Barclays boss admits errors over whistleblower and says 'I got too personally involved' - as it happened

Reuters Breaking Views columnist Dominic Elliott says Jes Staley’s actions may seem morally defensible since he wanted to defend a colleague from what he saw as unfounded smears, but the situation calls Barclays’ internal procedures into question. Elliott concludes:

Given Staley should have known the rules, it reflects badly on him. It also looks bad for Barclays: the incident only came to light as a result of a separate complaint about the bank’s whistleblowing regime this year. That suggests more profound failings. A board-instigated review of the related procedures feels like too little, too late.

More reaction to the Barclays whistleblowing:

Cathy James, chief executive of whistleblowing charity Public Concern at Work:

In a bizarre way this is whistleblowing working. The board has become aware of inappropriate conduct at the highest level and has taken action - they have then made a public statement - this is a bold move but it also shows that they want to mitigate against the damage done by the CEO’s actions. This is to be seen in the context of regulators in the sector pushing the agenda and an ongoing investigation. It’s these sort of cases, where senior executives are involved, that show how important it is... It’s too early to say whether there is going to be marked change though.

Employment lawyer Anna Birtwistle from CM Murray:

While cutting Mr Staley’s pay may outwardly appear to represent a strong response from Barclays, it is difficult to reconcile the Board’s continued confidence in Mr Staley with its stated commitment to whistleblowing. Fostering an open culture of disclosing wrongdoing in the workplace requires top down stewardship and while it may be understandable that Barclays has backed Mr Staley given his successes in post, the bank’s response to Mr Staley’s actions may give mixed messages to its employees and the wider financial services industry about the steadfastness of its commitment to whistleblowing.

More reaction to the whistleblowing news. Laith Khalaf, senior analyst at Hargreaves Lansdown, said:

Incidents like this do nothing to convince the public that banking misdemeanours are in the rear-view mirror, and this is undoubtedly an embarrassment, not to mention a distraction, for Barclays and its CEO.

Barclays has actually been doing quite well under Jes Staley’s leadership, so this error is a blemish in what was starting to look like a promising tenure. Shareholders will be doubly disappointed that the bank is once again in trouble with regulators, and that the man at the top of the organisation is responsible for it.

The Barclays share price hasn’t reacted much to news of this investigation, which is probably a sad reflection that the market thinks the potential costs of this infringement are small beer in the context of the litigation and conduct costs racked up by the bank in recent years.

Here’s a quote in an internal memo to Barclays staff from Jes Staley when he was named as the new chief executive in 2015:

There can be no retreat from becoming a values-driven organisation which conducts itself with integrity at all times.

And here’s a comment from JP Morgan boss Jamie Dimon about Staley in a Fortune report from 2010 (H/T Thomas Candela):

Jes has impeccable character and integrity.

Jes Staley’s attempts to track down a whistleblower are “clearly disappointing” and the action from regulators should be a wake-up call to company boards. Oliver Parry, the IoD’s head of corporate governance tells my colleague Julia Kollewe:

Protection for whistle-blowers is vital if employees are to feel confident in reporting problems, so it is clearly disappointing that Barclays has conceded its CEO breached the rules. The bank has admitted its error, and it is right that the CEO has had his pay cut to show the seriousness of the issue.

Barclays is absolutely correct to review its processes to make sure this doesn’t happen again, and shareholders will want further clarity at the upcoming annual meeting. The UK has a reputation for high standards of corporate governance, but boards only work when all directors are aware of their roles and responsibilities.

Today’s action from the regulator should be a wake-up call to executives to make sure they constantly refresh their knowledge of the rules.

Here’s some reaction to the Barclays situation. Economist Shaun Richards writes:

I would imagine that pretty much everyone reading this is aware of modern whistleblowing procedures so it seems strange that the CEO of Barclays was not. Actually even when he was told he had another go a month later.

There is a clear example of “back to the future” when we note that rather than being sacked we move into Yes Prime Minister land as he will receive one of the “strongly worded letters” so beloved of the apochryphal civil servant Sir Humphrey Appleby! We are told there will be this too “a very significant compensation adjustment will be made to Mr Staley’s variable compensation award.” But as it is “variable” how will we know?

And a former Tory local councillor says:

Richard’s “month later” comment refers to this section of the Barclays statement:

· Having been given a copy of the first letter [received in June 2016] and made aware of the second, Mr Staley initially requested that the Group Information Security (GIS) team attempt to identify the authors of the letters. Mr Staley considered that the letters were an unfair personal attack on the senior employee.

· Mr Staley was subsequently informed that it was not appropriate to take steps to identify the authors. Following this, neither Mr Staley nor the GIS team took any such further action.

· In July 2016, Mr Staley enquired whether the whistleblowing issue with the letters had been cleared. Following this, Mr Staley’s honestly held, but mistaken, belief was that he had clearance to identify the author of one of the letters.

Back with the latest Libor reports and the Bank of England has issued the response it made to the BBC’s Panorama programme:

Libor and other global benchmarks were not regulated in the UK or elsewhere during the period in question. Nonetheless, the Bank of England has been assisting the SFO’s criminal investigations into Libor manipulation by employees at commercial banks and brokers by providing, on a voluntary basis, documents and records requested by the SFO.

The Bank is committed to publishing materials relating to the SFO’s investigations into benchmark manipulation when it is appropriate to do so.

Until the SFO’s ongoing prosecutorial activity relating to Libor and other benchmarks has concluded, the Bank is not in a position to publish these materials.

Here’s our report on the attempt by Barclays boss Jes Staley to track down a whistleblower:

Barclays has refused to comment on whether the US Department of Financial Services is also investigating.