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6th April 2021

THE HOT STORY

Credit Suisse risk chief to leave

Credit Suisse chief risk and compliance officer Lara Warner is leaving the bank as it deals with the fallout from billions of dollars of losses in the failures of US hedge fund Archegos Capital and UK supply chain finance firm Greensill Capital. Last week, the Zurich-headquartered lender revealed that it was expecting heavy losses in the wake of the meltdown of Archegos. It took a charge of $4.7bn as a result and now expects a first-quarter pre-tax loss of around $960.4m. Investment Bank CEO Brian Chin will also step down from his role with immediate effect, the bank said. Joachim Oechslin has been named interim chief risk officer and Thomas Grotzer interim global head of compliance. “The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable,” Credit Suisse CEO Thomas Gottstein said. “In combination with the recent issues around the supply chain finance funds, I recognize that these cases have caused significant concern amongst all our stakeholders. Together with the Board of Directors, we are fully committed to addressing these situations. Serious lessons will be learned.”

CNBC

Financial Times

WORKFORCE

Labour supply issues to hit UK growth

Analysts from Pantheon Macroeconomics warn that economic growth could stall in the 2020s due to Britain’s ageing population and lower rates of immigration. The forecast suggests that the growth rate in the UK’s workforce will halve as an immigration clampdown sees fewer overseas workers, with labour supply also facing a hit as the Boomer generation enters retirement. The report predicts that workforce growth will fall to an average annual rate of 0.3% over the next five years, down from 0.8% in the second half of the 2010s. Pantheon economist Samuel Tombs said: “The days of strong workforce growth are long gone,” adding that expansion in the 2010s had masked underlying weaknesses in the economy, such as “deficient business investment and sluggish growth in productivity.” HSBC economist James Pomeroy believes the working age population is set to shrink in the 2030s and may fall by the end of the 2020s, warning that this is “a massive fiscal problem when you’re taking on a lot of debt.”

The Daily Telegraph

Most companies silent on workforce data

Less than a fifth (19%) of the world’s largest listed companies disclosed data about their workforce in an annual survey run by the Workforce Disclosure Initiative (WDI), a $7 trillion investor coalition that is part-funded by the UK government and which seeks to improve the volume and quality of data on workplace issues. Out of 750 organisations asked to provide information to the survey, 141 (19%) did so in 2020. This was nevertheless a 20% increase from the 118 companies which responded in 2019. “Without this data, companies are effectively taking a shot in the dark, implementing practices without knowing who is in their workforce, and what it is that they need,” said WDI research manager Charlotte Lush.

Reuters

Boycott urged by Finnish Food Workers' Union

The Finnish Food Workers' Union wants a product of a small brewery located in the Kontula district of Helsinki to be boycotted because the beverage is produced in Estonia. The brewery has not attempted to hide where the beer is produced, but consumers could be misled by the brand name clearly referring to Helsinki's Kontula subdivision, reports Postimees. "We've made investments in Finland, hired people and paid taxes to the state. The attack by the Food Workers' Union is confusing because I don't remember ever seeing them calling for a boycott of foreign beer products," Matti Pesonen from Kontula Brewery said.

The Baltic Times

Baltic Times

CORPORATE GOVERNANCE

Atos auditors identify accounting errors

French IT firm Atos has announced that its auditors found accounting errors at two of its U.S. subsidiaries, and were unable to verify its complete accounts ahead of the information-technology firm’s annual shareholder meeting. The two U.S. units, Atos IT Solutions and Services Inc. and Atos IT Outsourcing Services LLC, represent 11% of the company’s revenue and 9% of its operating margin. The auditors found “several matters relating to internal control weaknesses over financial reporting process and revenue recognition” that led to several accounting errors, relating to an accounting rule that determines how a company reports revenue from its customers. The excerpt said Atos has hired external firms to investigate further, but those findings weren’t available in time for a Wednesday board meeting to approve the annual accounts for the company’s shareholder meeting on May 12th.

Bloomberg

Wall Street Journal

TRAINING & DEVELOPMENT

Why ranking employees by performance backfires

The FT’s Sarah O’Connor says “forced distribution” or “stack ranking” methods used to divide employees each year into a certain percentage of top performers, average performers and underperformers, should be scrapped.

