Salz Review - Wall Street Journal

79
Salz Review
An Independent Review of Barclays’ Business Practices
is right and wrong. Business practices are shaped by values. Appendix B provides a
more general discussion of what culture is, why it matters and how it can go wrong.
8.11 Appendix B also discusses some of the research pointing to the importance of an
organisation having a clear sense of purpose. Groups of people require (in a sociopsychological
sense) that sense of purpose (what they are there to do). In this way,
purpose is a foundation of culture. Culture then gets determined by the way the
group shares and acts upon its collective sense of purpose. The research also shows
that cultures defined by overly commercial and competitive features, with little regard
for other elements, lead to poor outcomes. It is inherent in most people to seek
purpose beyond the purely commercial. In many successful organisations, this
purpose is expressed around their promise to customers and their role in society at
large. In our view, Barclays did not, until recently, have a clear statement of a
common purpose across its businesses. It rather emphasised growth and financial
success. The closest the Group came to having a single vision was the strategy
adopted by Group Chief Executive, John Varley, where he articulated the bank’s goal
to become a ‘Top 5’ bank – not necessarily in overall size, but in terms of the
capability and global competitive position of each of the businesses in which Barclays
competed. While this was a galvanising force, the stated aim was growth and
improvement of competitive position.
Recommendation 2: Setting high standards
The Board and senior leadership, as custodians of Barclays’ reputation, should
promote and safeguard the trust in which it is held. They should state clearly
Barclays’ purpose and report regularly on how it is fulfilling that purpose. They
should promote standards that support Barclays’ ambition to be seen as a leader
in business practices among its peer institutions and multi-national corporates
generally. The senior leadership team should be responsible for demonstrating
and promoting these high standards. This should be reflected in their annual
evaluations and variable compensation.
In communicating internally and externally, Barclays should be as open and
transparent as possible, aspiring to provide relevant, clear and meaningful
information.
8.12 Over the period studied by the Review, the push for growth in the investment bank
and Wealth, coupled with the need to increase returns in Retail, seems to have
replaced the Group’s sense of purpose and its customer focus. Perhaps
unsurprisingly, this appears to have intensified as the Group fought to maintain its
independence in the aftermath of the financial crisis.
Culture and Values at Barclays
8.13 Values drive everyday behaviour, helping to define what is normal and acceptable,
explaining how things ought to be (for example, staff ought to put customers first).
Values provide a framework through which the natural and often difficult conflicts
that arise in people’s day-to-day work can be resolved. But they will not always