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Erasmus School of Economics

ESE TODAY

ANNUAL REPORT 2010


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ESE Today


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In many respects, ESE operates quite well. Recent assessment reports show an above-average score for our Bachelor’s and Master’s degree programmes and research programmes and indicate that ESE has regional, national and international recognition. There is a sound financial basis. It is a position to be proud of, but also a position which we firmly believe can be further enhanced. This booklet gives a general survey of all the features that make up our School. We start with an organisational chart and give the facts and figures for 2010. Furthermore, we reflect on the essence of our workforce and provide information on our financial results and changes in personnel costs in 2010.

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ESE Organisation Chart

A. ESE ORGANISATIONAL CHART The organisational chart shows the structure of Erasmus School of Economics and the relationships and relative ranks of its various divisions. Erasmus School of Economics has a clear focus on economics. It is the only School in the Netherlands which explicitly educates business economics. All Faculty is involved in both research and education. This allows ESE to thrive.

The internal ESE organisation is essentially designed per scientific section, but also shows signs of a matrix organisation. The organisation of the primary processes of ESE is designed along two axes, known as the scientific axis and the educational axis. Centred within the scientific/knowledge axis are the departments; the education management can be found within the educational axis. ESE’s activities are mainly organised and directed from within its four departments as well as the educational management. ESE aims to group all its fundamental research in its two research schools (the Tinbergen Institute [TI] and the Erasmus Research Institute of Management [ERIM]), accredited by the Royal Netherlands Academy of Arts and Science (KNAW). Both research institutes are involved in implementing the Schools’ research policies. For its contract funding (education and research), ESE is supported by a group of private limited companies ("BV's") which are, in turn, part of EUR Holding.

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Administration Office ESE School Council Education

Education Management Tinbergen Institute

Examination Board Research Advisory Board

Research

Erasmus Research Institute of Management

Education Committees Departments expertise

Economics

Business Economics

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Econometrics

Applied Economics

ESE Organisation Chart

Dean


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ESE at a Glance

B. ESE AT A GLANCE This paragraph gives a condensed overview of ESE’s student population numbers, information about its staff, research programmes, affiliated institutes and financial position. Examine the statistics which are testament to the strength and stability of our School!

Students Registered students Incoming exchange students Outgoing exchange students

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 4,579 4,396 4,258 4,248 4,470 4,648 140

116

147

108

99

103

66

54

41

73

80

69

Education programmes 4 Bachelor programmes (BSc)

BSc Economics and Business Economics BSc Econometrics and Operational Research BSc Economics and Taxation BSc Economics and Informatics

5 Master initial programmes (MSc)

MSc Economics and Business MSc Econometrics and Management Science MSc Economics and Taxation MSc Economics and Informatics MSc Accounting, Auditing and Control

5 Master post initial programmes

Executive master of Finance and Control Master City Developer Management of the European Metropolitan Region MSc Maritime Economics and Logistics Master in Urban Management and Development

2 Research Masters (MSc)

MSc/MPhil in Economics MSc/MPhil in Business Research

Research programmes 6 research programmes

Finance and Accounting, and International Markets Markets, Organisations and Government Applied Economics Econometrics Marketing Management Science

Membership Research Schools (%) Fellows/members of TI and/or ERIM

2006 61

2007 63.4

2008

2009

2010

Target

61.21 71 69 80

1 The lower percentage compared to 2009 is due to the fact that newly-employed faculty of 2009 was in the process of applying for membership for TI/ERIM.

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ESE at a Glance

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Number of PhD theses Number of PhD theses

2005

2006

2007

2008

2009

2010

24 22 24 26 15 21

Finance Finance (x1000)

2005 2006 2007 2008 2009 2010

Income

24,733 23,009 24,837 27,249 29,043 32,352

Results

241 359 1,557 1,683 1,518 2,151

Personnel ESE Personnel (31/12) Number FTE

2005 2006 2007 2008 2009 2010 322 314 371 361 405 431 242.3 230.6 258.4 258.7 280 295.1

