It is very difficult to “command” ethical behaviour; you either have it or you don’t! Jes Staley, CEO at Barclays Bank, clearly does not!
It is quite a shocking development and one in which the Board of Directors of Barclays Bank led by chairman John MacFarlane seem to be willing to accept.
In the first instance, the “Whistleblowing policy” in any organisation, and especially in banks, is purportedly ring-fenced and sacrosanct. Whistleblowers are protected through policies and procedures and reporting lines to the chairs of audit committees.
For obvious reasons, the executive management are always cut out of the loop.
The fact that Staley, late last summer, tried to circumvent this process and ascertain who had written negative comments about one of his recent hires from his alma mater, JP Morgan, was bad enough.
If reports are correct, it seems that he was warned off on a governance basis, but subsequently persisted and used the head of security to go through police/FBI type channels to see if he could unearth the complainant. Absolutely shocking!
Equally dismaying has been some of the thinking expressed by institutional investors in Barclays Bank, indicating that Staley was a necessary leader for the implementation of the Barclays strategy etc.
In my opinion, in a properly governed business, Staley should have been sacked for cause and lost all his financial benefits.
Barclays employs well over 100,000 staff, who will be watching such developments closely. As things presently stand, it would appear that the bank’s ‘whistleblowing policy’ has been seriously damaged along with Board and CEO credibility, to say nothing of customers!
These situations really underscore the difficulties faced by regulators when we continue to have large financial institutions run by individuals who have little or no experience of looking after customer deposits, and all the trust that goes along with that. These individuals, in this case Messrs MacFarlane and Staley, have come from corporate finance type backgrounds and have never really had to deal with the general public at large.
The standard of ethics and behaviour in the corporate finance world is massively different from that required in traditional commercial banking.
A mistake was made following the global financial crisis when the ‘Vickers Report’ in 2011 failed to insist that the corporate finance arms of banks should be spun off and floated separately along with managements who are risk-takers and investors who are seeking that higher rate of return. Once again, we have found that the two cannot properly exist together.
* Glasgow-based John R Wright is an academic, veteran banker and a former CEO of Oman International Bank and Gulf Bank, Kuwait.
John R Wright
