Salz Review - Wall Street Journal

103
Salz Review
An Independent Review of Barclays’ Business Practices
which different views are seen as constructive and are encouraged (even if sometimes
mistaken), where disciplined but rigorous challenge on significant issues is regarded
as acceptable. The culture and style of the board is a core continuing responsibility
of the Chairman, supported by the Senior Independent Director or the Deputy
Chairman.
9.21 Some of our interviewees told us that the challenge process was not as effective as
they would have liked. Most were complimentary that the Board remained levelheaded
during times of pressure and that people were able to raise their concerns
one way or another.
9.22 Board members at other companies mentioned the importance of reserving board
time for free-form discussion of key issues, to understand emerging or future risks
(sometimes referred to as ‘horizon scanning’) across the Group as a whole. Barclays
did have informal sessions, for example over dinner the night before their normal
scheduled Board meetings. Nevertheless, some suggested that it would help to have
time at the end of the agenda, sometimes without executives, to discuss how a
particular meeting had gone while still fresh in directors’ minds. There are practical
problems with having these discussions at the end of meetings, but if this time is not
planned into the timetable, there is a risk that such discussions will be crowded out
by what is seen as urgent.
9.23 We agree with the Walker Review in acknowledging that “while a majority of NEDs
should be expected to bring materially relevant financial experience (…), there will
still be scope and need for diversity in skillsets and different types of skillset and
experience (…). A [bank] board should not be over-specialised and should be able to
draw on a broad range of skills and experience. These generic skills should ideally
include perspective, insight and confidence in distinguishing between major issues
for the board and important but lesser issues that, if unchecked, can crowd out and
distract from board focus on the larger issues; a readiness where necessary to
challenge the executive and other NEDs in debates on major issues where a strategic
proposition from the executive or emerging conventional wisdom may require close
scrutiny; and experience relevant to assessing the performance of the CEO and
senior executive team.” 178
9.24 The chart below (see Figure 9.1) shows the extent of banking and/or financial
experience among Barclays’ non-executives at five-year intervals from 2002 to 2012.
It illustrates that Barclays has now exceeded its 50% target for non-executive
directors with banking and/or financial experience. Ideally, this group should also
reflect Barclays’ particular activities. We regard first-hand experience of senior
positions in bank risk or compliance functions or in regulation as particularly useful,
as well as experience of some of the more complex investment banking businesses.
We also believe that diversity of experience, and gender diversity, are essential to
avoid ‘groupthink’. It is disappointing that only one of five female non-executives
between 2002 and 2012 has completed two terms as a director.
178 Ibid., p. 45.