“The global review will assess the bank’s
current values, principles and standards of operation and determine to what
extent those need to change; test how well current decision-making processes
incorporate the bank’s values, standards and principles and outline any changes
required; and determine whether or not the appropriate training, development,
incentives and disciplinary processes are in place. The review’s findings and
recommendations will be published, based on evidence gathered through extensive
engagement with all of the bank’s stakeholders and a thorough review of all
pertinent documentary evidence. Any interested party is encouraged to provide
input to the review by submitting a perspective or evidence via SalzReview@barclays.com”.
Thus, the Barclays press release announced that Anthony
Salz is to conduct an independent review of Barclays culture which will
conclude by next April. This is a fairly straightforward, low risk, defensive
move by a bank which has sustained massive reputational damage in the past few
weeks since it was fined for fixing Libor
First, the CEO and chairman have to go, as a kind
of penance. Then Barclays performs a kind of corporate moving on. Hence the independent
inquiry whose (not too onerous) recommendations can be ostentatiously implemented.
The precautionary motives of Barclays now manifest
themselves in two ways, through the terms of reference of the inquiry and the
choice of the lead inquirer.
First, the inquiry’s terms of reference are
narrowly defined as “ business practices” understood as “values, principles and
standards of operation”. And that fits with an idealist and dematerialised
definition of culture as “instinctive behaviour and beliefs” The investigation
does not consider the Barclays business
model in retail and in investment banking. Salz will not ask whether expensive
branches and free current accounts means mis-selling in retail to recover costs.
Nor ask why investment banking is a joint venture which benefits bankers more
than shareholders and generates a balance sheet larger than British GDP.
Second the inquiry will be led by a silver haired corporate
lawyer who is one of their own. Salz is, a man with an “urbane manner and
establishment background” according to the BBC ‘s Robert Peston who has known
him “for donkey’s years”. Salz is well networked in investment banking via his
role as lead lawyer on twenty years of M&A deals at the law firm Freshfields
where he was senior partner until 2006. He is also one of the great and the
good, with roles including senior positions on the BBC board, alongside
Barclay’s now disgraced chairman Marcus Agius. Barclays chose this man Salz and
not, for example, an awkward churchman with a conscience like Rowan Williams.
Salz has the track record, reputation and recent
experience that fits him for this kind of independent inquiry into banking
culture. Let's recall Money Week's profile of Salz in 2006. This looked back to the takeover deal which helped
to make his name and from which Salz emerged stronger while others went to
jail:
"In 1986, he advised Guinness on its bid to
buy Distillers and “was as taken aback as everyone else by the wrongdoing that
emerged”, says The Sunday Times. Salz claimed he had repeatedly
warned directors of the illegality of their actions – a version of events that
conflicted with that of Guinness chief Ernest Saunders. It was a nail-biting
time, but Salz won the day and emerged from the episode stronger
And Money Week explained that Salz was the man to
make sure that everything was within the law:
"Corporate lawyers are two a penny. What makes
Salz so special? Clients claim it is his bold, imaginative approach that makes
him a star. “Most lawyers tell you why not to do something, but Anthony
is creative,” says David Mayhew at Cazenove. “He will show you how to do it
within the law. And he has a wicked sense of humour.”
We would add that Salz has since 2006 has added
experience of chairing inquiries. According to his profile in the Barclays
press release
(Salz) chaired the Independent Commission on
Youth Crime and Antisocial Behaviour in England and Wales, which reported in
2010. He also chaired two review groups on press self-regulation on behalf of
the Media Standards Trust (on which Board he sits), which published reports and
recommendations in 2009 and in June 2012.
The failure of press self regulation and serial misbehaviour by the tabloids of
course led to Leveson. And this independent inquiry into Barclays under Anthony Salz is a poor substitute for the
Leveson for the banks which CRESC and others have been asking for.
Dyfal Donc
