Salz Review - Wall Street Journal

Salz Review
An Independent Review of Barclays’ Business Practices
76
8. Culture
8.1 Trust is a fundamental requirement for any successful organisation. Yet survey data
show a persistent and debilitating scepticism among customers, investors and other
stakeholders in the trustworthiness of the business world. 136
8.2 Banks in particular are built on trust. After all, they look after our money. Banking
requires that we have trust and confidence that our bank is not taking undue risk.
Building an organisation’s reputation for trustworthiness takes time and is founded
on a robust ethical culture supported by leaders, systems and policies designed to
foster and reinforce employee trustworthiness. In industries that are associated with
risk and risk-taking, the work that must be done to establish and sustain trust is
greater. Barclays’ work on culture and values comes at a time when trust in banking
and bankers is at an all-time low. Trust comes from an expectation that what is said
will be delivered. Trust is also strongly related to fairness. Studies show that the
experience of unfairness quickly erodes trust. 137
8.3 Data from the Edelman 2013 Global Trust Barometer shows that at 50%, trust in
banks and financial services, is lower than for all other business sectors. In the UK,
the level of trust in banks is a startling 22% in 2013. The Global Trust Barometer
measures trust through surveys of over 31,000 people in 26 countries. The survey
also asked respondents to explain the biggest causes of the recent scandals in
banking. 59% of responses linked the issues to organisational culture – i.e., conflicts
of interest, corporate corruption, and the consequences of bonuses and
compensation (see Figure 8.1). 138 Compensation is heavily weighted in public
judgment because of the perception of fair value and the challenge of justifying
compensation levels (particularly in investment banking) in terms that most people
can relate to (see Section 11).
Figure 8.1 – Perception of the Causes of Banking Scandals
“What do you think is the biggest cause of these scandals?”
(%, Question asked of respondents familiar with recent banking/financial services scandals)
100
6
13
Changes in the economy
Banks are too large
20
Lack of regulation
50
0
11
23
25
Conflicts of interest
Corporate culture driven
by compensation/bonuses
Corporate corruption
59% of causes
of scandals
are internal
and within
business
control
Note: Segments in source data do not sum up to 100% due to rounding
Source: 2013 Edelman Trust Barometer
136 Edelman, 2013 Edelman Trust Barometer, January 2013.
137 Roderick Kramer, Rethinking Trust, 2009.
138 Edelman, 2013 Edelman Trust Barometer, January 2013.