Compare and Contrast
April 20 2018
Today’s announcement by the FCA and PRA about the draft warning notice to Barclays boss, Jess Staley, seems to bring to an end (assuming the level of the fine is not contested, not necessarily a given) the lengthy investigation into his conduct when he twice sought to uncover the identity of an anonymous whistleblower, contrary to the rules, good practice and, one hopes, Barclays’ own internal procedures.
It’s noteworthy that the FCA and PRA are saying that Mr Staley had not acted with sufficient care when he set out to uncover the identity of the whistleblower. Unfortunate wording since it implies that it was his ineptness in doing so that they are criticising rather than the fact that he did not realise that it was quite improper for him to try at all, let alone twice. But the regulators have shied away from any suggestion of impropriety since calling into question Mr Staley’s fitness and propriety would have called into question whether he should or could continue in his role at all.
Always tricky to get the tone right when criticising those at the top. So we must wait for the final public notice to see the basis on which the regulators have come to their decision.
Elsewhere Sir Alan Parker has resigned his position at Save The Children two weeks after the Charity Commission announced an inquiry into how the charity had handled sexual harassment claims dating back to 2012 and involving senior executives, including the former CEO and policy director. As with other similar claims, it is not so much the initial allegations themselves (bad as they may be) which have led to grief but the way they were initially investigated and how those raising concerns were treated. Better procedures and more training will undoubtedly be required but, even more importantly, what is really needed is an understanding that ignoring the messenger is always the wrong thing to do (no matter how mixed their motivation may be), a lesson others in public life might also usefully learn. As is hoping that the problems will go away if ignored. They won’t.
Still, if banking has not yet got it right, it is at least better than the NHS, despite the recommendations of the Francis Report following the events at Stafford Hospital, as this programme describes. Worth listening to just to hear a lawyer who had dealt with both NHS whistleblowers and ones working in a bank say, with more than a touch of incredulity in her voice, that a bank – “a bank!” – had got it right about how to treat a whistleblower and investigate their claims. Compliments must be taken where they can.
March 7 2018
The banning of the Reverend Flowers – see here – is no surprise, though the reasons perhaps are. His total unfitness for his role should perhaps have been as much of a consideration as his questionable moral compass and extra-curricular hobbies. Still, it is a reminder that due diligence – real due diligence not the cursory box-ticking which it too often is – is essential before any hire. A lesson the FCA might also have learned given its own less than glorious role in the sorry affair – see here. Another inquiry into the Co-operative Bank is now on its way. Will it tell us much more than the 2014 Kelly Review which concluded that “There was a pervasive lack of realism about the underlying strength of the business, partly arising out of a belief that as an ethical bank it was doing the right things…..”? Paradoxically, a belief that you are a good person or good organisation can lead to a dangerous complacency. It’s not what you call yourself that matters; it’s what you do.
And one of the most important things you can do is to hire the right people into an organisation. As Warren Buffet put it – “You look for three qualities: integrity, intelligence and energy. And if you don’t have the first, the other two will kill you.”
February 16 2018
Oxfam is only the latest institution to find that good intentions are not enough to make it immune from disgraceful behaviour or a culture which sees such behaviour as the norm or something which cannot be challenged.
On Radio 4’s The World at One on 13 February an interviewee said this about the aid sector: “There is a pack mentality….. The majority don’t want to encourage this sort of behaviour but do nothing because they are afraid of being seen as not being part of that male society, they don’t want to be ostracised. It’s not about grassing on your mate. It is about upholding the law”.
It could have been said about finance, Hollywood, Parliament, football or churches.
It is all too common in scandals – wherever they occur – to find that:-
- There were warning signs about an individual which were ignored.
- Due diligence was ineffective, cursory or non-existent when hiring decisions were made. See here.
- Concerns that others had were ignored or rationalised away
- People were dazzled by by a person’s reputation and/or money-making skills (sometimes more apparent than real)
- Whistleblowers were ignored or felt unsupported or were told that this was how things were
- Whatever initial investigation was carried out was too limited and nothing much was done as a result
- Leadership was inadequate
- When matters become public a response is given, usually focusing on procedures, which is wholly inadequate to how the allegations are perceived by key stakeholders.
- The entity becomes defensive and lashes out at its critics. Click here for an example.
A combination of some or all these factors combine to make a serious situation much worse than it need be. The embattled entity no longer dictates the narrative but becomes its subject.
There are many lessons to be learned. But one above all: thorough timely investigations matter.