CEO Remuneration 2021 Report: Breaking into New Ideas and Fresh Realities

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Tuesday, August 03, 2021 / 05:50 AM / By Proshare Research / Header Image Credit:  EcoGraphics


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Unlocking Potentials through Collaboration: A COVID-19 Legacy

As markets and economies gradually emerge from the ruins of the pandemic, it does appear that only very few businesses have figured out the workings of the next normal, yet those corporations which would make the most of the newly found chest of treasure- the enormous powers of collaborative thinking and actions- would hold the ace in a new world.  In retrospect, the challenge of COVID-19 presented managers with a set of fresh and innovative management styles, which at any rate would define the future workplace and business world.

 

Managers had to ask questions about the very essence of the businesses they run, the processes they supervise, and the basis of the competitive advantage they seek, to develop cost-saving and efficient techniques required to address rapidly dwindling revenues and bottom lines. One of such powerful ideas is the rule of collaborative planning and goal setting. At the height of the COVID-19 pandemic, corporate decisions in futuristic companies were taken only after considering the vast miscellany of issues concerning employees' safety as well as consulting with them.  In a social distance world, employers realized that an emotionally invested workforce is an asset to the organization, unlike individuals who 'work' for the organization and to whom the corporation has an obligation. 

 

In terms of how completely business risk and opportunities were perceived, there had to be a marked difference between firms that had a workforce who 'worked for' them and corporations which had staff which it 'worked with'. The latter tend to be more efficient in identifying threats and opportunities from the activity of rival firms, the dynamic preferences of suppliers and buyers, and the introduction of substitute goods since each staff is committed to the success of the business. The former on the other hand relied on structured interviews, surveys, and other traditional feedback channels which had to be less efficient given the very unusual business environment we had during the pandemic.

 

During economic downturns, uncertainty and stress make individuals tend to be overly self-conscious and so self-preservatory traits are at their height, yet while all and sundry had to work individually from home, workers who had an antecedence of collaborative work, functioned much more as a system than a bunch of workers who had before the pandemic only worked in the same unit or within the same workspace. Now, for organizations that realize that there is no going back to work, as usual, the need to reimagine the workspace or consider its complete removal, has become very apparent. More fundamentally, how to get employees to be invested and attentive at work now preoccupies forward-looking managers, who are deviating from the norm which requires workers to observe a plethora of workplace protocols.

 

Workplace collaboration: Choosing Collaboration over Teamwork

In the wake of the severely disruptive pandemic, hitherto collaborative structures had members who naturally were predisposed to acting as proactive collaborators and thus participated actively in the process of gathering information about the peculiar threats and opportunities which now confronted the corporations. Further, collaboration allowed for brainstorming ideas, employment of group discussions to analyse problems, to reach a consensus about the nature of these problems as well as to proffer solutions.

 

The nature of the 'epicentre' in workplaces, essentially marks the point of departure between a team structure and a collaborative one. While teams are basically about the lead, collaborative structures are weaved around certain well-defined goals, as result members tend not to task themselves as much as they would under a collaborative structure.

 

In recent research carried out by Delloite Australia, Australian firms with a collaborative strategy were found to outcompete their rivals and record higher profits, this could be attributed to the fact that such firms tend to have employees that are 15% faster, 73% more likely to come up with the superior quality of work, are generally more innovative and more satisfied with their roles. A similar study found that workers while working collaboratively could remain on the same task without fatigue 65% longer than if they worked as individuals in a team (see illustration 8 below).

 

Illustration 8 - Collaboration: A Tool for Environmental Scanning

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Collaboration: A Curate's egg?

Can collaboration be in some way detrimental to work-life balance, diversity, and focus? how much collaboration is optimal collaboration? These are pertinent questions that have been raised by managers. Like every phenomenon, collaboration could have its downsides, a few of which are examined below:

 

Less time for focus

The more workers must break out for collaborative sessions, the fewer the number of hours they have for focussed work. The most crucial aspects of work require more than just ideas, which workers gain from the collaboration, rather workers need intense focus, which they can only achieve individually.

Too many meetings, briefings, panels, and other such avenues where opinions are shared can very easily lead to a situation where work keeps going back and forth among team members which deprive workers of the required focus.

 

Uneven allocation of reward and responsibilities

When organizations embrace collaboration, each worker tends to operate based on his/her degree of individual commitment, this very easily leads to some form of lop-sidedness where some members of the organizations perpetually act as the major contributors since workers are hardly ever equally invested in the organization. Since work allocation tends to be lopsided in a collaborative environment, the highest contributors get 'penalized' by getting, even more, calls to participate.

 

Always-on Mode

Collaborative systems can demand workers to be in the on-mode always, where workers are morally obliged to work even after work hours. Similarly, the best collaborators go out of their way since the team's reputations depend on them. In time, the system buckles and works stalls. As such work can't move resume until those highly invested employees return.

 

Other Shades of Collaboration

 

Industry-level Collaboration: Gains of Strategic Alliances.

The disruptions in the supply chain of many industries occasioned by the covid-19 pandemic meant that both manufacturers and distributors were bound to have a hard time replenishing stock and procuring new types of equipment. Manufacturers have especially taken advantage of the developments to co-operate in new and different ways to bring about innovative solutions to a fearsome assortment of logistical problems namely: plummeting demand in some cases, unavailability, and rising prices of raw materials, rise in unit costs, and a drastic drop in margins.

 

In response to these, manufacturers have been seen sharing (sometimes renting out) useful assets such as equipment, warehouse capacity, and transportation to mitigate losses and generate more profit for themselves and other manufacturers. A case in point is that of Trafford Park, Manchester where excess cornflakes from Kellogg's were converted to raw ingredients by a close-by beverage company.

