnings versus highly-educated employees
  • As an active, long-term investor, engaging with companies on behalf of their clients, and voting against incumbent directors or misaligned executive compensation, when companies are not sufficiently responsive to BlackRock’s input
  • Reviewing companies on Environmental Social and Governance (ESG) performance – often seen as an indication of a company’s appreciation of long-term factors that affect value creation and how seriously global companies see themselves as part of a local community
  • Research and technology and employees’ development and long-term financial wellbeing

Fink sees the government’s role as supporting the private sector in addressing these challenges by creating a capital gains regime that rewards long-term investment, tax reform, infrastructure investment and strengthening retirement systems.

On tax reform, he doesn’t want to see cash trapped overseas simply being repatriated in share buybacks, but used for strategic growth initiatives.  Infrastructure investment will promote employment and may go some way towards providing jobs to less skilled workers who have lost work as a result of their jobs being automated.  “However,’ he notes,’…it’s not a solution to that problem.”

headcount-cuts

Cutting the headcount

Companies that are currently struggling for technical talent must build their education and training capabilities in order to retrain existing employees for the new demands of the high-tech and connected workplace.  In ‘helping the employee who once operated the
machine to learn to program it’, companies will have ongoing access to talent, while fulfilling their responsibilities to their employees. Chopping out older employees and bringing in fresh talent, apparently, might not be sustainable or competitive.

And once employees reach retirement, Larry Fink is concerned by two issues:

First, that millions of workers are not covered by employer-provided retirement plans and he’d like to see this change via a selection of options, including auto-enrolment, auto-escalation, pooled plans for small businesses and ‘potentially even a mandatory contribution model like Canada’s.’

Second – as many pensions move from defined contribution to defined contribution/money purchase pensions, the financial planning and responsibility for retirement funds moves away from the employer and falls more on the individual pensioner.  In this context, companies have a role in ensuring that their employees become more financially literate, while asset managers also have a responsibility to educate investors so they can make smart investment decisions.

“If we are going to solve the retirement crisis – and help workers adjust to the globalized world – businesses need to hold themselves to a high standard and act with the conviction that retirement security is a matter of shared economic security,” writes Fink

Commentary: As the Baby Boomer population ‘bulge’ in the West creates more pensioners supported by fewer workers over the coming years, companies and governments must review their terms of reference.

Older workers, made redundant before retirement give the handloomsystem a ‘double whammy’ shock as an employee moves from being a net contributor to tax, their pension pot and social costs, to being an early ‘taker’ of benefits.

Companies look like they win twice with a reduced wage bill and no ongoing social or pension costs.

The option of passing older employees on to the State to look after, without penalty, seems to be an implicit incentive for companies to do just that.

This isn’t sustainable, but a last resort would be for governments to hike taxes charged to employers to pay for taking on responsibility for the companies’ ‘surplus workers’.

In this context, governments that find ways to encourage, support and incentivize companies to retain, retrain and educate their older employees will not only help in assuring continuity of employment but will also limit avoidable social security costs for unemployment and pension support.

Loom photo and header photo: Courtesy ILO. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO License. To view a copy of this license, visit creativecommons.org/licenses/by-nc-nd/3.0/igo/deed.en_US