Affiliated institutes Research schools Erasmus Research Institute of Management (ERIM) Tinbergen Institute (TI)

www.erim.nl www.tinbergen.nl

Collaboration with RSM and Addesium Erasmus Centre for Strategic Philanthropy

www.ecsp.nl

Affiliated Limited Companies (BV's) Erasmus Academie ERBS EURAC FEI IHS (50%) ISAM MELEUR RHV SEOR SMO

Erasmus University Centre for Contract Research and Business Support Erasmus School of Accounting & Assurance Fiscaal Economisch Instituut Institute for Housing & Urban Development Studies Institute voor Sales en Account Management Centre for Maritime Economics and Logistics Regionale Economie, Haven- en Vervoerseconomie Sociaal-Economisch Onderzoek Rotterdam Stichting Maatschappij en Ondernemen

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Human Resources Annual Report

C. HUMAN RESOURCES ANNUAL REPORT Our people make up over 70% of our operating budget and are the single greatest investment ESE makes in any one resource. ESE aims to provide an environment that promotes respect, equality of opportunities and diversity, and encourages people to achieve their full potential. We are committed to creating a sense of belonging and a culture that values the views of students and employees. Effective leadership within the School is vital to achieve a community based on these essential and shared values.

I. Information about ESE’s workforce This section profiles some of the trends related to our staff. It contains information concerning the staff capacity (if necessary divided by job category). Data are given concerning the number of FTEs, numbers and nationalities that are employed at ESE, as well as the gender and age structure of our staff. Development of personnel 2005-2010 In spite of a very tight labour market for economists, the existing vacancies were filled for the most part in 2010. Only in the sector accounting, auditing and control there are still a substantial number of job vacancies for so called “twolegged players” (being active in education and research, holding a PhD degree). On the reference date, 31 December 2009, 405 people (280 FTEs) were appointed in ESE. On this same date in 2010, 431 people had been appointed (295 FTE). One of the goals set is to have 80 PhD students appointed in ESE at any given time. By the end of 2010, 89 PhD students had been appointed.

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Personnel development 2005 - 2010 FTE

Number

350

450 400

300

350

250

300

200

250

150

200 150

100

100

50 0

50 2005 2006 2007 2008 2009 2010

Number of ESE staff

314 322 371 361 405 431

Number of female staff FTE (total) FTE (female)

Number

0

91 92 116 113 134 137 230.6 242,4 258,4 258,7 280 295,1 63,2 65,1 72,8 78,4 88,4 94,7 Number of woman

FTE

FTE woman

Total FTE per job category 2008 - 2010 100 90 80 70 60 50 40 30 20 10 0

Professor Associate Assistant Mature PhD Student Support Professor Professor Talent Students Assistant Staff

FTE 2008

FTE 2009

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FTE 2010

Human Resources Annual Report

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ESE is becoming increasingly diverse Human Resources Annual Report

One of the focal points of ESE’s HR policy is to increase the diversity of its staff. On 31 December 2010, ESE counted 32 different nationalities among its staff. The percentage of people of non-Dutch origin was 24,3% of all ESE staff. Of the foreign nationals, 57% were EU citizens. All long-term international staff members have been offered assistance by a specialised company in making the necessary arrangements for settling in the Netherlands. To accommodate shortterm international guests, ESE has rented two apartments in Rotterdam. These have been occupied 58% of the time (2009: 45%). In 2010 the percentage of women appointed in ESE increased in the positions of Associate Professor and PhDs. This is due to several newly recruited women and also because of promotions of the women that had already been appointed at ESE.

Relative number of female staff per job category (%) 100 90 80 70 60 50 40 30 20 10 0

Professor Associate Assistant Mature PhD- Student Support Professor Professor Talent Students Assistant Staff Female

Male

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The age structure of ESE has changed, with the number of young employees gradually increasing1. As can be seen from the table showing the percentage of people per age group in that year, the percentage of people in the younger age groups has gradually increased over the past years. Although the percentage in the highest age group has also increased slightly, the average age is still gradually declining. The demographic trend of the ageing population is not reflected in our staff.

Age structure 2008-2010 90 80 70 60 50 40 30 20 10 0

< 26

FTE 2008

26 - 30 FTE 2009

31 - 40

41 - 50

51 - 60

> 61

FTE 2010

1 The student assistants are not included in the age structure numbers, since they are not part of the permanent staff and the majority are in the 18-24 age range.

