ICAP aims to conduct its business in a socially responsible manner, to contribute to the communities in which it operates and to respect the needs of its customers, employees, investors, regulators, suppliers and other stakeholders.
ICAP’s role as an interdealer broker is to facilitate trading in the wholesale financial markets, thereby helping to ensure the smooth functioning of the global financial markets. These markets are critical to the global financial system. The vast majority of financial asset classes exist only in the OTC environment and, consequently, the efficient functioning of these markets is essential for the free flow and availability of capital, the mitigation of risk and issuer and investor choice. These markets play a major role in global economic development and are the hub of developments that benefit savers, investors, businesses and governments.
We facilitate trading by using our voice brokers and electronic broking platforms to match buyers and sellers and create liquidity in the OTC markets, enabling our customers to achieve their business objectives and to hedge their risk exposures to numerous markets, including interest rates, FX and energy. We have spent many years facilitating the flow of trades to clearing houses on behalf of our customers and aim to improve the overall resilience of the financial system. In addition we offer a wide range of post trade services, which help our customers reduce the overall level of risk.
The past twelve months have seen increased focus by regulators and politicians on these markets and proposals continue to be debated by governments across the world. There is no doubt that an overhaul of some areas of the regulatory framework supporting the OTC markets is necessary and ICAP continues to consult extensively with both politicians and regulators as part of this process.
We believe that our role as a key participant in the OTC markets best positions us to contribute to society, while maximising shareholder returns over the long term.
As the Group has expanded and grown, ICAP has attracted people with a broader range of skills in both technology and in the original broking businesses. The brokers and their managers comprise the largest group of the overall staff and they are required to have very specific skills. They are highly entrepreneurial, dynamic, team-spirited individuals with extremely strong networking and interpersonal skills and the ability to excel in a pressurised environment. ICAP’s ability to attract and retain the highest quality staff and leverage their intellectual capital is one of the key factors driving the success of our business.
Management is committed to the advancement and training of talented individuals and to providing an environment that is intellectually challenging, motivating and supportive. This year there has been a greater investment in staff through training, in particular on management and supervisory skills and on providing market knowledge and product training to the business support functions. The latter is designed to enhance the ability of the business support functions to support the broking functions more effectively. The use of e-learning has been a particular feature, especially in areas of risk management and compliance policy awareness and training. This is an excellent way of monitoring effective delivery of training and employees’ acknowledgement of their awareness of relevant policies and their agreement to be bound by them.
ICAP employs approximately 4,500 people worldwide. Of this number, more than 2,500 are brokers, sales and customer support staff and over 800 are employed in IT and product development of our electronic broking platforms.
ICAP is a global business reflecting the global nature of the markets in which we operate. Geographic mobility of the workforce has always been a feature of ICAP’s business model.
In order to ensure a continuing flow of intellectual capital into our business, ICAP is committed to maintaining and developing further an active graduate recruitment programme, even in these more difficult market conditions. First launched in 2006, ICAP’s global graduate recruitment programme aims to provide a steady flow of young, developing talent into the business. Since its launch, a total of 120 graduates have joined ICAP, with 39 graduates joining in the past year. The programme has always had an internship element focused on 2nd year undergraduates, the best of whom are encouraged to apply for a graduate trainee role. This has been expanded to include a short internship element aimed at 1st year undergraduates and long placement roles lasting between six and 12 months.
The graduate recruitment programme has also expanded in terms of the business areas it recruits for and in geographic scope. Traditionally focused on voice and electronic broking graduate trainees, with a small intake of trainee accountants recruited for ICAP’s finance function, graduate trainees are also recruited for shipbroking, shipping research, risk management, operations and IT. The programme has also expanded significantly in Asia Pacific and, in addition, now operates an internship programme for Traiana in Israel.
While the recent financial market crisis has provided opportunities to recruit highly skilled individuals, ICAP continues to monitor staff efficiency and productivity closely. Broker compensation is directly linked to commission which varies from desk to desk. Profit per broker will depend on the mix of business undertaken. Commission arrangements are structured to ensure no risk remains outstanding at the time of payment. As a result, there is no requirement for deferral conditions to be attached to commission payments.
While the Group, in common with other similar organisations, is exposed to the risk of brokers moving to other companies, ICAP seeks to minimise this risk by offering competitive remuneration structures linked to both individual and desk performance. In addition, as far as possible, ICAP uses minimum term contracts which are normally staggered across a desk to avoid the risk of key staff failing to renew, non-compete clauses, gardening leave provisions and restrictions on hiring colleagues.
In many emerging markets it is not possible to restrict staff’s freedom to leave to join a competitor. In these markets ICAP provides staff with the ability to buy themselves out of their contract which forms an economic disincentive to leave or, in the worst case, financial protection while ICAP rebuilds its platform.
