Culture, short-term gain, HR, investment bankers, senior management, the board all get it in the neck.
In a report commissioned by Barlcays after it was fined $428m for manipulating Libor in June, Rothschild vice chairman Anthony Salz has criticized the bank for failings in its culture and urged it to improve its openness and transparency.
Here are 9 pretty damning comments from the 236-page report:
1. Barclays became complex to manage, tending to develop silos with different values and cultures. Despite some attempts to establish Group-wide values, the culture that emerged tended to favour transactions over relationships, the short term over sustainability, and financial over other business purposes.
2. We believe that the business practices for which Barclays has rightly been criticised were shaped predominantly by its cultures, which rested on uncertain foundations. There was no sense of common purpose in a group that had grown and diversified significantly in less than two decades.
3. There was an over-emphasis on short-term financial performance, reinforced by remuneration systems that tended to reward revenue generation rather than serving the interests of customers and clients.
4. The role of human resources (HR), and the design and operation of the ways in which the bank managed and developed its people, did less than we would have wished to underpin desirable behaviours. The HR function was accorded insufficient status to stand up to the business units on a variety of people issues, including pay.
5. A few investment bankers seemed to lose a sense of proportion and humility.
6. Fundamental change is also needed in Barclays’ relationships with key stakeholders. This includes moving from a confrontational approach with regulators to one that is more open and cooperative.
7. Barclays was sometimes perceived as being within the letter of the law but not within its spirit.
8. There was also in some parts of the Group a sense that senior management did not want to hear bad news and that employees should be capable of solving problems. This contributed to a reluctance to escalate issues of concern.
9. With the benefit of hindsight, we believe that the Barclays Board did not give sufficient attention to this area. We also believe the Board found it difficult at times to penetrate into what was a large, complex organisation.
Please press here for the full report