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| In this newsletter: Benchtest 05.2019, National Pension Fund Part 5, treating your customers fairly |
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Phasing out of cheques - reminder
If you want to find out whether your service providers are registered, or whether you need to establish directly from NAMFISA because the service provider does not appear on the list, use this link...
In our ‘Benchmark’ column we welcome SatCom
In ‘News from NAMFISA’ we present –
In ‘Legal snippets’ our guest writer considers how to dispose of unclaimed benefits in the light of the requirements of the Administration of Estates Act versus those of the Pension Funds Act.
 Monthly Review of Portfolio Performance to 31 May 2019 In May 2019 the average prudential balanced portfolio returned -2.8% (April 2019: 2.7%). Top performer is Investment Solutions Balanced Fund -1.3%, while Allan Gray Balanced Fund -4.0% takes the bottom spot. For the 3-month period, Stanlib takes top spot, outperforming the ‘average’ by roughly 1.1%. On the other end of the scale Allan Gray Balanced Fund underperformed the ‘average’ by 1.0%. Note that these returns are before asset management fees. Have investment markets normalised? It is pretty much common knowledge that the situation we are and have been facing in investment markets globally for the past nearly 10 years, is the result of ‘ultra-loose’ monetary policy by central banks across the world, including Namibia. After the financial crisis, central banks poured money into the financial markets in order to encourage the consumer to pick up spending levels again after these had fallen flat in the aftermath of the financial crisis. Artificially low interest rates, designed to encourage spending, were great for the borrower, but bad news for the depositor, pensioners to a significant extent. In many instances depositors would earn negative real interest rates. To avoid this they would have been looking around for any asset class that offered any real returns. This is what we have seen, where all assets other than fixed interest investments experienced significant inflows resulting in their artificial and unsustainable growth. This was certainly the case until the US Fed thought that it had achieved its objective of re-igniting economic growth. It started to raise the Fed rate for the first time in December 2015 when it looked like inflation was ticking up. At that point inflation has just turned positive and grew to 2.95% by April 2018, only to start turning down again since then to currently only 1.7%. The Fed rate was increased to 2.5% in December 2018 to stagnate since then and recent talk being for it to be lowered again. The US Fed rate currently represents a real return of only 0.8%. Going by its long-term average the real rate should be around 1.7% in a normal interest rate environment. Read part 6 of the Monthly Review of Portfolio Performance to 31 May 2019 to find out what our investment views are. Download it here... Treating your customers fairly – what’s good for the goose should be good for the gander Two interesting news snippet that caught my eye read: “GIPF gambles with pension money. The government borrowed N$34 billion (latter corrected to N$ 11 bn by Minister of Finance) from the Government Institutions Pension Fund (GIPF) in the last four years, a most definite sign that the state is increasingly relying on the national pension fund to pay its operational budget shortfalls. This practice has raised concerns from experts who warn that the GIPF could fail to pay pensioners on time if the government goes broke. The GIPF, which has assets totalling N$116 billion at the end of 2018, had about 106,000 civil servants as members.” – The Namibian “The Namibian Government may default on GIPF debt. Although it is not illegal for the government to borrow from the Government Institution Pension Fund, some financial experts believe that national rules favour the government to raid the national pension fund. According to the expert who spoke to the Namibian, the GIPF is also elbowing out private companies which want to win government bonds by bidding high price/low yield, and in so doing, dictating how much the bonds should cost. University of Namibia risk management lecturer Samuel Nuugulu told The Namibian last month that the GIPF’s exposure to government bonds is a cause of concern, given the increasing number of people retiring from government service, as well as the high life expectancy in the country.” – The Namibian So why is this interesting? Well section 19(4) of the Pension Funds Act reads “No registered fund shall invest any of its assets in the business of an employer who participates in the scheme or arrangement whereby the fund has been established or in any subsidiary company (as defined in the Companies Act, 1973 (Act 61 of 1973)) of such employer's business or lend any of its assets to such