Tomorrow’s Capital Markets
Investing in what we value – not risking our future
Patricia Cleverly
Director of Research, Strategy and Policy, Tomorrow's Company
Governance and stewardship go hand in hand
 Tomorrow's Company defines governance as “the procedures
and practice associated with decision-making, performance and
control, which provide structures for and satisfy expectations
of accountability.”
 We define stewardship as "the active and responsible
management of entrusted resources now and in the longer
term, so as to hand them on in better condition."
 Stewardship is therefore a joint responsibility
between boards and owners
The ‘triple context’
Tomorrow’s Capital Markets
Capital markets for a sustainable,
prosperous & equitable world.
“Ensuring that we are not investing our
money only to end up in a miserable
world and investing in what we value to
secure the well-being of us all.”
Tomorrow’s Capital Markets
 There is a growing momentum for change
 Change needs to be created and owned by those in
the system and those who are responsible for the
system
 Interventions need to be carefully judged, and
require both a systemic and collaborative approach
Our vision for tomorrow’s capital markets
 A wider view of value
 Savings are channelled into investments which create wealth and
secure well-being
 Focus on stewardship
 Aligning skills and linking targets and incentives to the needs of
clients and beneficiaries
 Balance between long-term investments and need for liquidity
 Ensuring the ‘casino’ economy does not threaten the ‘real’
economy
The changing risk landscape...
“The
defining characteristic of our age is increasing connectivity…
Increasing connectivity means growing complexity…
This complexity is leading to increasing systemic risk…
Latent systemic risks are prevalent in many domains...
Systemic risk is not simply financial, environmental, or biological.
Nor can it be confined to infrastructure or social risks. It extends
across all these domains and must be dealt with in an integrative
manner.”
The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do about It by Ian Goldin and Mike Mariathasan
The changing risk agenda for organisations...
Causes that make companies
especially prone both to crises and
the escalation of a crisis into a
disaster…
ERM strong at managing financial
and operational risk…
…but now needs to be supplemented
by deep consideration of other
underlying behavioural and
organisational risks.
‘Roads to Ruin’, Cass Business School on behalf of Airmic
Tomorrow’s risk leadership...
…is about delivering
risk resilience and business
performance
 integrated approach to risk
 defining the appropriate risk appetite
for the organisation and ‘risk culture’
 an executive voice of risk
Tomorrow's Corporate Governance: Tomorrow’s Risk Leadership
Tomorrow’s risk leadership...
 Strategic partnership
 Executive leadership
 Culture
 Organisational capability
Experience and qualities required to fulfil these requirements
Tomorrow’s risk leadership...
 Courage
 Communication
 Integrity, ethics & values
 Credibility
 Organisational and
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