A recent scandal within the Financial Sector created a media frenzy when news broke that Barclays CEO Jes Staley had been investigated for attempting to unmask a whistleblower within his organisation. The news deals a fresh blow to the bank's efforts to reform its culture and repair its reputation in the wake of the Libor-rigging scandal.
The consequences of Staley’s actions resulted in his £1.3 million bonus payment being cut from his annual salary. Staley has apologised to the bank claiming he was unaware that it was not permissible to identify the whistleblower.
Barclays are regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) who are now investigating the matter. The FCA and PRA rules on whistleblowing clearly state that a whistleblower’s confidentiality must be protected and that firms need to create a culture that encourages employees to raise concerns about poor behaviour.
The whistleblower confidentially made claims about the appropriateness of the recruitment process and was alleged to have made claims of a personal nature about a senior Barclays employee. These claims were taken personally by Staley, who felt that they were malicious and called upon the banks security firm to expose the whistleblower.
In the aftermath of the scandal the bank has confirmed that the board will stand by Staley after they “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”. They emphasized that Staley had “honestly, but mistakenly, believed that it was permissible to identify the author of the letter”.
Whistleblowing is an essential component of good corporate governance which needs to be embraced from the top down. Fostering an open culture of disclosing wrongdoing in the workplace requires senior managers to follow the policies they have implemented. Whilst it may be understandable to some that Barclays backed Staley, the bank’s response to Staley’s actions is likely to have sent a mixed message to their employees about its commitment to whistleblowing.
“There can be no retreat from becoming a values-driven organisation which conducts itself with integrity at all times.” This was a quote in an internal memo to Barclays staff from Staley when he was named as their new chief executive in 2015. However, many will believe that such verbal gestures carry little weight when Barclays commitment to whistleblowing has been called into question.
Businesses expect their employees to adopt their ethical codes. It is fundamental to effective whistleblowing that when an employee identifies unethical behaviour they can raise concerns confidentially and without fear. This is a challenge that Barclays will need to react to immediately or run the risk that further concerns witnessed by their employees will not be raised for fear of being unmasked by their employer.
SeeHearSpeakUp provide whistleblowing solutions to companies globally, including Government Departments, Financial Organisations and Retail lifestyle groups. For more information on our services, call the team on + 44 (0) 1224 625111.