Salz Review - Wall Street Journal

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197 Salz Review An Independent Review of Barclays’ Business Practices Total “New Cases” reported to the FOS, of Barclays Group and other main UK banking groups, H1 2010-H2 2012 Total complaints (thousands) 100 Barclays Group Bank A Bank B Bank C Bank D 80 60 +394% 40 20 0 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 Note: Complaints data falls into six categories (banking and credit; mortgages and home finance; general insurance (excluding PPI); PPI; investments; and life & pensions and decumulation) Source: FOS Complaints data for “New Cases” by business group H1 2010-H2 2012
Salz Review An Independent Review of Barclays’ Business Practices 198 Appendix D – Business Practices: Lessons from other Industries Culture and values are important drivers of appropriate business practices, as are governance arrangements. However, other factors also play a role. These include legal and regulatory obligations, the economic and competitive environment, and the expectations expressed by key stakeholders such as shareholders and also by the media. Appropriate business practices are always important, but disproportionately so in high-risk industries – where key business concerns transcend profitability, growth and competitive advantage. Personal safety or the prevention of catastrophic property or financial loss are paramount. Clearly, these risks differ, so care is needed in seeking to make comparisons. However, as a high-risk industry, the banking industry can draw some lessons from how other high-risk industries explicitly shape their business practices. In the chemical industry, employees’ personal safety is paramount. One company which has effectively managed this risk is DuPont. 303 DuPont has refined its own safety methodology over 200 years of experience and has advised over a thousand clients worldwide on their own safety management. 304 DuPont found that the level of leadership focus and operational discipline around safe practices are leading indicators for near misses and accidents. They set ‘zero targets’ for accidents and fostered a culture of individual responsibility and prevention rather than reaction. DuPont’s total recordable injury rate averaged 0.67 recordable cases per 100 full-time workers in the US from 2008 and 2009. The industry average for the chemical industry was 2.7 in 2008, while the average for the manufacturing industry was 5.0 in the same year. 305 The rate means that a typical DuPont employee was in 2008 working in an environment that was four times safer than the chemical industry average in the US. In the commercial aviation industry, 306 passenger safety is also paramount; there is zero tolerance for safety risk. To manage this risk, risk assessment has become an essential component of decision-making. This is helped, of course, by pilots having a personal stake in managing safety risks. To inform decision-making, the industry fosters a strong culture encouraging employees to speak up, without assigning blame, and ensures rigorous training, licensing and adherence to procedures. Risk management is improved through mechanisms for close co-operation, which allow competing airlines to share experience on technical and safety issues. 303 http://www2.dupont.com/Media_Center/en_SG/speeches/Wui_Poh_Speech.pdf; Hilde Janssens Business Development – DuPont Safety Resources deck: “Improving your business with safety management – EAGOSH – Nov 2002”; and http://www.moveeurope.it/file%20pdf/Paul%20Weber%20-%20WHP%20e%20Mental%20health.PDF. 304 http://www2.dupont.com/Sustainable_Solutions/en_US/assets/downloads/DnA_USA_ Brochure_06192012.pdf. 305 http://c.ymcdn.com/sites/www.naem.org/resource/resmgr/docs/casestudy-2011-dupont.pdf. 306 Regarding the commercial aviation, wildfire fighting and pharmaceutical industries, see: World Economic Forum paper prepared in collaboration with The Boston Consulting Group, Rethinking Risk Management in Financial Services: Practices from other Domains, April 2010: http://members.weforum.org/pdf/FinancialInstitutions/RethinkingRiskManagement.pdf; and Martin, D., Managing Risk in Extreme Environments, London: Kogan Page, 2008.
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