Barclay’s PLC, the major U.K. bank, was fined £290 million by regulators in the United Kingdom and United States after it was found guilty of manipulating the interbank lending rate Libor. In August 2012, a new CEO, Anthony Jenkins, took over after his predecessor Bob Diamond resigned in the wake of the allegations and fines.
As an early order of business, Jenkins decided it was time to change the ethics culture of the bank and to improve the bank’s ethics. Jenkins sent a memo to the bank’s 140,000 employees informing them that from now on employee performance would be evaluated on a set of ethical standards. The new standards would be part of the bank’s code of conduct, and it would be built around five key values: respect, integrity, service, excellence, and stewardship. Jenkins was quoted as saying that “We must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values.”
Jenkins said that the bank’s culture has been “too short-term focused, too aggressive and on occasions too self-serving.” Some of the changes being introduced include the following: the reward structure will be altered so that it upholds the company’s values; a new code of conduct will be issued and expected to be signed off on by everyone; a new role called head of compliance will help redesign the bank’s compensation policies.
Jenkins’ message to those who don’t desire to make the changes is simple—Barclay’s is not the place for you—the rules have changed and you will no longer feel comfortable at Barclay’s and we will not be comfortable with you as our colleagues.
1. What is your evaluation of Jenkin’s proposed approach to changing the ethics culture at Barclays? 2. Can an ethics culture change of the magnitude desired be initiated effectively by a memo ? What else is necessary and why?
3. Is a threat of discharge the best way to frame a desire for new, ethical values? How would you recommend the bank take on such its gargantuan ethics program?
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