Ronn Torossian, CEO, 5WPR
In 2016, members of the board at Barclays investments received an anonymous letter suggesting “concerns” about the personal conduct of recently hired “senior employees.” The letter went on to suggest inappropriate actions were taken during the recruitment process of these individuals.
The letter did not specifically name Barclays chief executive, Jes Staley, but they did suggest Mr. Staley may have had some role in the situation, or at least may have known about the issues. At the time, given that the letter was anonymous, and the allegations were simply that, unproven allegations, the issue faded from the public eye. Well, it’s back, thanks to a massive $871,000 fine dropped on Staley by industry regulators, related to a charge of “trying to identify a whistleblower,” which is a violation of banking regulations.
According to a report from the Financial Conduct Authority, in conjunction with the Prudential Regulation Authority, Staley “failed to act with due skill, care, and diligence” when responding to the letter. The implication is that, instead of investigating the issues raised, Staley tried to find the person making the allegations. That action created a long regulatory investigation, as well as other penalties. In addition to the fine leveled by regulators, Barclays says it will slice Staley’s bonus by $678,000.
Staley, for his part, chose to acknowledge some wrongdoing, calling it a “mistake” and promising to do better. “I have consistently acknowledged that my personal involvement in this matter was inappropriate, and I have apologized for mistakes which I made… I accept the conclusions of the board, the FCA, and the PRA, following their respective investigations, and the sanctions which they have each applied.”
Taken together, the fines total about 20 percent of Staley’s overall compensation. That has some people saying, and saying it loudly, that Staley “got off easy.” They believe his actions merited more of a penalty. In fact, there was a higher monetary penalty on the table, but Staley avoided this by settling quickly. But, for some, the money is not the issue. They believe regulators should have declared Staley “unfit for his post,” an assessment that would have put him out of a job – possibly any job – in the financial sector.
That judgment has not been made, and, at least at this point, probably will not be. But that won’t stop people from wondering, and the “apology” for “mistakes” is not going to stop those people from wondering any more than it will be enough to repair Staley’s reputation. In some circles, he’s being lampooned and derided as an “untouchable” corporate head who believes the rules don’t apply to him. That may well be a harsh judgement call, especially given the limited amount of information… but the perspective is out there… and it’s something Staley will have to address more effectively as this story continues to unfold. There’s no doubt an apology is a good start… but, sometimes, it’s just not enough.