In the News

Barclays boss faces penalty for 'conduct breach'

Penny Brooks

23rd April 2018

If you are looking at the impact of external, government regulation on businesses, the news that Barclays boss Jes Staley is facing a fine by UK regulators is a great example to use. This summary of it is drawn from two sources in particular - the BBC report and an analysis in the FT.

The Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) began their probe into Mr Staley's conduct a year ago. The complex issue dates back to June 2016, when members of the Barclays board received two anonymous letters raising concerns about a senior employee, a longtime friend and associate of Mr Staley, who had a history of personal problems and had nonetheless been hired by Barclays. The letters were being treated as whistleblows, yet Mr Staley asked Barclays' internal investigation team to attempt to identify the authors of the letters, which is a breach of the code of conduct that guarantees anonymity for whistleblowers.

Regulators engaged in a prolonged investigation, conscious of the need to take a robust stance in their first high-profile test of the new post-crisis Senior Manager Regime rules, while at the same time bearing in mind concerns about the stability of Barclays. The bank is still struggling for sustainable profitability and has seen its last two chief executives — Bob Diamond and Antony Jenkins — removed. However, on Friday, Barclays announced that the Financial Conduct Authority and Prudential Regulation Authority had concluded he was not guilty of the worst possible transgressions of the Senior Managers Regime: he is still deemed fit and proper to do his job, and he has not been judged to have acted with a lack of integrity.

Simon Jack of the BBC suggests that the City watchdog may feel some heat. Many will say that sparing a boss who tried to track down a whistleblower will discourage those whistleblowers, who can be such an important tool in policing bad financial behaviour.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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