employer or subsidiary company: Provided that the Minister may exempt wholly or in part any fund established or conducted by a statutory body or a utility undertaking from this provision.” So the Minister may exempt his pension fund to invest in his employer. Doesn’t this constitute a serious conflict of interest and fly in the face of one of the key protection mechanisms of the Pension Funds Act? In addition, given the GIPF’s overwhelming size relative to the rest of the industry and relative to the Namibian economy, doesn’t this also pose a serious systemic risk? It is also relevant to consider section 19(6) of the Pension Funds Act, which reads “The registrar may, under exceptional circumstances, and on such conditions for such periods as he may determine, temporarily exempt any fund from compliance with any provision of subsection (4), (5) or (5B)(a).” So the Namfisa CEO, as registrar, may grant temporary exemption. And this responsibility is taken very seriously by the registrar. For example a fund that invests in a unit trust, which invests in Stimulus, which has invested in the principal employer of the fund, amongst its many investments, is required to establish what its effective investment in the employer is, even though there is no proximity between the employer and the fund’s investment, none more than that of an investee company of Stimulus that may coincidentally be a major customer of the employer. In another instance a pension fund holding an investment in the listed shares of one of its participating employers is required to also add its operating bank account balance to this investment to really get to the bottom of its exposure to the employer. These funds must apply for exemption to the registrar and as a rule such exemption is only granted for between 1 year and 3 years and is capped at 10% of the assets of the fund. When conflict of interest reigns, fairness fades. What’s good for the goose should be good for the gander, not so? On the one end the measure is bent to breaking point while on the other it is stretched to the point of ridicule. The objective of the Pension Funds Act to protect the interests of the members of the fund at all cost is very sound but maybe we have lost sight of what the Act tries to achieve and maybe we have become excessively dogmatic? Some introspection should serve good purpose in this discussion! Provision for late payment interest in fund rules Fund rules more often than not, are silent about any interest payable from the time of a member’s termination of membership of the fund. Late payment interest (LPI) is usually a rate as determined by the trustees in their utter discretion. If LPI is not specified in your fund’s rules it is always taxed as long as there is an encashment of the benefit. On the other hand, if LPI forms part of your fund’s rules, it may be to the benefit of members as LPI will be taxed as part of the relevant benefit due e.g. in case of a retirement claim, the one-third portion of the benefit to which LPI applies will not be taxable. Another factor to take into account is that a draft standard to be issued under the FIM Bill prescribes the inclusion of LPI as part of a benefit payable from a Fund. For the sake of avoiding income tax and to pre-empt the provisions of the FIM Bill we suggest that funds consider including LPI in their rules. The Administration of Estates Act – where do we stand? An amendment on the Administration of Estates Act (Government Gazette 6813 of 31 December 2018) has been passed by parliament and signed into law on 31 December 2018. It requires with immediate effect, that all monies payable to minors and persons under curatorship payable from pension funds, insurance policies, annuities and even from deceased estates, to be paid to the Guardians Fund in the Master’s Office. This Amendment Act applies ‘notwithstanding any other law’. It thus overrules every other law including the Pension Funds Act. NAMFISA circulated a notice to pension fund stakeholders with a copy of a letter issued by the Minister of Justice on 22 January in which stakeholders including pension funds and their administrators are informed that “The Minister of Justice has decided, in the interests of all concerned stakeholders, to consult with the industry members to discuss the implementation of the Amendment Act. These consultations will take place during the second week of February 2019…Until such time, all affected institutions are advised to continue making payments for the months of January and February 2019 in terms of their mandates prior to 31 December 2018.” On, 12 February 2019, the Minister called for a public consultation session at the Country Club, which was very well attended including RFS representatives. From these discussions it seems that the Minister will not repeal this law but is open for further amendments based on concerns raised by industry. In summary his concluding remarks were as follows:.