ICAP is committed to achieving and maintaining the highest standards in the workplace. This commitment is underpinned by policies on equal opportunities, harassment and discrimination, to which all employees are required to adhere and which are regularly monitored and enforced. The Group undertakes diversity training designed to prevent harassment and discrimination and retaliation against individuals who report problems in the Group’s workplace.
The Group recognises the importance of effective internal communication in promoting employee engagement and uses a variety of methods, including ICAP’s global intranet, to keep staff informed about developments in the business, policies and procedures and training and advancement opportunities in a timely manner.
ICAP provides a range of employee benefits to its staff. These vary by location according to local market practice but typically include benefits such as medical insurance, income protection insurance, life assurance, pension provision and access to an employee assistance programme. Incentive and share ownership schemes are also run for the benefit of employees. Further information on these schemes can be found in note 27 to the financial statements.
As well as providing medical insurance ICAP promotes a number of initiatives to support employee health and wellbeing which, in addition to encouraging more healthy lifestyles, also helps to control medical insurance costs. These initiatives include in-house health screening sessions, free or subsidised health assessments, subsidised or discounted gym memberships and sponsorship of ICAP staff sports teams
ICAP is committed to employment policies that provide and promote equal employment and advancement opportunities and to providing an environment that ensures tolerance and respect for all employees. ICAP’s policy is that no employee, contract or temporary worker will be treated less favourably, victimised or harassed on the grounds of their disability, gender, marital or civil partnership status, race, nationality, colour, ethnicity, religion or similar philosophical belief, sexual orientation, age, or any other class protected by applicable law.
In a number of locations, for example the UK and the US, there has been increasingly active promotion of diversity initiatives. These include an active Diversity Council in the US, which has arranged presentations by prominent people from minority groups, and the launch of ICAP Mutual Interest Networks which is the umbrella framework in the UK for a range of affinity networks such as Women’s ICAP Network and Family and Dependants Network. These groups also arrange presentations and information sessions on subjects of interest to the network membership with the overall aim of encouraging a more diverse and inclusive environment in ICAP.
ICAP has a health and safety policy which is approved by the board and owned by the Group Chief Operating Officer. Regional health and safety committees oversee structures for policy compliance. All managers have a responsibility for ensuring a healthy and safe working environment. The great majority of ICAP employees work in an office environment and, as such, there are no significant areas of risk to report.
Corporate philanthropy and charitable giving have always been an important part of ICAP’s corporate culture and ICAP’s annual Charity Day has played a special role in employee motivation since its inception in 1993. Charity Day is an annual event held each December when the Group donates a whole day’s revenue to a selection of charities worldwide. There is significant staff, customer and supplier involvement in Charity Day and the charities are selected by ICAP’s staff in each region in which it operates.
This revenue would otherwise contribute directly to the broker commission pool and, as such, our staff contribute directly to these worthy causes.
Over 800 charities globally have benefited from ICAP’s Charity Day. These charities cover the whole spectrum of causes including medical research, crime prevention, developing countries and children. In 2009 ICAP’s Charity Day raised $18.7 million (£11.5 million) for more than 125 charitable organisations, bringing the total sum raised since the creation of Charity Day to $119 million. This very significant sum has contributed greatly to alleviating suffering and improving the lives of thousands of people.
ICAP’s environment policy is approved by the board and owned by the Group Finance Director.
As a financial institution, the nature of ICAP’s operations means that its environmental impact is relatively low and is limited to the emission of greenhouse gases through running offices and corporate travel. ICAP seeks to reduce emissions by purchasing electricity from renewable sources where possible, minimising air travel and recycling waste. ICAP has worked with Carbon Neutral Limited, an environmental consultancy, to estimate the residual emissions of the Group in terms of carbon dioxide equivalents. Worldwide, the Group is estimated to emit the equivalent of 15.3 thousand tonnes** of carbon dioxide or 3.5 tonnes (2009 – 3.8 tonnes) per employee per annum. ICAP continues to monitor electricity output and overall emissions output. ICAP will endeavour to reduce further this footprint, although the expansion of our global office network is likely to impact our footprint in the medium term. Where it is not possible to reduce this footprint, ICAP purchases Certificates of Emission Reduction (CER) under the United Nations’ sponsored Clean Development Mechanism.
Furthermore, one of ICAP’s business divisions is involved in helping to reduce emissions output by offering broking services in emissions credits as part of the EU Emissions Trading Scheme and United Nations Certified Emission Reduction Credits. ICAP has a leading market share of OTC brokered European Union Allowances and has a prominent position in the rapidly developing carbon options market. ICAP is also active in the nascent emissions trading markets in the US.