One of the things I had to miss at MIPIM, due to my need to court some filthy wonga (and that really says it all, I am afraid) was the Real Service and British Property Federation lunch entitled “The real estate industry – can we be trusted to act responsibly”.
The sainted Liz Peace of the BPF and Howard Morgan of Real Service (and what a top bloke he is!) really are to be congratulated on having the most cutting-edge debates at MIPIM; in a sea of self-satisfied self-interested mutual back-slapping, year on year the dynamic duo ask the tough questions in a restaurant in Cannes old town (accompanied by the usual bonkers service and funny moments).
Last year’s lunch (which I did manage to attend) was a milestone event on corporate social responsibility in the property industry (I wrote about it here). It made a number of serious inroads into that issue, was picked up by EG the weekend after, and spawned a number of projects as a result. And a difficult issue (for this industry at least) was addressed full-on.
I was so mortified at having to miss this year’s lunch (a long-standing engagement with my senior funder seriously got in the way), that I had offered to write a paper, send my avatar, a webcam, anything – anything at all – in order to be involved in the vital debate on what I see as the crux of the problem facing our industry. But (and this has resulted in a complete collapse of Sadek hubris) they seem to have managed perfectly well without me.
You may have seen the admirable column by Jack Sidders in last Saturday’s Estates Gazette: it would seem that our industry leaders are facing the challenge. This is a debate facing a number of industries of course (don’t mention Jimmy Saville, Libor, Mid Staffs Hospital, MPs expenses or horsemeat please, or we’ll all start crying). And it is seriously long overdue in ours.
Shroders’ head of property, William Hil, wrote a piece on this subject last year, which framed the debate: “Trust seems to be breaking down everywhere. We have lost trust in our politicians, our banks, and now the BBC. Within commercial property markets, it is probably little better. A loss of trust is a hugely corrosive process that is leading us to ever-increasing amounts of regulation and cost.”
And in response to this, Howard Morgan, with Liz’s support, brought together a “boardroom-level group” of leading property investors, owners and fund managers at MIPIM, to discuss five measures of responsible behaviour. These were:
Transparency – are we providing the right level of information to enable investors, occupiers and other stakeholders to measure our performance?;
Impact – can we do more to explain the positive impact of our industry on the economy, society and the environment?;
Trust – what more can we do to earn the trust of our stakeholders?;
Regulation – does our industry need more or less regulation?; and
Taxation – can we learn anything from the recent PR problems of Google, Amazon and Starbucks?
Blimey, I do wish I’d been there. Followers of this blog and of UKR will appreciate how dear all this is to our heart, how central to the UKR business model.
So… much to pick up from this debate… but let’s start with trust. The breakdown of trust affects the fundamental ability to do business.
You know, and forgive this slightly facile observation, there is a very good reason that ordinary people do not trust developers. Or agents.
We need to wake up to the fact that imbuing trust, starting with your local authority and your local community, in the places where you seek to develop, is about a lot more than PR. Sure, the message matters, but only if it is authentic.
If folk in the property industry believe they can improve their reputation, and their level of trustworthiness, without imposing higher values of behaviour within their corporate culture, then they are seriously deluding themselves.
And we need to learn from other industries, particularly those associated with our own: it was Steve Marshall, CEO of Railtrack who said (in the context of the Hatfield rail disaster) “the fundamental truth….is that your reputation will always mirror the absolute reality of what you are”.
And Rich Ricci (I know this is not an original thought: but what a truly extraordinary name for a banker!) of Barclays, is on record as saying “we’ve always scrutinised our businesses based on their ability to generate returns. Now, however, I feel it is appropriate to modify that assessment by explicitly looking at reputational risk”.
As Jack Sidders says in the opening of his splendid article “Trust. It is the most important element in business. Without it, can you really be sure that the deal you are doing is the right one?”. Guys, never mind the rights and wrongs of the issue, it is seriously in our interests to change. And change quickly.