Salz Review - Wall Street Journal

Salz Review
An Independent Review of Barclays’ Business Practices
88
escalate LIBOR issues within the investment bank and to the Group-level executives
outside it. It is difficult to balance encouraging initiative, creating a culture of
openness as to mistakes and enforcing a zero-tolerance approach to breaches. But
that balance is critical in an investment bank.
8.41 When revenue leads directly to pay, with insufficient consideration of other measures
of success such as safeguarding reputation or respect for others, it is an enormous
challenge to prevent a cultural drift toward a sense of entitlement. It is difficult for
employees to give up that which they have been led to expect.
8.42 The culture of Barclays Wealth up until 2006 was described as staid and in need of
rejuvenation. In turning this around, its culture developed to be more like the
investment bank than the retail bank. A Cultural Audit Report of Barclays Wealth
Americas, which subsequently attracted media attention, 155 suggested an
environment in which ambitious growth, financial incentives and revenue targets
undermined support functions and led to a culture that was hostile to Compliance.
A cultural change programme is now underway to address the issues.
Retail and Business Banking (RBB) and Barclaycard
8.43 The retail bank has a more diverse leadership history than the investment bank.
Before 2005, RBB’s culture was characterised by an emphasis on strong relationships
between bankers and customers. From around 2005, we observed that the leadership
of the retail and commercial bank felt that they were being challenged to improve
performance. In 2007, Frits Seegers was appointed to run GRCB. He drove its
international expansion, some felt with insufficient focus on risks and controls.
There was a material shift from client focus to one that valued scale and financial
performance. Employees felt unable to question the new growth targets – which
contributed to poor financial and acquisition decisions. Employees attribute this to
a ‘culture of fear’ (particularly, it seemed a fear of not achieving targets) as well as to
weak central oversight.
8.44 Thereafter, the retail bank under the leadership of Antony Jenkins sought to renew
its focus on customer relationships, with the business starting to focus on quality
(rather than quantity) of business and to learn from recent mistakes. Employees
directed us to numerous cultural initiatives in RBB, including implementation of
upward feedback for all team leaders, introduction of employee opinion surveys and
a cross-RBB customer complaints forum. Project LiMME (Lives Made Much Easier,
introduced in 2010) demonstrates this sharper focus on developing a customercentric
business. It attempted, through the eyes of employees, to identify what could
be done to deliver improvements. In March 2012, RBB’s own employee interviews
revealed a number of concerns – some more widely shared than others. A few broad
themes did emerge, which illustrate some of the challenges the Group will face as it
seeks to implement change:
― Employees believed there was little collaboration at the level of the
Group Executive Committee;
155 Daily Mail, “Exposed: The regime of fear inside Barclays – and how the boss lied and shredded the
evidence”, 20 January 2013.