We have coincidentally come across a letter by the Minister to various stakeholders but not to the pensions industry, dated 9 May wherein the Minister acknowledges the contributions received from various stakeholders and hastens to point out that he has not been amenable to all proposals for changes. He also makes reference to a consultation to be held in the second half of June. Find the letter here... To our knowledge this consultation has not taken place. Many funds had resolved to continue paying benefits to minors as before the amendment of the Administration of Estates Act came into force. In doing this, funds are in breach of the law. The fact that both NAMFISA and the Minister of Justice have seemingly condoned this will not carry any weight before a court of law. It places funds in the unenviable position that beneficiaries may argue from both positions, i.e. the fund should have applied the law to achieve a better outcome for the beneficiary or because it did not apply the law the beneficiary is now in a worse position! Death benefits and circular 04/2019 I must say when I first read this latest NAMFISA Circular while on overseas holiday, I thought that it only states the obvious and saw no fault with it as it merely cites the definition of ‘member’, ‘dependant’ and section 37 C, quite correctly. Back in office I read the circular again. To my mind it only refers to a lump sum benefit arising upon death of a pensioner member for which the rules do not designate a beneficiary. The circular is certainly ambiguous! It seems though that the regulator attaches a very different interpretation to this circular. The regulator appears to interpret section 37 C as prohibiting a fund to offer annuities to children and spouses when a fund member passes away. The Act does not draw any distinction between a pensioner member and an active member and the circular would thus be equally applicable to both categories. Where the rules offer specified benefits to a spouse and or children following the death of the pensioner (or active member) such benefit is payable in terms of the rules and in my humble opinion does not fall under section 37C or the Circular. In years gone by, spouse’s and children’s pensions were a very common benefit offered by most funds. Some of the largest funds in Namibia today still offer such benefits such as the GIPF most prominently. In the new circular, the regulator now seemingly requires funds that offer such benefits to amend their rules. Besides the fact that I wholeheartedly disagree with NAMFISA as I will explain further on, such a rule amendment would imply a change in the conditions of employment which I as an employee, would certainly not accept. Imagine 100,000 government employees having to give up such exceptionally important benefits and imagine government having to enter into a consultation process with its 100,000 employees to give up these benefits, because the regulator has now all of a sudden decided to attach a new interepretation to section 37 C of the Act! The definition of ‘pension fund organisation’ explicity makes provision for lump sums or annuities to members, former members after retirement, or their dependants: “(a) any association of persons established with the object of providing annuities or lump sum payments for members or former members of such association upon their reaching retirement dates, or for the dependants of such members or former members upon the death of such members or former members; or...” How am I to understand this definition then other but explicitly allowing a fund to offer annuities to spouses and children being dependants of such members or former members (i.e. fund pensioners)? New regulation and standards issued under the FIM Bill RF.S.5.24 - Manner and form of application for registration of a fund Application for registration must be done per form in Annexure A signed by –
RF.S.5.25 - Form of certificate of registration for a fund This prescribes the format the certificate of registration will take. Our comment:
Minister may allow the following funds to invest in or lend to a participating employer or its subsidiary for determined period and conditions, if fund has certified that such investment is in terms of its rules and investment policy:
Our comment:
The FIM Bill to be tabled in parliament Report back from parliament by Monika von Flotow, Manager: Projects at RFS The NAMFISA Bill and Financial Adjudicator Bill were tabled and motivated in Parliament on June 25, 2019 – the debate was postponed to July 3, 2019. The FIM Bill was then tabled and motivated in parliament on 26 June 2019. Concern was raised regarding timing of the Bill due to its volume and complexity and the number of industries involved. (It was acknowledged that it important, but not urgent..) A proposal to postpone to September 2019 was rejected by the Minister of Finance, arguing that once it’s off the agenda it will receive no attention. The Speaker proposed that the Chief Whips of the various political parties should meet to consult on the way forward; an announcement can possibly be expected very soon. Pension fund governance - a toolbox for trustees The following documents can be further adapted with the assistance of RFS.
