Editor’s comment: The wind of change is coming

News

01 March 2018

This week JLL responded to recent shareholder unrest over perceived over-reward and under-performance with a commitment to “revisit” executive remuneration.

“In connection with the 2017 annual meeting of the company, we received public criticism of our executive pay levels and compensation policies from one of our larger shareholders,” the firm’s annual report says. “Since we have always valued the input and feedback of our shareholders… we are in the process of revisiting our executive compensation programme.”

Presumably stronger links between performance and reward at the very top will be the upshot. But the firm warned of consequences should changes be made. “We may have difficulty retaining our executives,” it cautioned.

At Knight Frank there is a different issue: one of diversity. The problem is inescapable when you see a picture of the partnership’s refreshed commercial board, announced this week: It is made up of eight white, middle-aged men.

Stephen Clifton, who takes over as head of commercial on 1 April, recognises the problem and says tackling it is top of his agenda. For the business to attract, retain and incentivise talent and clients – who are increasingly concerned about how their business partners are dealing with the issue – it must be.

As the industry places a welcome focus on diversity, it will be in the spotlight like never before at MIPIM.

In a piece for the EG website this week, MIPIM director Filippo Rean acknowledges as much. As “attitudes towards equality, diversity and behavioural norms in the workplace come under scrutiny,” he writes, “MIPIM will provide an international platform for the debate for issues to be aired and for progress to be made in the fields of equality and diversity.”

It’s a welcome acknowledgement that a show which attracts 25,000 delegates – at least 80% of whom are likely to be male – can and should be part of the solution.

But commitment to fostering diversity must go further than attention to gender, ethnicity and sexuality. It must encompass diversity of thought too.

In a wonderfully candid session at EG’s TechTalkLive event this week, Palmer Capital chief executive Alex Price talked about hiring a chief technical officer. Acknowledging that his company and this industry spends too little time thinking about digital disruption and even about its customers was an important part of his own revolution. His solution is the firm’s new head of innovation, Darryll Colthrust, who three weeks after taking up his post joined Price on stage.

Colthrust has worked in retail, publishing and, most recently, financial services. His enthusiasm for the role was palpable – and driven by the belief that he can make a difference, and fast, in an industry that has been slower to change than others.

On all of these issues – diversity, incentivisation, fresh thinking – part of the solution may lie in a report out this week from recruitment firm Bohill Partners. “What changes things and is actually healthy,” says the recruitment firm, “is not hiring the obvious person.” Or for those already in post, not reaching for the obvious solution.

With Storm Emma and the Beast from the East rattling the UK, real estate is having to contend with disruptive weather fronts of its own. The winds of change are blowing so powerfully through the forecast is having to be rewritten. This week JLL responded to recent shareholder unrest over perceived over-reward and under-performance with a commitment to “revisit” executive remuneration. “In connection with the 2017 annual meeting of the company, we received public criticism of our executive pay levels and compensation policies from one of our larger shareholders,” the firm’s annual report says. “Since we have always valued the input and feedback of our shareholders… we are in the process of revisiting our executive compensation programme.” Presumably stronger links between performance and reward at the very top will be the upshot. But the firm warned of consequences should changes be made. “We may have difficulty retaining our executives,” it cautioned. At Knight Frank there is a different issue: one of diversity. The problem is inescapable when you see a picture of the partnership’s refreshed commercial board, announced this week: It is made up of eight white, middle-aged men. Stephen Clifton, who takes over as head of commercial on 1 April, recognises the problem and says tackling it is top of his agenda. For the business to attract, retain and incentivise talent and clients – who are increasingly concerned about how their business partners are dealing with the issue – it must be. As the industry places a welcome focus on diversity, it will be in the spotlight like never before at MIPIM. In a piece for the EG website this week, MIPIM director Filippo Rean acknowledges as much. As “attitudes towards equality, diversity and behavioural norms in the workplace come under scrutiny,” he writes, “MIPIM will provide an international platform for the debate for issues to be aired and for progress to be made in the fields of equality and diversity.” It’s a welcome acknowledgement that a show which attracts 25,000 delegates – at least 80% of whom are likely to be male – can and should be part of the solution. But commitment to fostering diversity must go further than attention to gender, ethnicity and sexuality. It must encompass diversity of thought too. In a wonderfully candid session at EG’s TechTalkLive event this week, Palmer Capital chief executive Alex Price talked about hiring a chief technical officer. Acknowledging that his company and this industry spends too little time thinking about digital disruption and even about its customers was an important part of his own revolution. His solution is the firm’s new head of innovation, Darryll Colthrust, who three weeks after taking up his post joined Price on stage. Colthrust has worked in retail, publishing and, most recently, financial services. His enthusiasm for the role was palpable – and driven by the belief that he can make a difference, and fast, in an industry that has been slower to change than others. On all of these issues – diversity, incentivisation, fresh thinking – part of the solution may lie in a report out this week from recruitment firm Bohill Partners. “What changes things and is actually healthy,” says the recruitment firm, “is not hiring the obvious person.” Or for those already in post, not reaching for the obvious solution.