Salz Review - Wall Street Journal

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Salz Review
An Independent Review of Barclays’ Business Practices
building revenue through effective competition and in avoiding some – though not
all – of the mistakes that others made.
8.26 As we observe throughout this report, Barclays has not always been as open and
clear as it could have been. Openness is a value which goes directly to the heart of
relationships with all stakeholders, for example: providing clarity about product
suitability and pricing for customers; resisting ambiguity and applying high standards
of disclosure to shareholder communication; promoting cooperative and
straightforward discourse with regulators; and encouraging staff to raise concerns
with no need to fear the consequences.
8.27 It seemed to us that some of these cultural characteristics combined in an attitude
which came to represent Barclays in the eyes of the external audience. This attitude
may have been reinforced by the challenges of navigating the financial crisis. This
may have caused Barclays to focus internally, and somewhat defensively, rather than
listen fully to legitimate external views and respond to them.
8.28 The vast majority of Barclays’ employees want to act with integrity. They want to
exhibit behaviours consistent with the standards the public would expect of it as a
major financial institution. This was reflected in our many discussions with staff,
customers and counterparties, by the e-mails to our Review website, as well as in
Barclays' Employee Opinion Surveys and both ours and Barclays’ customer research.
Many employees told us directly about their sadness, disbelief and anger with what
has gone wrong in terms of the much publicised poor behaviours. Some spoke of
their frustration with management for not listening to their concerns about the way
culture was evolving. They also spoke of their determination to restore trust and
rebuild an organisation in which they and their customers can feel proud. This is
important, but will be achieved only if the Group, throughout all levels of leadership,
consistently strengthens its efforts to define, embed and reinforce a sustainable
culture suited to a modern, major financial institution.
8.29 We have been grateful for the willingness of many Barclays employees to help us
with the Review. At the same time, we experienced directly some signs of the
organisational reluctance to be open. For example, it was generally left to us to ask
the right questions and identify the right documents. This seemed to be
representative of an organisational defensiveness, where some more junior members
of staff had been given limited authority to apply their own judgment. We suspected
that the caution was perhaps a habit left over from ‘fighting’ to remain independent
through a long crisis with many challenges, combined perhaps with a feeling that the
bank was continually under attack: from virtually all sides on the quantum of pay and
bonuses; from regulators (in the UK especially on stress tests but also on conduct
issues); from customers claiming for alleged mis-selling; from shareholders on the
clarity of its asset valuations and its pay arrangements; from the Government for not
making sufficient credit available to small businesses; and from a media happy to
report all of this on both its business and front pages. We hope that a clearer set of
values, well discussed and understood, will help to develop a confidence in the
exercise of judgment around these values and an attitude of openness based on
this confidence.