Barclays PLC and Barclays Bank PLC (LON:BARC) just announced that the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have commenced investigations into:
- Jes Staley, Group Chief Executive Officer of Barclays, as to his individual conduct and senior manager responsibilities relating to Barclays whistleblowing programme and an attempt by Mr Staley in 2016 to identify the author of a letter that was treated by Barclays Bank PLC as a whistleblow; and
- Barclays Bank PLC, as to its responsibilities relating to the attempt by Mr Staley to identify the author of the letter, as well as Barclays systems and controls and culture relating to whistleblowing.
The attempt by Mr Staley to identify the author of the letter (the “matter”) first came to the attention of the Barclays Board in early 2017 as a result of a concern raised by an employee regarding amongst other matters the adequacy of Barclays whistleblowing procedures. The Board immediately instructed an external law firm, Simmons & Simmons LLP, to conduct a focussed investigation into the matter which was led by Sir Gerry Grimstone, the Deputy Chairman and Senior Independent Director, on behalf of the Board. The Board also promptly notified the FCA and PRA and other relevant authorities. The principal findings of the investigation relating to Mr Staley’s involvement in the matter are set out in the annex to this announcement.
Mr Staley has explained his actions to the Board. The investigation by Simmons & Simmons LLP found, and the Board has concluded, that Mr Staley honestly, but mistakenly, believed that it was permissible to identify the author of the letter. However, the Board has concluded that Mr Staley made an error in becoming involved with, and not applying appropriate governance around, the matter, and in taking action to attempt to identify the author of the letter. The author of the letter was not identified and no further action was taken. Mr Staley has apologised to the Board for his error.
The Board believes that its response to the matter should be proportionate to its serious nature. It will therefore be issuing a formal written reprimand to Mr Staley and has decided that a very significant compensation adjustment will be made to Mr Staley’s variable compensation award. The Board will give consideration to the findings of the FCA and PRA investigations and the precise amount of the compensation adjustment will be determined by the Board once those investigations have concluded.
Barclays and Mr Staley will cooperate fully with the FCA and PRA investigations. The Board is also commissioning independent reviews of Barclays relevant processes and controls, including its whistleblowing programme. The Board continues to review the position of other employees involved in this matter.
John McFarlane, Chairman, said:
I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards. The Board takes Barclays culture and the integrity of its controls extremely seriously. We have investigated this matter fully using an external law firm and we will be commissioning an independent review of Barclays processes and controls to determine what improvements may be required.
The Board has concluded that Jes Staley, Group Chief Executive Officer, honestly, but mistakenly, believed that it was permissible to identify the author of the letter and has accepted his explanation that he was trying to protect a colleague who had experienced personal difficulties in the past from what he believed to be an unfair attack, and has accepted his apology. Taking into account both the circumstances of this matter and his otherwise exemplary record since joining Barclays, including contributing significantly to improvements in Barclays culture and controls, Jes continues to have the Board’s unanimous confidence and it will support his re-appointment at Barclays Annual General Meeting on 10 May 2017.
Jes Staley, Group Chief Executive Officer added:
I have apologised to the Barclays Board, and accepted its conclusion that my personal actions in this matter were errors on my part. I will also accept whatever sanction it deems appropriate. I will cooperate fully with the Financial Conduct Authority and the Prudential Regulatory Authority, which are now both examining this matter. Our whistleblowing process is one of the most important means by which we protect our culture and values at Barclays and I certainly want to ensure that all colleagues, and others who may utilise it, understand the criticality which I attach to it.
Whilst Barclays does not intend to make any further comment at this time given the ongoing regulatory investigations, as and when appropriate, Barclays will provide an update.