Salz Review - Wall Street Journal

Salz Review
An Independent Review of Barclays’ Business Practices
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provide the answers. Organisations need to create an environment where employees
feel it is safe to resolve the frequent differences that arise. For example, on a daily
basis, retail bank staff can face the dilemma of determining which deposit product
best meets customer needs given the frequency with which interest rates and
conditions can change.
8.14 In our review we found that the Group did not define, embed and reinforce a
common set of values by which it would act. In 2005, John Varley launched the
Group’s five Guiding Principles – ‘customer focus’, ‘winning together’, ‘best people’,
‘pioneering’ and ‘trusted’ – demonstrating intent to oversee the Group through one
set of values. In 2007 they were embedded in a refreshed Group Statement on
Corporate Conduct and Ethics. However, over time, even the statement of these
principles was lost. Most companies communicate their values; what distinguishes
them is not typically the precise words but rather the way in which values become
pervasive, reinforced through formal and informal processes, and demonstrably
evident in leaders’ attitudes, behaviours and decision making.
8.15 There were separate and inconsistent attempts to promote values in separate
businesses. Seemingly, until Bob Diamond launched his ‘One Barclays’ initiative, the
Group lacked a sense of the importance and role played by values in shaping a single
organisation and its culture. They certainly did not prioritise it.
8.16 We should also note that there is a significant challenge to instilling shared values in a
universal bank like Barclays. Cultural compatibility is difficult to achieve across
businesses which may attract very different employee profiles, and where the
business model and objectives are different. It takes a great deal of finesse to
translate the same common values into credible expectations of a trading floor and
of a retail branch network. This task is made harder when, as at Barclays, rapid
growth (which propelled it from a family bank to a leading universal bank), multiple
reorganisations and extensive external hiring (particularly in the investment bank)
create a less stable cultural base.
8.17 Our interviews and survey data confirm that the entire Group Guiding Principles had
not percolated into the consciousness of the Group. Employees of all ranks were
often unaware of the Guiding Principles. If they were aware, they could cite only one
or two of them – often without much authority. They also told us that they were not
a regular feature of induction processes, were rarely discussed as part of how they
should work in practice, and were not embedded in training or performance
management processes.
8.18 Our review of the performance evaluation documentation revealed little emphasis on
culture and values. Where present, there was little evidence of how the performance
evaluation process used values effectively as a means to drive behaviour. For
example, in the investment bank, although ‘integrity’ was specified to be a key value,
the performance evaluation parameters used to determine integrity (even in relative
terms) were ill-defined. The crux to embedding values is as much about the zerotolerance
for value breaches as it is about determining what good looks like. Some of
the failures to report and escalate poor behaviours relating to the LIBOR issues
demonstrate quite how loosely certain values were applied.