 

Global Collaboration: Towards A Vaccinated World

Since the outbreak of the pandemic in 2019, there has been an obvious gap between the responses and consequent realities of the different nations of the world. Countries positioned lowest in the global spectra of development have in relative terms been characterized by inadequacies in the capacities of their healthcare systems, lower revenues, minuscule volume of government intervention in terms of stimulus, and the subsequent lack of the where-with-all to provide their population with vaccination programs, indeed the narrative in different countries have differed considerably. Necessarily, calls for partnerships between and among governments have been on the rise.

 

For instance, while of the 7 billion people in the world, only about a billion have been fully vaccinated. Whereas, developed and more advanced countries stockpiled up to 2billion vaccines a development The most of those yet to receive a second jab, living in poorer countries, which raised moral questions on one hand but perhaps more importantly raised questions about intellectual property rights and the reward for invention. At any rate, following calls on developed nations to lend a helping hand to the less developed hard-hit developing economies, the United States have agreed to give out 500million vaccines to nations who are not able to produce or afford to procure the vaccines. According to an International Monetary Fund study, if the rich countries could raise $50bn, we could see up to about 40% of the world's population get immunized by the end of the year.

 

Timeline

 

Past

  • Dec 2019: Public health crisis hits in Wuhan China.
  • March 2020: Spain, Italy, United States of America record an unprecedented number of daily cases and casualties.
  • March 2020: Most economies and markets are forced into lockdowns. There is a massive transition of work from brick and mortar to virtual spaces. Health care systems in Nigeria and other developing countries come under severe pressure.
  • April 2020: China successfully contains the virus while the rest of the world contends with the contagion.
  • June 2020: Lockdowns are eased partially after the end of the first wave as the number of daily cases peaks and drops.
  • July 2020: The second wave of the infection begins.                         
  • Oct 2020: One-day record of 300,669 cases is set in the US.
  • November 2020: New vaccine technology leads to the discovery of covid-19 vaccines with 95% efficacy against the virus.
  • March 2021: India experiences a second wave, and it turns out to be the largest outbreak in the history of the virus reaching 330.000 new cases surpassing the previous one-day record of 300,669 cases in the US.
  • April 2021: Variant, 85 countries, including 22 African countries, have recorded cases of a new and more dangerous variant of the virus.

Expectation

  • As remote working becomes more prevalent, more and more small companies would come into fast-track the digital transformation thereby providing more affordable alternatives to Zoom.
  • Schools would continue to utilize the 'upside-down classrooms', schools are tweaking the traditional system where learning is usually done in the classroom while assignments are done individually and at home, now following the realization that children can and do learn well from videos, schools spend online classes to resolve areas of exceptional difficulty.
  • Big city headquarters would remain but become smaller.
  • Malls that are mostly anchored on restaurants would get fewer visits as there would be an increase in home delivery services.
  • The metropolis would generate less tax income as residency would drift from therefrom to currently more affordable and remote towns and cities when work becomes more hybrid.
  • Spending in and around rural areas increases as salaries move to satellite cities.
  • Transportation would slow down a bit.
  • International travel may require some form of a vaccine passport.

 

Hybrid Model: Being Elastic can be Fantastic

The age-long idea that managers need to concentrate every single worker in the 'mothership' to get the best out of her has been challenged and proven wrong by the COVID-19 lockdown experience. At the outset of the pandemic, there was an obvious need to limit physical contact within the workplace, organizations first experimented with safety and social distancing measures, as the contagion worsened, firms were forced to shut their offices. Brick and Mortar structures eventually had to be vacated and work resumed in virtual workspaces built on video conferencing technology.

 

Despite the partial easing of the lockdown and cautious optimism that things are returning to pre-pandemic conditions, a large proportion of the Nigerian populace have still not been vaccinated, many such workers — especially the younger employees who have gotten a hang of the technology required for the virtual workplace, prefer to work partially from home. The idea of a hybrid workforce seems to also appeal to some employers because virtual work can help organizations cut costs related to running the workplace.

 

The future of the post-pandemic workplace appears to be the hybrid model, which gives workers different work options including working from home, in such system employees who are more efficient at home opt to work from home while workspaces serve the purpose of community and collaboration centres where workers can meet when they want to. Several dynamics of the model make it attractive to employees, these include:

 

Work-life balance

In the hybrid model, flexible work options will allow workers to balance job obligations and their personal life as they would then have more time to attend to issues related to catering for their children and aged members of their families. In several countries, the child-care crisis is leading to a drop in female labor participation the hybrid model can help to stem the tide.

 

Telecommuting as against Transportation can be cost-saving

Working in a hybrid system would mean that employees would not be required to show up physically at work every day, as such avoiding traveling costs, which often multiplies at peak periods at the time workers must travel, can make substantial savings for the employee.

 

Employee Efficiency

The hybrid world of work is much more focused on the things that matter, and so performance evaluation and remuneration considerations are much less a matter of attendance, the distance of workers’ residence, or hours spent at work but more of their productivity and efficiency.


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Downloadable Versions of 2021 Report (PDF)

1.          Executive Summary: CEO Remuneration 2021 Report - From COVID to Collaboration -  August 01, 2021

2.         Full Report: CEO Remuneration 2021 Report - From COVID to Collaboration -  August 01, 2021


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Previous Years's Reports and Related Links

1.      CEO Remuneration 2020 Report - Paying the CEO in a Pandemic; The Unanswered Questions - July 30, 2020

2.     CEO Remuneration 2019 Report: Making Sense of The Numbers for Listed Companies in Nigeria - July 30, 2019

3.     CEO Remuneration 2018 - PDF Report

4.     All Quoted Companies IR Pages - Proshare MARKETS



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1.      CEO Remuneration 2021 Report: From COVID to Collaboration



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