Salz Review - Wall Street Journal

Salz Review
An Independent Review of Barclays’ Business Practices
90
vigorously enough. Internal surveys indicate progress on these fronts, but only
slowly. For example, junior employees still do not feel empowered to create change.
Our interviews indicated that senior management recognise that this is not a
sustainable model in a rapidly growing and changing region. Rather like Spain
(described below) the African businesses are yet to develop strong cultural links to
the rest of the Group. Interviewees observed that increasing Group mobility would
help in this regard. Indeed, the same points hold true within the Africa businesses
themselves.
8.49 We also found that cultural differences between Absa’s investment bank and retail
banking operation mirrored to some extent the relationship between Barclays’
investment bank and retail bank. There is a pan-African plan in progress to change
the business culture and operating model of Barclays Africa. This will be a
considerable challenge as the management team works to integrate the separate
businesses across the continent.
Spain
8.50 The culture in the Spanish bank reflected the culture of large banks in Spain.
The decentralised business model and lack of a notable influence from the Group
meant that the Spanish bank largely retained its own culture and felt like a homemarket
competitor. Through our interviews we saw a largely hierarchical culture but
also a culture in which teamwork, consensus and avoidance of confrontation are
valued. More recently, Barclays has commenced initiatives to build an Iberian
umbrella to share good practices between Portugal and Spain.
Group Central Functions
8.51 The culture of the Group central functions was described by many from the business
units as highly expert but typically slow to respond and overly internally focused.
Our interviewees both from within Group and outside told us that sometimes the
Group functions lacked collective influence and were kept at arms-length by the
businesses, particularly by the investment bank. We concluded that this insularity was
likely caused, in part, by the decentralised structure. Our interviewees told us that
understanding the reporting lines was difficult and exacerbated these tendencies.
Some functions worked more closely with the businesses than others – for example
Credit Risk.
Board Management and Oversight of Culture
8.52 A board has an important role to play in protecting the culture of its institution
by overseeing how effectively management promotes and embeds its stated values.
So the board must consider the tone it sets; and it should dedicate sufficient board
and board committee time to discussing how values are being implemented internally
and to assessing how the culture is developing and its impact on behaviours.
8.53 Some interviewees observed, and our analysis of Barclays Board and Board
committee minutes confirms, that the Barclays Board did not spend much time