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Human Resources Annual Report

ESE is getting younger every year


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Human Resources Annual Report

Distribution of personnel within the departments in number of people and in FTEs (in brackets) Department

Full Professor

Associate Professor Assistant Professor

Economics

M 11 (6.4) F

Business Economics

M F

Econometrics

M 11 (9.4) 2 (1.4) F

Applied Economics

M 9 (5.4) F

Administration Office

M F

Education Management

M F

PhD students

M F

Other Staff

M 1 (1.0) F

Total

15 (11.3) 2 (0.5)

49 (34)

4 (2.9) 1 (1.0)

9 (7.5) 4 (3.0)

22 (16.5) 7 (6.3)

18 (16.1) 4 (3.8)

4 (2.7) 1 (1.0)

12 (9)

9 (8.5) 3 (2.3)

76 (64)

Information about ESEâ&#x20AC;&#x2122;s staff: contracts and compliance with requirements Of the 295.14 FTEs that had been appointed on 31 December 2010, 63% were appointed on a temporary basis. If student assistants and PhD students are excluded2, this figure decreases to 39%. As mentioned before, ESE aims for highquality staff. One of the goals is for all academic staff to hold PhDs. In 2010 89% of all Faculty (excluding PhD students) complied with this qualification. Another goal is for all academic staff to be member of either ERIM or TI by 2013. In 2010 69% complied with this requirement.

2 Student assistants and PhD students are always appointed on temporary contracts.

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Mature Talent

PhD Student

Student Assistant

Other Staff

Total

18 (3.8) 1 (0.2) 6 (4.3)

41 (20.7) 11 (7.5)

5 (5.0) 1 (1.0)

4 (1.5) 2 (0.7) 8 (5.7)

50 (37.2) 21 (15.2)

3 (3.0)

26 (7.1) 7 (1.6) 4 (3.4)

60 (37,0) 15 (8.8)

5 (0.5)

3 (0.9) 1 (0.1) 6 (5.3)

25 (17.5) 12 (9.2)

9 (2.6) 6 (1.3)

12 (11.1) 10 (7.9)

21 (13.7) 16 (9.2)

20 (5.7) 13 (3.4)

10 (9.1) 16 (11.3)

30 (14.8) 29 (14.7)

56 (55.4) 20 (20.0)

56 (55.4) 20 (20.0)

3 (3.0)

6 (5.8) 8 (7.6)

89 (88)

9 (2.3) 2 (0.5)

1 (1.0) 5 (3.9)

11 (4.3) 13 (10.2)

121 (31.5)

78 (63)

431 (295)

II. Diversity programmes ESE continuously seeks to ensure that the composition of our staff reflects our student population and that we will build on our diversity programmes, including recruitment, promotion and reward policies. The programmes encourage diversity, the use of awareness training for our staff members and the incorporation of good practices into our processes. Research Traineeship Programme As part of the Diversity Programme of Erasmus University Rotterdam, the Ministry of Education, Culture and Science has awarded a substantial grant to ESE for its Research Traineeship Programme. The aim of this programme is to interest excellent students from different cultural backgrounds in pursuing an academic career. During an academic year, the participants in this programme will be paired with one of the Schoolâ&#x20AC;&#x2122;s top researchers. The students are offered a job as a student assistant and receive hands-on training in an inspiring research environment. Furthermore, they attend a monthly seminar series and meetings on research methods, academic career prospects and cultural aspects.