 From a former fund member “Good afternoon I acknowledge to have received the document. Working in Namibia again and recommendation to others on the best Pension Fund, I would choose Benchmark thank you. Regards” Read more comments from our clients, here...  The Benchmark Retirement Fund welcomes SatCom Benchmark Retirement Fund takes further strides on its course to become the biggest retirement fund in Namibia (just joking... it will never get anywhere close to the GIPF). Nevertheless, it could by now be the 4th largest fund in Namibia in terms of assets under management, including the GIPF, thanks also to the latest sign of confidence by SatCom, manufacturer of communication equipment for military purposes, that has taken the decision to join the Fund. We welcome SatCom and its staff and look forward to serving you beyond expectation for many years to come!
 The Retirement Fund Solutions Winter Classic 2019 volleyball tournament The third of 7 Timeout Beach Series 2019 events took place on Sunday, 26th May 2019, at DTS Beach Arena, Windhoek. The Retirement Fund Solutions Winter Classic 2019 saw a huge turnout of over 100 athletes participate in 4 categories; 2-a-side Men’s, Ladies, Social, and 4-a-side Social Mixed. The Timeout Beach Series 2019 makes its fourth stop of the year at DTS Beach Arena for the Clausthaler King of the Court 2019 in July. Official Results:
 Above: Stefanus Kangandjera (left) Bernhard Schurz (right). Photograph: Steve K Photography.  Above: Nonofo Motswetla (left) Tony Orapeleng (middle) Bernhard Schurz (right). Photograph: Steve K Photography.  Above: All ladies category teams (1st Place Rosi Hennes & Almut Hoffman on the left). Photograph: Steve K Photography. Long service awards complement our business philosophy RFS philosophy is that our business is primarily about people and only secondarily about technology. Every time a fund changes its administrator, a substantial amount of information is lost be it physically or knowledge. Similarly, every time the administrator loses a staff member, it loses information and knowledge. We know that as a small Namibia based organisation we cannot compete with large multinationals technology wise because of the economies of scale that global IT systems offer. To differentiate us we need to focus on personal service and on the persons delivering that service to get customer acceptance and service satisfaction. With this philosophy we have been successful in the market and to support this philosophy we place great emphasis on staff retention and long service. The following staff recently celebrated their 5 year work anniversary at RFS! We express our sincere gratitude for their loyalty and support over the past 5 years to:
Unique comfort factors offered to our clients Our executive committee:  Our executive committee of 11 staff boasts the following credentials:
How RFS measures up: RFS answers to the key requirements of board of trustees as set out below.  Fund administrators should answer to a few key requirements, set out below that every board of trustees should have.   Stefan du Preez to head Alexander Forbes Reliable information has it that Stefan du Preez, who was formerly employed as actuary at Sanlam Namibia, was appointed to head up Alexander Forbes Financial Services in Namibia. This is another senior appointment at Alexander Forbes of a former Sanlam employee. The question begs to be asked whether Sanlam has a strategy to take over Alexander Forbes as rumours blowing over from SA have it? If that is the case, it is consequent to ask whether Sanlam Namibia is contemplating to re-enter the fund administration industry in Namibia? RFS appointed as administrator to Napotel In conclusion of its tri-annual tender process, the Napotel Pension Fund recently resolved to appoint RFS as its administrator as from 1 October 2019! We sincerely appreciate this gesture of trust and comfort in our capabilities and look forward to a long lasting association over many years to come! Considering that we served the Napotel Pension Fund from 1 October 2001 to 31 March 2016, it is appropriate to say – welcome back Napotel, we are really pleased and proud to have you back! Orbis proposes changes to some of its fee structures Orbis has proposed a change to the fees on most of its funds available to African investors. The change is intended to make the fee structure more ‘reactive’, so that the fee being charged will more accurately reflect an investor’s current experience. “This is not something we are doing in reaction to the last year of underperformance,” says Lamb. “We think this is a better fee through the cycle.” The main funds affected by the proposed changes are the Orbis Global Balanced Fund and the Orbis Global Equity Fund, which will also then reflect in the Allan Gray-Orbis Global Equity Feeder Fund. The first component of the new fee is that it will be meaningfully lower when the fund performs in line with its benchmark. At this level the funds currently charge 1.5%. Under the new structure, they will charge 1.1%. However, the potential for Orbis to earn additional fees for outperformance will be significantly greater. Currently, Orbis earns around 12% of outperformance as a fee. The proposal is to increase this to 25%. The total fee charged will also be uncapped – both to the downside and the upside. Read the full article by Patrick Cairns in Moneyweb of 19 June 2019 here... The price of fuel – do you know what you pay for? The latest fuel levy was set in Government Gazette 6928 of 5 June 2019 and reflects an interesting composition of the price of fuel as per below table. The total for Namibia is based on an estimated annual consumption of 1 billion litres of fuel in Namibia.
