Salz Review - Wall Street Journal

Salz Review
An Independent Review of Barclays’ Business Practices
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investment bank and Wealth and Investment Management. Community activities
were mentioned infrequently in our interviews with senior management. Barclays
could do more to develop a common appreciation of these initiatives, to help embed
its values and develop a recognition across Barclays that these community
investments are valued by Barclays leadership and considered critical to success.
8.58 Changing culture in a large, diverse organisation is a significant task. We were
cautioned repeatedly in our interviews with business leaders who have undertaken
such transformations that embedding a resilient and values-led culture in a complex
organisation takes time and is not easy. Our own survey identified high levels of
scepticism among employees. Nearly 70% of those polled said that they did not
believe that their leadership lived and breathed Barclays’ values – although 70% also
believed that their leaders were committed to change. Part of the cultural challenge to
the industry might be addressed by coordinated efforts to reinforce the professional
standards in the banking industry.
Exhibit 5. Professional Standards in Banking
One mechanism a bank could employ to promote appropriate standards or encourage
desired behaviours has been well aired: the establishment of an organisation to
encourage ethical requirements, professional qualifications and continuing
professional development among staff. Barclays itself made a similar proposal in its
August 2012 submission to the Parliamentary Commission on Banking Standards,
including the suggestion for a code of conduct for bankers. Such a code could then be
reinforced through a bank’s own HR practices.
There are, of course, several existing industry bodies offering qualifications and
training courses relevant to bank employees. For instance, the Chartered Institute for
Securities & Investments offers judgment-based training courses using role-specific
dilemmas which individuals may face at work.
We are attracted to the potential for instilling professional standards in the banking
industry to rebuild a sense of a vocation or profession among bankers, and even
collaboration in some areas, such as financial literacy. There are important questions
to resolve, such as whether to include some self-regulation and associated disciplinary
processes, how to oversee conduct, how to create a standard curriculum and whether
to administer any exams. Possibly, unlike the legal, accounting or medical professions,
a unitary banking body might struggle to create a curriculum which covers the full
scope of a universal bank’s activities. Nonetheless, a single overarching code of
conduct should be capable of applying across all activities.
We believe that any future professional body would benefit from a number of
attributes. To achieve registration, bankers should need to meet certain qualification
requirements. These should encompass both technical skills and behavioural
components in order to ensure that training addresses both content and judgment.
There would need to be an overarching, principles-based code of conduct which
applies to both individuals and member firms. The issue of disciplinary authority
against either individuals or firms who fail to adhere to the code of conduct is more
complex. Primary responsibility for conduct would rest with the member firm. Where
a regulator is involved, it will be difficult for the new body to act quickly and
independently of the firm and the regulator. Nevertheless, the new body would need
to be able to take action against members who failed to meet its standards. Continuing