Futuresphere is currently collaborating in the Culture in Practice project, a major review of the role and impact of organisational cultures on governance, risk and performance within corporate firms. Conducted from a practical perspective, Culture in Practice will examine what legislators, regulators, advisors and firms themselves can and should do in relation to organisational culture to improve resilience and performance. The report will be prepared in collaboration with London-based risk strategy house, Paradigm Risk Consulting. The Culture in Practice project has its own website. To visit the Culture in Practice site, click here >

One of the most controversial aspects of the financial crisis was the impact of structures and incentives in remuneration of trading and other financial risk-taking in banks and other financial institutions. Reforms, especially in the EU, have been far-reaching. They have also been amateur and any benefits thereof will be dwarfed by unintended consequences; in short, they are a mess – a classic case of 'regulate in haste and repent at leisure'. Their spirit is dirigiste and punitive. Prima facie, they violate the Maastricht Treaty. Their effect will be to raise sector risks rather than to reduce them; they will simply shift risk-taking to less constrained jurisdictions without improving the alignment of risk decision-making with the interests of shareholders. We propose to develop from first principles a rational approach to remuneration in financial services – structures that will be workable and improve alignment of risk-taking and risk-holding. The project will result in a concrete proposal for reform with practical structures that regulators can approve and firms can implement. Futuresphere will collaborate with a specialist policy advisory firm based in London to develop the proposals and 'socialise' them with participating firms, sector bodies and regulators. Subject to funding, the project will commence in early 2015. To find out more about the banking remuneration project, click here >

The total value of residential real estate in the UK is estimated to be £4,400 billion and for commercial real estate, £569 billion. This represents a combined value of about 2.5 times the capitalisation of the FTSE 100 (at £1,950 billion); real estate is a massive asset class that is substantially under-represented in most managers’ portfolios. Yet, at present, this asset class is illiquid and untradable outside the primary market. Asset allocation to this asset class is heavily structurally constrained, making investment problematic and highly subject to localised price distortions. While there are conceptual and practical challenges to improving tradability of real estate, if these could be overcome, a more efficient market would reduce price distortions, reduce banks’ capital commitments to underperforming assets and democratise investment in real estate. Also, as households’ principal assets, liquid trading in housing stock has profound policy implications. What are the challenges, what are the prospects for resolving them and what would a more efficient real estate market look like? What would improved tradability do for households and investors? Subject to funding, the project will commence in early 2014. T find out more about the project, click here >