 New regulation and standards issued for industry comment NAMFISA issued the following regulation and standards on 19 June, for industry comment by 22 July 2019:
Industry Meeting 13 June 2019 A pension funds industry meeting was held on 13 June 2019. The presentation contain interesting statistics on fund investments and unlisted investments specifically. It provides an exposition of issues experienced with regard to CoA returns and of circulars recently issued. If you missed the presentation given by NAMFISA officials, download it here... Requirements for registration of special rules NAMFISA communicated new requirements where an employer is tranferring from one fund to another fund. Accordingly when special rules are submitted for registration, the following is required:
If you want to acquaint yourself with directive 05/2015, find it here... Unclaimed Benefits Circular In this circular NAMFISA takes issue with funds failing to observe the following prescriptions when disposing of unclaimed benefits of 5 years and older:
Circular PF/03/2019 – Death Benefits of Pensioner Members NAMFISA issued this circular on 27 May 2019. Although it refers specifically to death benefits of pensioner members, the contents of the circular will equally apply to death benefits of ‘active members’ as the reasoning is based on the PF Act and the PF Act makes no distinction between a pensioner member and an ‘active member’ but only refers to a member. In short the circular provides as follows:
NAMFISA just released new version of the -
Meeting between industry and Inland Revenue NAMFISA invited all interested parties from the pensions industry to a meeting that was held with Inland Revenue on 26 June at NIPAM. The following topics were placed on the agenda by industry participants:
 Disposal of unclaimed benefits: The Administration of Estates Act vs the Pension Funds Act A guest contribution by Andreen Moncur BA (Law ) Disposal of unclaimed benefits: The Administration of Estates Act vs the Pension Funds Act Unclaimed benefits from a retirement fund are regulated by the Administration of Estates Act 66 of 1965 (the Estates Act) and the Pension Funds Act 24 of 1956 (the PFA). Let’s examine unclaimed benefits from a retirement fund in terms of the applicable legislation: Since the promulgation of amendments to the Estates Act effective from 30 December 2018, s 87A of the Estates Act applies on the withdrawal, death, disablement or retirement of a member where benefits are payable to a minor or to a person under curatorship. For purposes of the Estates Act a “minor” is a person under the age of 21 years. A person is placed under curatorship when he/she is no longer able to manage his/her her own affairs. The law distinguishes between the curator ad litem and the curator bonis. We are concerned with the latter type of curator, i.e. a legal representative appointed by the court to manage the affairs (finances, property, estate or person) of another person who is incapable of managing his/her own affairs due to mental or physical incapacity. The Estates Act requires any benefit payable to a member or other beneficiary who is a minor or under curatorship to be paid directly to the Guardian’s Fund within thirty days of becoming payable. Thus, for withdrawals, deaths, disablements or retirements involving payment of benefits to minors or persons under curatorship on and after 30 December 2018, unclaimed benefits cannot arise. Unclaimed withdrawal, death, disability or retirement benefits held by funds for minors or persons under curatorship that became payable before 30 December 2018 should have been paid to the Guardian’s Fund within thirty days of 30 December 2018. However, on 22 January 2019, the Minister of Justice addressed a letter to NAMFISA wherein he advised all retirement funds to continue making payments in accordance with their mandates prior to 30 December 2018. On 22 January 2019, NAMFISA issued a Notice for Information to retirement funds whereby NAMFISA appeared to endorse the Minister’s advice. At a consultative meeting between the Minister and all parties affected by the amendments to the Estates Act, funds were requested to continue making payments in the best interest of minors and persons under curatorship until such time as the Ministry of Justice issues a formal notification to the contrary. Unclaimed withdrawal, death, disability or retirement benefits held by funds for members and other beneficiaries who are not minors, nor persons under curatorship, become subject to the provision of the Estates Act only once such benefits have been unclaimed for five years or more. Section 93 of the