Salz Review - Wall Street Journal

109
Salz Review
An Independent Review of Barclays’ Business Practices
9.45 In our view, for much of the period under review, the Barclays executive team
included strong leaders but was not cohesive as a whole, relying heavily on individual
accountability for ‘cluster’ or business unit performance and not enough on
collective responsibility for the success of the Group as a whole.
9.46 The Barclays Group Chief Executive chairs the Group ExCo, which has a wideranging
remit to “assist the Barclays Chief Executive in carrying out his duties, and
act on issues of Barclays wide concern”. 183 The decision-making power vests in the
Chief Executive, not in the ExCo. We consider that, however it is constituted, its role
for the success of the Group as a whole should be made clear. The executive team
should challenge and debate Group issues. Similar considerations apply to the ExCos
at business unit level in the Group.
9.47 As at 31 December 2003, the Group ExCo comprised 11 people including the Chief
Risk Officer (CRO), Chief Operating Officer (COO) and Chief Administrative
Officer (CAO), together with business unit leaders. A year later this had reduced to
seven, with the departure from the committee of the CRO and CAO and two
business unit leaders.
9.48 For a key period in the run-up to and during the financial crisis (2006 to 2009), the
membership of ExCo was kept relatively small (four to six people), at times including
only John Varley as the Group Chief Executive, the Chief Finance Officer and the
two ‘cluster’ Chief Executives. At that time, ExCo had no direct representation from
smaller business units, or from functions such as Group Risk, Compliance, Legal or
HR. The cluster arrangement was based on a decentralised system of accountability
with a powerful leader for each of the ‘clusters’. While intended by John Varley to
avoid silos, it did not develop a cohesive team at the top of the organisation or lead
to the right kind of debate and challenge – members had little incentive to challenge
each other. Leaders of particular business units may be reluctant to challenge and
debate the plans of other business units, to avoid provoking such challenge and
debate in relation to their own. We would suggest that a bigger ExCo, led on a
cohesive basis with sufficient debate and challenge across the businesses, would have
led in this period to a materially better sense of teamwork across the Group, better
integration of the Group Centre with the business units, and stronger engagement of
the control functions. If so, this might well have improved decision making.
9.49 When Frits Seegers left Barclays in November 2009, John Varley broadened ExCo’s
membership to add five leaders of businesses: Antony Jenkins running Global Retail
Banking; Jerry del Missier and Rich Ricci as Co-Chief Executives of Corporate and
Investment Banking; Tom Kalaris, Chief Executive of Barclays Wealth; and Absa
Chief Executive Maria Ramos. From the control functions, he added Mark Harding
as Group General Counsel (also responsible for Compliance), Robert Le Blanc as
Group CRO and Cathy Turner as Group HR Director. Interviewees have remarked
that the wider membership of 11 people from November 2009 was more effective.
Antony Jenkins has since gone further in adding to ExCo Ashok Vaswani as Chief
Executive of UK Retail & Business Banking, and Valerie Soranno-Keating as CEO
183 Group Executive Committee Terms of Reference.