Strategic Risk and Reward:

Content

• Executive summary
  • Leadership
  • Reward strategies
  • Strategic people management
  • Politics and regulation
• Chapter 01 The business case for reform
  • The reward system in investment banking
    • Reform challenges
  • The businesss own interest
    • How to improve performance
• Chapter 02 Organisational resilience and total reward
  • Overview
  • How much do banks spend on reward?
    • Reward and the psychological contract
      • Reward theories
      • Agency theory
      • Herzbergs two-factor theory
    • Complexity of motivation and reward
  • Understanding the workforce: quantitative and qualitative analysis
    • Elements of human capital management
    • Quantitative vs qualitative analysis
  • Evidence base for organisational resilience
    • London Business School research
    • The Goldman Sachs example
    • Stanford University research
      • Controls and performance
      • Counter-cyclical hiring and employment security
      • Selective hiring
      • Self-direction and autonomy in teams
      • Comparatively high compensation contingent on organisational performance
      • Extensive training
      • Reduced status distinctions
      • Extensive sharing of financial and performance information
  • Moves away from an evidence-based approach
    • Casual benchmarking and imitation
  • Summary
• Chapter 03 IIF Report: implications for human resources strategy and reward
  • Analysis of market events: the financial stress and its key features
    • Implications for reward and human resources strategy
  • Development of best-practice recommendations: current thinking and direction of efforts
    • Implications for reward and human resources strategy
  • Risk management
    • Risk management governance
      • Implications for reward and human resources strategy
    • Risk management issues
      • Implications for reward and human resources strategy
    • Stress testing
      • Implications for reward and human resources strategy
  • Incentives
    • Implications for reward and human resources strategy
  • Specific skills deficiencies
    • Implications for reward and human resources strategy
• Chapter 04 Risk management
  • The race for market share
    • Over-emphasis on quantitative modelling
    • Statistical approaches to risk
    • Benefits of judgment
• Chapter 05 Views from the market
  • Overview
  • Bank remuneration strategy survey findings
    • Compensation and benefits
    • Executives
    • Traders
    • Conclusion
• Chapter 06 Latest ideas in reward and applicability to investment banks
  • By Peter Christie, Head of Reward, Hay Group
  • Learning from experience
  • Risk-adjusted performance measures: Accounting profit, economic profit and performance
    • Complexities of calculating economic profit
    • First mover disadvantage
    • The way forward
  • Non-monetary aspects of reward
• Chapter 07 The shareholders perspective
  • Overview
  • Governance implications of the sub-prime crisis
  • By Bimal Patel, Manager of Corporate Governance and Policy for RiskMetrics Group
    • Directors role
    • The impact of the crisis on executive pay packages
• Chapter 08 The political perspective
  • Overview
  • The political risk of an unreformed reward and human resources strategy
    • Scale of risk
  • The political viewpoint
  • By Vince Cable, Treasury Spokesman, Liberal Democratic Party, UK
    • The contribution of financial services
    • The extent and nature of the problem
    • The political response
    • Reform of the bonus system
• Chapter 09 The search consultants perpective
  • By Paul Aldrich, Partner, CTPartners
  • Overview
  • The nature of the sector from a recruitment perspective
    • The importance of people
  • Front-office stars
    • Capturing the value of new hires
      • The growing importance of teamwork
  • The search for talent
    • The recruitment market
  • Compensation expectations
    • The annual bonus
    • The pricing of talent
  • Regulating compensation
    • A need for change?
    • Considerations
      • Equity ownership
    • The next steps
    • Summary
  • Talent portfolio management
    • Leadership and management of human resources
    • Player managers
    • The talent pool as an investment portfolio
    • Future roles in human resource management
  • Conclusion
• List of figures and tables
  • Figure 5.1: Proportion of total revenue spent on compensation & benefits in the most recent fiscal year
  • Figure 5.2: Make-up of the package of senior executives, in addition to salary and pensions
  • Figure 5.3: Period over which the long-term incentive plans of executives are vested
  • Figure 5.4: Make-up of the package of traders, in addition to salary and pensions
  • Figure 5.5: Period over which the long-term incentive plans of traders are vested
  • Figure 7.1: Governance concerns as a result of the sub-prime crisis (%)
  • Table 9.1: Talent portfolio management model