As part of our sister organization`s goal to develop people with entirely new perspectives and its plan to identify future employees for the organization, SONEAN has created the Social Network Analysis Lab (SNA Lab) which Selma Peters, Erik Strauch and Lukas Macner have embarked on from July-August 2013. Lukas and Eric e.g. are students of the Frankfurt International School (FIS, see also in Oberursel which has proven ideal for both Funds@Work`s and SONEAN`s recruitement based on the exceptional quality of students which have joined us from FIS in the last three years. There is a clear commitment to enhance this cooperation with the FIS based on the very positive experience. The SNA Lab complements SONEAN`s academic research dedicated to the application of social network analysis and its team of 9 well known professors globally (SNA at Work) who get together regularly in different parts of the world (soon in Qatar-Doha after the latest meetings in the UAE-Dubai) to make social network analysis more relevant for organizations.

Selma, Erik and Lukas were fully integrated into the latest corporate ecosystem database project for SONEAN and learned to see the world from an entirely new perspective, going beyond financial and non-financial (ESG) data in their analyses. During their daily work and feedback discussions with the team at SONEAN they not only gained insights into the 12 year work and track record of Funds@Work AG and the new entity SONEAN but also worked actively on latest projects. An important part of the SNA Lab was also to introduce our young colleagues to social network theory, the most common measures as well as software and network related findings but above all its application to real life phenomena connecting theory to practice.

SONEAN`s aim is to help in revolutionizing (investment) decision making by going beyond financial and non-financial such as ESG data and provide crucial insights into the social connections among market participants such as corporate executives and non-executive directors in boards of major companies. Thus our Interns have learned not to look at companies in isolation but analyze and visualize the social networks in which corporate decision makers are embedded and how it affects their decisions. The aim of the SNA Lab is to train “highly selected” people and ensure that social network analysis soon becomes the third and crucial complementary pillar in decision making, allowing market participants to go beyond their existing data to include social network related insights and thus increase the predictive power of their analyses. By making social networks among corporate executive tangible and providing unique social network measures for decision makers we will allow them to manage risks more properly and identify new alpha sources.

The SNA Lab team
From left to right: Cem Kaya, Lukas Macner, Dr. Murat Ünal, Mahmoud Bekri, Selma Meryem Peters, and Erik Strauch

Selma Meryem Peters

Selma Meryem Peters:
Social Network Analysis (SNA) in the SONEAN project has given me a new understanding of seeing the world’s complexity in a much larger context. It is fascinating that such a complementary idea going beyond financial and non-financial (ESG) data can explain a majority of outcomes and decisions which occur in our external environment and everyday life.  Researching the necessary data of the companies to analyze relationships and identify links resembles a giant jigsaw: it requires and taught me to be patient, determined and to fit together the connected pieces to create an exciting overall picture. Astonishingly, members of the supervisory and management board of certain companies are linked through prior institutions, organizations and events impacting their decisions and thus stakeholders and shareholders too. There is a clear indication for the subjective and preferential composition of the companies’ boards and thus the influence on corporate governance. How to address this issue? By creating awareness with SNA and making social networks tangible, allowing decision makers such as asset managers and owners alike to see how organizations are embedded in social networks and should not be looked at in isolation!

Erik Strauch

Erik Strauch:
This is my second year working at Funds@Work AG, and the experience has yet again been eye-opening, I cannot imagine working in a future business environment without using the valuable tool set of social network analysis (SNA) that Funds@Work AG and my most recent involvement in its SONEAN project have provided me with.

My latest participation in SONEAN’s SNA Lab allowed me to see and interact with the world in a much more interconnected way and go beyond financial and non-financial (such as ESG) data as typically done by decision makers. One of things that stood out most to me was a particular company that I researched as part of our ecosystem database development. The organization has had a long term interest in purchasing a rival company. By using social network analysis I was able to see that the interested company had been appointing prominent employees of the rival entity to key board positions, a strategic move that could help the company’s objective of finally acquiring and merging with the rival organization as most M&A activities, based on empirical evidence, take place among connected organizations. By tracking the board`s executive and non-executive members’ historic professional and educational ties among others and linking the data to recent developments and dynamic data sources, I was able to discern this strategic move which might in the coming months lead to the finally desired outcome. For investors however it will be important to know how this connectedness can impact valuation of the company.

Lukas Macner

My exposure to social network analysis (SNA) as part of SONEAN`s SNA Lab has caused me to perceive the world from a completely new perspective. Now that I have 4D Vision, I can apply this perspective to any phenomenon in the world. From marketing to other functions within the organization, to the financial industry and beyond, SNA as being applied by SONEAN works everywhere. The most intriguing project that I have worked on was the corporate ecosystem data base where I screened hundreds of executive and non-executive board members with thousands of social ties in Europe and beyond. During the research I found out how socially connected public companies are and how social networks impact the decisions of executives. Moreover I learned that transparency is crucial in corporate governance because without transparency investors cannot make fully informed decisions about the companies they want to invest in. Social network analysis allows us to see corporate governance e.g. from an entirely different view and shows us how the seeming independence of non-executive board members becomes virtually obsolete when including social dependence parameters. I also learned that lifelong learning, one of the mottos of Funds@Work AG and SONEAN can lead to great success in one's career and enormous happiness.

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