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Human Resources Annual Report

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ESE-bility Day 2010 on the topic of diversity Human Resources Annual Report

Stimulated by the success of the previous meetings, the ESE-bility Day was once again held for all ESE employees in 2010. Every year a location with a specific link to Rotterdam is chosen. After ‘Engels’ and the "Van Nelle Ontwerpfabriek", this year’s event was held on the classic steamer "De Rotterdam". The theme for this year was "Diversity as inspiration". ESE chose this theme because we find ourselves working increasingly with students and colleagues from other cultures, with different working styles and backgrounds. This mix presents challenges in terms of communication, service provision and cooperation. Diversity sometimes also presents us with difficult dilemmas, since every one of us judges and values individuals and groups, both consciously and subconsciously. In a series of interactive sessions we considered our own norms and values, giving us a better understanding of those of others. The workshops focused on the consequences of diversity for our own individual frames of reference, for the culture of the organisation, for the functioning of exclusion mechanisms, and for the dynamics of the range of identities carried by each individual. Grant for ESE’s women in tenure-track positions ESE strives to increase the number of talented women among its academic staff, and in 2007 it launched the Mature Talent Project. For this programme women are recruited who already have some working experience in business or with governmental organisations and want to acquire a PhD. The School also focuses on the recruitment of women in postdoc and tenured positions. As part of the Diversity Programme of Erasmus University Rotterdam, the Executive Board has awarded a grant of € 15,000 to the Erasmus School of Economics for women in tenure-track positions. These grants were awarded to Dr Karen Maas and Dr Adriana Gabor. The aim of this grant is to encourage Maas and Gabor in their ambition to become excellent scientists.

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III. Employee health and well-being Employee wellness is an important factor in building a committed workforce. ESE aims to invest in an inspirational, enriching and supportive working environment that encourages continuous learning and guides our employees towards excellence. We believe that it is vital to invest in the welfare of our staff. This allows them to achieve their full potential and enhances ESEâ&#x20AC;&#x2122;s position as an international centre of academic excellence. Absence rates Absence management has a high priority at ESE, and this is reflected in the figures. In 2010, the rate of absenteeism was 1.85%. This is a little bit more than the percentage compared to 2009 and is less than the rate for the entire EUR. Traditionally, absenteeism is higher amongst support staff than amongst academic staff. In 2009, the figures are nearly the same in both groups. The duration of the absence was longer than in 2009. This is attributable to the fact that a small number of people were ill for a longer period of time. Staff that is absent from work due to illness is closely supervised during the reintegration process.

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Human Resources Annual Report

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Human Resources Annual Report

Absence ESE staff due to illness 2010

Absence percentage

Duration of absence

ESE EUR

ESE EUR

Academic Staff Support Staff

1.39

1.40

18.00

13.58

0.33

0.51

81.12

72.80

2.81

3.52

9.83

9.69

0.77

1.44

83.25

62.42

Total

1.85 2.36

12.57 10.69

Reporting frequency ESE EUR

0.54 0.99

0 % absent

ESE EUR

82.42 66.90

Absence ESE staff due illness over the years 4,5 4 3,5 3 2,5 2 1,5 1 0,5 0

2006 2007 2008 2009 2010

Academic Staff

Support Staff

Total ESE Staff

Risk Assessment & Evaluation The new Working Conditions Act stipulates that every enterprise with personnel must carry out an inspection (or assign a third party to do so on its behalf) to examine whether the workplace poses any risks to its employees or whether this can affect their health in any way. In 2010, a Risk Assessment & Evaluation (commonly known as RA&E) was carried out for ESE. The RA&E, supplemented with a Plan of Action, is vital in ensuring good occupational health & safety and sickness absence policies. The plan is divided into one section that ESE itself can carry out and one section that must be implemented throughout EUR. The plan was created in consultation with the Personnel Council (PGFR), who approved the priorities set and the activities planned. The RA&E clearly shows that the number of work-related health and safety risks within the H-Building, where ESE is located, is negligible. The most prominent issues are the provision of occupational health and safety information to employees and the correct set-up of VDU workstations. The Plan of Action sets out specific measures to deal with these issues.

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The scores in the items professionalism, team work and fair play of the performance appraisals 2009 (carried out in 2010) show that overall, all three items have scored an average of 8 or more.