Estates Act requires each retirement fund to publish in the Government Gazette each January a detailed statement of all unclaimed benefits held by the fund on 31 December of the previous year that at the time of preparing the statement have remained unclaimed for five years or more. Three months after the date of publication of the statement, the fund must deposit in the Guardian’s Fund to the credit of the beneficiaries concerned, all such amounts remaining unclaimed. Interestingly, the PFA does not mention unclaimed benefits, probably because the legislature felt that the matter fell within the purview of other legislation such as the Estates Act. This certainly seems to be the view of the Registrar of Pension Funds as evidenced by NAMFISA Circular PI/PF/07/2015. This circular prohibits the reversion of unclaimed benefits to a retirement fund after any period and requires funds to pay any benefits unclaimed for five years or longer to the Guardian’s Fund in accordance with s 93 of the Estates Act. Said circular also provides for the payment of unclaimed benefits to the Guardian’s Fund before benefits have been unclaimed for five years if the fund rules so provide. The sole exception hereto would be s 37C(1)(c) of the PFA in terms whereof the death benefit or the relevant portion thereof must be paid into the Guardian’s Fund if within twelve months of a member’s death, the fund does not become aware of or cannot trace any dependants and the member has not designated a nominee or has designated a nominee to receive less than the full benefit and the member does not have an estate.  The potential unintended consequences of prescribed investments “Over that decade [of prescribed investments in SA], inflation in South Africa averaged 11.3%, and prescribed bonds delivered a negative real return of 4% per year. Equities returned 13.2% above inflation over the same period. As pension funds were forced to invest at least 53% of their portfolios in government and state-owned company bonds, they had to be exposed to their relative underperformance, even though local equities were enjoying such a strong run.  Source: Asisa It is extremely difficult to align this with the responsibilities placed on pension fund trustees under Regulation 28. The regulation insists that trustees have a “fiduciary responsibility” to manage the fund’s assets responsibly and to deploy capital into markets that will “earn adequate risk adjusted returns”. They simply can’t do this with one hand tied behind their backs...” Read the full article by Patrick Cairns in Moneyweb of 14 June 2019, here... Making retirement fund contributions meaningful “Alexander Forbes Member Watch analyses over one million retirement fund members' behaviours and retirement outcomes. It has found that more than 50% of pension fund members who retire each year receive less than 20% of their pensionable salary as an income in retirement. "The first problem is that people don't consciously connect what they are contributing now and what happens when they retire in the future. It is an abstract concept that people struggle to connect with," says Lange. Generally most members default into the lowest contribution category. If you're saving 13% of your pensionable salary for your entire working life, you will get less than R60 for every R100 earned at retirement, as a pension income. But if you're saving 17%, then R75 for every R100 is achievable, explains Lange. If you are currently 40 years old, you should have saved at least 3.2 times your current annual salary. By age 65 (at retirement) you need to have saved 12 or more times your annual salary. This is calculated on a 75% replacement ratio. Auto-escalation of contributions over time could be a way to increase contribution rates without significantly affecting employees' take-home pay. This concept has worked around the world to raise contribution levels, according to Lange. A small 0.25% increase each year since 2012 at salary increase time would have led to a 1.5% of salary contribution rate increase by 2018, leading to an almost 10% improvement in expected retirement benefits for younger members...” Read the full article in Fin24 of 5 May 2019 here...  Don’t fall victim to the switch itch “Our brains are very much like a central processing unit (CPU) for the world we live in, and a pretty effective one at that. However, with the modern age having brought exponential complexity to our decision-making process, our cognitive biases – or bad mental habits – result in an actual cost over time in the form of lower investment returns. This cost is commonly referred to as a “behaviour gap” and, for investors, is often attributed to the “switch itch”. This is according to Paul Nixon Head of Technical Marketing and Behavioural Finance at Momentum Investments, who says that the switch itch – which refers to the urge to change investment funds – is best explained by the theory that losses are experienced roughly 2.5 times as much as the equivalent gains. “This theory suggests that investors are 2.5 times more likely to switch funds as a result of their current fund performing poorly, than as a result of another fund performing exceptionally well...Nixon suggests the following simple tips to help investors quell bad investment urges:
