Salz Review - Wall Street Journal

Salz Review
An Independent Review of Barclays’ Business Practices
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important to their business unit head – or even the individual leaders to whom they
reported. This apparently contributed to focusing employees on loyalty to the
business unit leaders (or their own boss) rather than to the Group.
8.22 The strongest sub-cultures were in the investment bank and Barclaycard. The
investment bank promoted a small number of shared values powerfully conveyed by
the attitudes and behaviours of its leaders and through its promotion reviews and
compensation system. Most notably, these values were centred on commercial drive
and winning. Barclaycard also built a strong identity, even to the extent of creating a
different working environment and allowing a different dress code at the Group’s
Canary Wharf headquarters.
8.23 Winning and commercial drive are not necessarily wrong as values for a commercial
organisation, especially if, as the investment bank tried to stress, they are intended to
promote teamwork. Winning also extended to a keen interest in Barclays’ position on
industry league tables. However, we found that, particularly in the investment bank
(but also in the retail bank sales force), the interpretation and implementation of
‘winning’ went beyond the simply competitive. It was sometimes underpinned by
what appeared to have been an ‘at all costs’ attitude. This was insufficiently tempered
by permission to decide that it was better sometimes to compromise and move on.
This may have led to a tendency to argue at times for the letter rather than the spirit
of the law. Winning at all costs comes at a price: collateral issues of rivalry, arrogance,
selfishness and a lack of humility and generosity. It is dangerous to over-generalise
about one culture, especially in a large global business with an overtly decentralised
model. However, the evidence of highly competitive and overtly revenue-driven
behaviours led us to question how far and how deep these behaviours had travelled.
8.24 In the investment bank, for example, we concluded that the drive to win contributed
to the pursuit of some of the SCM deals and some of the actions that impacted the
relationships with regulators. Barclays seems to have been more willing than its peers
to challenge outsiders and less willing to cede ground. The FSA has publicly made
clear that Barclays was on the aggressive end of interpretation. The consequences
were that some of the actions were not entirely grounded on foundations which most
people would consider reasonable, although it should be acknowledged that much of
this occurred in the context of Barclays struggling to survive during the financial
crisis as an independent bank. But in similar ways, not driven by the crisis, some
retail bank sellers would pursue the sale of PPI, emphasising the meeting of targets
and success rather than the satisfaction of customers.
8.25 If winning was a stated value, then ‘cleverness’ was an unstated – but equally strong –
one. They were somewhat related. Barclays undoubtedly hired clever people. For the
investment bank, this was the key to its success. Cleverness manifested itself in the
way the team clearly built a very successful business on the back of a well thoughtthrough
strategy. But the cleverness showed through in other ways described
elsewhere in this report: the tendency to take robust positions with regulators, to
determine its position by the letter rather than the spirit of the rules, and in the ‘edgy’
way it pushed its own business agenda. Winning through intellectual power and
single-mindedness was key to the investment bank’s considerable success, both in