Financial Times

HEALTH & SAFETY

One in five shift workers suffers from sleep disorders

About a fifth of shift workers suffer from sleep disorders caused by their work patterns, according to research by Helsinki University and the Finnish Institute of Occupational Health (TTL) which found that people with sleep disorders recover more slowly on their days off, and up to half of them can be constantly tired even in their free time. TTL researcher Päivi Vanttola observed: "Just like day workers, shift workers' insomnia and fatigue can be caused by an underlying illness, life situations or stress at work."

YLE Uutiset

RETENTION

Peloton bikes and shopping trips: how firms keep burnt-out workers

The world’s top professional service firms and banks have sought to head off a retention crisis among their overworked junior staff by handing out luxury gifts and generous bonuses.

Financial Times

STRATEGY

LME’s status at risk over Ring closure plans

The boss of liquidity hub Marex Spectron warns that a plan by the London Metal Exchange (LME) to abandon its trading floor could leave it indistinguishable from rivals such as CME and put its status as the leading price-setting venue in the global metals market at risk. “At the moment the LME is the premier price-setting venue for metals,” Ian Lowitt said. “It’s a risk for the LME that it just becomes very similar to all the other exchanges and loses what’s distinctive about it. If they just become a lookalike to CME, then are they able to maintain that distinctiveness?” His comments add to a growing backlash against the LME’s plan to close The Ring - the last open outcry market in Europe - in favour of electronic pricing.

The Times

INTERNATIONAL

Saudi Arabian companies targeted in transformation drive

Saudi Arabia's Crown Prince Mohammed bin Salman says the kingdom’s largest listed companies will be encouraged to reduce their dividends and redirect the money back into the economy. “We've seen the government using a stick to get foreign investors to come into Saudi Arabia, and now they are using it on domestic investors,” said Tarek Fadlallah, the Dubai-based chief executive officer of the Middle East unit of Nomura Asset Management. “I'm not a fan of government intervention in the private sector, but Saudi has limited ways to incentivize companies, so partnering in this way could help encourage more investment.” Twenty-four local firms, including Saudi Basic Industries, Almarai, Saudi Telecom and National Shipping Co. have agreed to join the plan and invest 5 trillion riyals ($1.33 trillion) in the Saudi economy, according to Prince Mohammed, who said the companies will have access to subsidies and be able to lobby for regulatory changes. Bloomberg observes that investors may have difficulty in deciding whether such state involvement in corporate decision-making will ultimately create value given that none of the companies identified as participating in the plan has yet said how much they could invest.

Amazon sees a return to offices by fall

Seattle-headquartered Amazon has told employees in a companywide announcement that it is planning a “return to an office-centric culture as our baseline.” A move away from remote working is expected to conclude by autumn, according to a staff announcement which observed that working in offices “enables us to invent, collaborate, and learn together most effectively.” Downtown Seattle business owners that rely on Amazon office workers for custom welcomed the news. “Any time you’ve got an employer of [Amazon’s] scale and size . . . that has an outsized impact of ‘feet on the street’ on the restaurants and bars and cafes and other small businesses around them, that are now able to maybe be more stabilized and keep their doors open and make it through this,” said Jon Scholes, president and CEO of the Downtown Seattle Association, adding it’s “a huge deal.”

Seattle Times

Lawyer spends 600 days under house arrest

The Guardian profiles lawyer Steven Donziger, who has been detained at home for 600 days amid a “Kafkaesque” legal battle with oil giant Chevron. Donziger spearheaded a crusade against the company on behalf of Indigenous Amazonians whose homes and health in the rain forest were devastated by oil pollution. He says he is the victim of a “planned targeting by a corporation to destroy my life.” A court-mandated monitoring bracelet is strapped to his ankle, after a US federal judge hit him with criminal contempt charges after concurring with Chevron about alleged fraud in a judgement against the oil company. Chevron has “captured” the judge, Donziger said.

The Guardian

OTHER

Apple adds two new Siri voices

Apple is adding two new English language voices to its Siri voice assistant in an upcoming version of its iPhone software, eliminating the default “female voice” selection. The change is currently available in a beta version of iOS 14.5 that was released on Wednesday. Apple previously said the update will be released for everyone sometime in “early spring”. Digital assistants with default female voices have been scrutinized by researchers in recent years, with critics saying the choices reflect a male-dominated artificial intelligence industry and reinforce stereotypes. Apple previously offered male voices as the default in some regions, as well as Australian and British accents, but it has defaulted to a woman’s voice in the U.S. since its release in 2011.

Tech Crunch

CNBC

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