This is how much your investment behaviour is costing you “...Trying to time the market or pick where it might be best to move your money is rarely more productive than simply staying invested. This is emphasised by a study conducted by Momentum Investments and the North-West University into the cost of investor behaviour. The research covered approximately 17 600 investors who had money on the Momentum Wealth Platform between January 2008 and January 2018, and investigated what impact switching funds had on their outcomes. “We had a look at each investor, and what their strategy was when they started the journey, and compared that against what they ended up with after they changed funds,” explains Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments. “We then tracked the two journeys. We looked at original strategy and what return they could have got, and compared that against what they actually got.” What the study found is that 64% of investors switched funds based on past performance. An annual return from their fund of 3% or more below the previous year tended to trigger a switch to an alternative fund. Doing this, however, resulted in a behavioural cost of 1.38% per annum for some of these investors. Similarly, a return of 25% on a fund in which they were not invested tended to trigger a switch into that fund. Once again, however, this had negative consequences. It resulted in a behavioural cost of 1.05% for some investors. Overall, nearly one in four investors incurred a behavioural cost of 1% per annum. That may seem small, but compounded over time it becomes substantial...” Read the full article by Patrick Cairns in Moneyweb of 3 May 2019, here... The one word that negates what Harvard professor says is leadership’s central issue “John Kotter is a legend in the world of leadership and change... One particular thought of his stands out to me above all others. According to Kotter, “the central issue [of leadership] is never strategy, structure, culture, or systems. The core of the matter is always about changing the behavior of people.” As a leader, you want your people to choose to do the right things, to interact in positive ways with your customers, and to apply best practices. You want them to act in the best interest of the organization and take on new, more effective, behaviors. And, you want them to choose to do these things because they see value in doing them - not because you are lording over them or because of an organizational policy... Have you ever tried to change your own behavior? It's tough... Have you ever tried to change someone else's behavior? It's really tough... Have you ever tried to change the behavior of many people? It's really, really tough. It's called being a leader... You start with changing paradigms. People behave differently when they see things from new and different perspectives... if he sees the change as a short-term sacrifice for a long-term gain, if he understands why the change is happening, and if he is given a voice in the process, his willingness to change can go way up... Luntz explained that the word imagine is one of the most powerful words in the human language. He said that more leaders should put the word to use... When a leader harnesses the power of the word imagine she can help people see what's possible, how they can overcome an obstacle, or what things can look like in the future if they go a new direction. Arguably, this one word has the power to help you accomplish the biggest leadership challenge you face - changing the behavior of others...” Read the full article by Patrick Laddin in Linkedin of 19 April 2019, here...  Did you ever wonder why?? WHY: Why are people in the public eye said to be 'in the limelight'? BECAUSE: Invented in 1825, limelight was used in lighthouses and theatres by burning a cylinder of lime which produced a brilliant light. In the theatre, a performer 'in the limelight' was the Centre of attention. |
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