Barclays’ ethical turn

Antony Jenkins, Barclays’ chief executive is turning a new leaf by implementing a strategic review programme (Transform) to help achieve the goal of becoming a more ethical business. This comes after the bank was levied hefty fines for manipulating Libor rates and mis-selling PPI (payment protection insurance) schemes. Jenkins wants the bank “to be judged by our actions not words” in rebuilding trust and a tarnished reputation. The Transform programme has already launched into action with fundamental changes to the business, including the closing of the Structured Capital Markets division, which was responsible for clients’ tax-avoidance.  There will also be an overhaul of the variable compensation system and 3,700 jobs will be slashed worldwide. Additionally, Barclays will be reducing the presence of its Equities and Investment Banking division in continental Europe and Asia. Jenkins is attempting a comprehensive culture change from top to bottom with a values and measurement system, the emphasis is on upholding customers’ interests; not selling products or engaging in business activities which are not in the customers’ best interest. Employees who are not willing to act within these key values (respect, integrity, service, excellence and stewardship) have been asked to resign; a far cry from the previous high-risk culture.  Barclays is facing a difficult balancing act of remaining competitive, providing integrity in their customer service and keeping shareholders happy with their returns in the long term. The Transform programme may well prove to be a market signal to other banks to form their own ethical turn. Whether it will prove to be more words than action, Barclays’ Transform programme has strategically placed it as a pioneer within the banking environment. References: http://group.barclays.com/transform/strategicreview http://www.bbc.co.uk/programmes/p0143r7f - ‘A bank putting ethics before profits?’ BBC World Business Report http://www.guardian.co.uk/business/2013/feb/13/barclays-antony-jenkins-reputation http://www.guardian.co.uk/commentisfree/2013/feb/12/barclays-he-says-he-gets-it-editorial Summeet Seyan is currently developing her career in CSR and has a background in globalisation and graphic design.