Scores ESE 2009 in our core values Year

Professionalism

Team work

Fair play

2008

Academic Staff Support Staff

8.1 8.7

7.9 8.6

8.2 8.7

2009

Academic Staff Support Staff

8.4 8.5

8.0 8.5

8.4 8.9

The number of low scores in the items professionalism, team work and fair play is very low. "The argumentation for those lower scores remains very diverse and no common factor can be observed," according to the Dean of ESE, Professor Philip Hans Franses. Special attention was given to the lower scores in the annual discussion of the performance appraisal reports between the heads of the departments and the Dean. Results show that this approach has worked well, because the issues revealed in 2008 did not return in the reports of 2009. Extended opening hours of the H-building during the weekends ESE regularly received requests to make the campus - or more specifically, the H-building - accessible on Saturday afternoons and on Sundays. These requests come mainly from our foreign employees. During the 2010-2011 academic year, ESE has extended its opening hours as part of a test run, in order to see whether the benefits outweigh the costs. As of 1 September 2010, the H-building is open on Saturdays and Sundays from 8.00 a.m. to 5.30 p.m. We will carry out a brief survey among our employees in order to assess whether the extended opening hours are appreciated and to what extent employees make use of them.

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Human Resources Annual Report

High scores for ESE in professionalism, team work and fair play


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Human Resources Annual Report

IV. Inaugural addresses and farewell lectures An inaugural lecture is an occasion of significance in an academic staff member’s career. Inaugural lectures provide newly appointed professors with the opportunity to inform colleagues, the campus community and the general public of their work to date, including current research and future plans. In the honour of retiring professors, ESE prefers a lecture as part of the farewell ceremony. In 2010 two inaugural ceremonies were held and one farewell lecture. Inaugural address of Dr Bauke Visser On Friday, April 23, Dr Bauke Visser (b. 1969), Endowed Professor in Economics of Decision-making Processes at ESE, held his inaugural address entitled ‘Organizational Economics’. Professor Visser is interested in how managers attempt to motivate their employees. His areas of interest also include corporate and political governance. However, the greater share of his time is devoted to decision-making processes in organisations. His work in the area of group decision-making is essential reading for doctoral students at leading universities in the USA and Europe. Inaugural address of Dr Enrico Pennings On Friday, September 17, Dr Enrico Pennings (b. 1971), Endowed Professor in Applied Industrial Economics at ESE, delivered his inaugural address entitled “Does contract complexity limit opportunities? Vertical organisation and flexibility”. The lecture focused on the impact of contractual complexity on the option value of growth opportunities. The lecture integrated an important research topic in industrial organisation and strategy (the vertical organisation of production) with recent advances in real options. The main result is the lower value of growth opportunities for firms that face difficulties with writing contracts to outsource complex inputs or vertically integrate these inputs.

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Due to his retirement on Friday November 5, a ceremony was held at ESE to say goodbye to Dr Herman van Dijk, Professor of Econometrics and Director of the Tinbergen Institute. He is a former Director of the Econometric Institute and Honorary Fellow of the Tinbergen Institute. Van Dijkâ&#x20AC;&#x2122;s research interests are in Bayesian inference using simulation techniques, time series econometrics, neural networks, and income distributions. He published more than 160 scientific papers and 5 books, with many different (international) co-authors. His work is cited around 1,700 times (according to Google Scholar, April 2010). For 6 years he has been a member of the European Standing Committee of the Econometric Society, the most prestigious society in the field of economics. Van Dijk received the Ad Fontes medal bestowed upon him by the EUR Executive Board. This prize is awarded to people who have made significant contributions to our University.

V. ESE and its surroundings ESE aims to create an energetic, inspiring and encouraging environment for our staff members where the expression of appreciation is part of our culture. Furthermore we also like to increase our involvement in the Rotterdam community. Successful appreciation lunch for supporting staff On Thursday, June 10 a number of ESE employees together with colleagues from various support services and companies enjoyed a luncheon at the Faculty Club, organised by Erasmus School of Economics. The main purpose of this "appreciation lunch" was to express the great appreciation of all ESE personnel for the day-today work of all the employees of the support services and companies. The invited guests included the employees of the Erasmus Facility Centre (EFB), the EUR post room staff, security staff, GOM cleaning firm, Avenance catering firm and the supervisors of the lecture halls. A number of ESE employees hosted the event. Dean Philip Hans Franses spoke appreciatively on behalf of ESE about the efforts and involvement of all invited guests.

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Human Resources Annual Report

Farewell lecture of Professor Herman van Dijk


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ESE volunteers for WorkMate at Childrenâ&#x20AC;&#x2122;s Book Week festivities Human Resources Annual Report

On Sunday October 10, a delegation of our School participated as volunteers during the Childrenâ&#x20AC;&#x2122;s Book Week festivities at the Rotterdam Public Library. ESE did so for WorkMate, an initiative that gives employers and their employees the opportunity to demonstrate their social commitment and civil responsibility to the City of Rotterdam. Erasmus University Rotterdam believes it is important to show this commitment and therefore offers opportunities to participate in the social activities of WorkMate. WorkMate is offered to employees of all Schools and other EUR departments. The support of our volunteers was highly appreciated.

VI. Talent management Building capacity ensures the continuous supply of talent in order to achieve current and future goals and objectives. It is important that we have effective recruitment strategies and that our performance management processes include training and development opportunities as well as career development initiatives. Consequently, interest in learning and development opportunities remains high at ESE. For instance, ESE will enable academic staff and senior management to develop leadership qualities within ESE (also in relation to succession planning strategies). Introductory meetings In October 2006, ESE began organising introductory meetings for new staff. A total of three introductory meetings were held in 2010. The programme contains an informative component, with speeches by the Dean and the Vice Dean on the history, strategy and goals of the School, some videos about specific programmes and an interactive component with a speed-dating session and a quiz. This programme is followed by a campus tour. During the tour participants receive practical information about the facilities and residents of the campus. Furthermore, the most interesting artworks at Woudestein Campus are highlighted. The programme is completed with a lunch. These introductory meetings are evaluated positively by the participants. They indicate that it is a good introduction to ESE, the campus and their colleagues.

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To prepare all staff members properly for their tasks, the Basic Qualification for Teaching and the Academic Leadership Course are part of the training programme for Academic Staff. In 2010 a total of 3 assistant professors have qualified for the Basic Teaching Qualification and 3 Faculty members were exempted from the course. A total of 6 staff members attended the Academic Leadership Course. Two academic staff members attended a Media Training course. The latter two are very highly appreciated by the participants. For the support staff a Time Management training and an English course were offered in 2010. Furthermore several members of the support staff attended a computer skills course. Pilot competency management for support staff ESE finds it essential that it meticulously investigates its current and future needs for highly qualified personnel in order to achieve a status as an elite, internationally oriented School amongst ever-increasing levels of competition. This requires new skills and places stricter demands on the competencies of the employees and the organisation. In 2010, a pilot was conducted within the Education Service Centre of ESE to investigate the implementation of competency management. The experiences gained during this pilot will be used during the further roll-out of the system within ESE. For support staff, in addition to targeted development of individuals in particular positions, competency management can provide career and mobility paths between the various organisational units within EUR. This provides employees with a clear vision of other roles available to them, that match their particular competencies.

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Human Resources Annual Report

Training programmes for ESEâ&#x20AC;&#x2122;s staff


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Financial Annual Report

D. FINANCIAL ANNUAL REPORT

I. Introduction ESE ended the calendar year 2010 with a positive financial result (k€ 2,151). Turnover growth did not lead to a proportional increase in costs, which has increased profits compared to 2009. ESE has achieved a reserve position of k€ 5,821 which is 23 % from the budget transferred (k€ 25,018). The financial situation is good and fits within the midterm planning of ESE. The development in income includes an increase in budget transferred (first flow), as well an increase in other income. The rise in first flow budget is the result of an increase of multiple parameters: • higher intake of students; • more bachelor degrees; • higher amount of PhD-premiums; and • higher score on the research review. The rise in other income is the result of: • an increase in second flow of funds of 70% (projects funded by the Netherlands Organization for Scientific Research, NWO); and • more contract funding (partnerships with third parties).

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II. Profit & Loss Statement 2010 (in euros x 1000)

2010

2009

(1) Budget transferred Education based funding Matching second flow of funds Other budget transferred

22,198 161 2,659

19,376 184 3,176

Total budget

25,018

22,736

962 1,121

895 1,181

1,264 3,987

743 3,488

(2) Other income Within the EUR Within the EUR Holding External Second flow of funds Third flow of funds Total other income

7,334

6,307

Total income

32,352

29,043

(3)

15,209 1,924 1,427 1,567 1,320

14,488 1,891 1,329 851 1,326

21,447

19,885

Personnel costs Wages and salaries Pension expenses Other staff expenses Temporary workers and claimants

Total personnel costs Depreciation Other expenses (4) Within the EUR (5) Within the EUR Holding (6) External Total other expenses Total expenses Result

121

88

2,686 1,767 4,180

2,291 1,659 3,602

8,633

7,552

30,201

27,525

2,151

1,518

III. Balance sheet as at 31 December 2010 (in euros x 1000)

Assets Fixed assets (7) Tangible fixed assets (8) Financial fixed assets

Current assets (9) Receivables, prepayments and accrued income Liquid assets Total assets Liabilities (10) (11) (12)

Equity capital Provisions Long-term debts

Current liabilities (13) Debts, accruals and deferred income Total liabilities www.ese.eur.nl/annual_report

31-12-2010

31-12-2009

116 110

138 110

3,923 7,857

1,416 6,437

12,007

8,102

5,821 0 545

3,721 162 493

5,641

3,726

12,007

8,102

Financial Annual Report

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Financial Annual Report

IV. Notes to the profit & loss statement and the balance sheet

General The profit and loss statement and the balance sheet of ESE are shown. Financial transactions with other organisational divisions of the EUR and with private limited companies affiliated with ESE, which are subsidiaries of the EUR Holding, are shown separately. The assets and liabilities are valued in accordance with the EURâ&#x20AC;&#x2122;s accounting principles3.

1. Budget transferred The budget transferred comprises the share of the government contribution from the Ministry of Education, Culture and Science (OCW) received by the EUR and allocated to Erasmus School of Economics (the first flow of funds). The model-based allocated budget consists partly of lump sum amounts for teaching and research. Another part of this model-based budget is dependent on the volume realised on certain performance parameters, such as the number of first-year students, the number of bachelor and master degrees and the number of doctorates awarded. When calculating the performance-dependent amounts, three-year averages are taken. This means that the funds allocated to Erasmus School of Economics depends on the average of the parameters over the three years prior to the financial year. Besides the model-based budget, ESE is also allocated the matching of the EUR of Veni/Vidi/Vici grants as budget (matching second flow of funds). The other budgetary allocations concern amongst other things, travel costs, non-EU tuition fees, development of minors, the so called Alpha / Gamma funds and, just as in previous years, contribution from the Executive Board to reform Erasmus School of Economics.

3 Reference is made to the annual financial report of the EUR.

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2. Other income The other income realised within the EUR and EUR Holding relates to the use of staff of Erasmus School of Economics in activities of other organisational divisions of EUR (Group). These are primarily: • Providing education for the International Business Administration of Rotterdam School of Management, Erasmus University and for Health Economics of iBMG (instituut Beleid & Management Gezondheidszorg). • Payments from the private limited companies affiliated to ESE for: o Directorships of ESE staff at affiliated private limited companies; o Use of accommodation and from delivery of other services (such as I&A) o The use of ESE staff in post-initial education and commercial research projects. o Contributions from EUR Holding for the results of supporting affiliated private limited companies. The income from the second flow of funds in 2010 comes largely from income from Veni/Vidi/Vici grants and research grants for PhD-students of NWO. ESE will continue to receive income directly from the third flow of funds. The third flow funds come from contracts with parties such as the European Union, but also from tuition fees, chair funding and secondments. Besides these forms of income, the third flow of funds comprises contributions from the Free University of Amsterdam (VU) and the University of Amsterdam (UvA) towards the funding of the Tinbergen Institute.

3. Personnel costs The increases of these costs are primarily due to a rise in hired staff (k€ 800), as well as the overall salary increase of 2010 (k€ 200), the increase of sold holidays (k€ 120), more redundancy costs of staff and provisions (k€ 240) and more donations in the redundancy fund (k€ 100).

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Financial Annual Report

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Financial Annual Report

4. Other expenses within the EUR The increase of these costs is mainly due to a higher contribution of ERIM, the hiring of staff from SSC HR&F (formerly wages costs) and a higher mandatory payment for the University Library. In 2010, 28% of these expenses comprised payments to ERIM. Accommodation expenses paid by ESE make up 9% of these expenses, the use of other central services and facilities make up 26%, the contribution to the University Library is 8% and costs from other Schools make up 29% of the other expenses within the EUR. As far as accommodation is concerned, it should be noted that ESE is housed in a building owned by the EUR. ESE only pays accommodation expenses if it uses more than the standard floor area.

5. Other expenses within the EUR Holding These are mostly the expenses of hiring staff from the affiliated private limited companies for teaching purposes at ESE.

6. Other external expenses About 40% of these expenses in 2010 were expenses of the Tinbergen Institute, i.e. teaching expenses for MPhil- and PhD-students, as well as expenses relating to (and for facilitating) research activities. In addition, 6% of the expenses were IT expenses, 4% for office equipment, 19% for business travel expenses, conference fees and representational expenses, 10% for outsourced activities such as printing and typesetting and legal advice and 21% for other office and general expenses. The increase of other external expenses is mainly the result of a rise in expenses for the Tinbergen Institute. Tangible fixed assets ESE adopts the rule that only investments in fixed assets with an acquisition price of more than kâ&#x201A;Ź 12are capitalised and written off over their economic life. The first depreciation is made in the year of purchase. The depreciation period depends on the type of equipment and varies from 3 to 25 years.

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The book value of the tangible fixed assets covers mostly equipment (in euros x 1000)

Furniture and equipment

Acquisition price 2009 Decline in value and depreciation at end 2009

936 - 798

Book value at end 2009

138

Investments 2010 Depreciation 2010

68 - 90

Book value at end 2010

116

Financial fixed assets These are solely loans to the EUR Holding to finance the equity capital of a number of private limited companies affiliated to Erasmus School of Economics4. Valuation is at nominal value. Receivables, prepayments and accrued income Receivables are valued at nominal value. A provision for bad debts is made for receivables on external parties. Included under Receivables are: (in euros x 1000)

Debtors external Debtors EUR and EUR group5 Other internal receivables EUR Other receivables external Prepayments and accrued income

Total

2009

2008

576 506 562 590 39 295 0 1 305 25 1,482

1,416

4 See booklet ESE Today for an overview of the private limited companies. 5 The debtors ranked as EUR and EUR group are receivables from other organisational divisions of the EUR and private limited companies under the EUR Holding.

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Equity capital The positive annual result of K€ 2,132 has led to a positive equity capital of K€ 5,815. (in euros x 1000)

Equity capital

Equity capital at end 2009 Result of financial year (2010) Direct capital movements6

3,721 2,151 - 51

Book value at end 2010

5,821

Provisions In 2005 a provision was made to settle existing obligations arising from the reorganisation of ESE. This was mostly the School’s share of redundancy pay costs. At the end of 2010 there is no need for a provision anymore, which has led to the release of the provision. Long-term debts These relate to the share of VU and UvA in the assets of the Tinbergen Institute. This procedure is the result of the cooperative agreement between the participating parties (EUR, VU, and UvA) which says that if the institute closes down, the remaining financial reserves and assets will be divided among the three Schools, in the proportion that had been adopted until then for payment of the fixed contributions of ESE to the institute.

Short term debts The composition of the short-term debts is as follows: (in euros x 1000)

2010

2009

Installments received in advance for work in progress

1,453

943

583

109

External creditors EUR an EUR group creditors7 Other internal debts EUR Other external debts

1,587 870 564

303

3

2

Accruals and deferred income

1,124

1,165

Total

5,314 3,392

6 The direct capital movement concerns the transfer, in accordance with university policy, of a part of the annual result of the Tinbergen Institute, for which the Erasmus School of Economics is the budget holder, to the long-term debt 7 The creditors ranked as EUR and EUR group are receivables from other organisational divisions of the EUR and operating companies under the EUR Holding

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Annual report 2010 The digital version of our annual report can be found on our website: www.ese.eur.nl/annual_report. Here you can find more information on several subjects as well as photo impressions and film clips. Additional information, photo impressions and film clips are indicated by

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