Wednesday, April 24, 2013
A recent independent report on British bank Barclays corporate culture, known as the Salz Review, addresses the impact some employees’ conduct has had on the bank’s reputation. It does not, however, go far enough in proposing steps to encourage and protect whistleblowers as a way to prevent future misconduct.
Barclays management commissioned the review by Anthony Salz, a corporate lawyer turned investment banker, following Barclays $450 million settlement last year for its role in the LIBOR-fixing scandal. The purpose was to identify ways to improve the bank’s damaged reputation by addressing the underlying issues that led to Barclays’ role in rigging the London benchmark lending rates.
The Salz Review looks closely at past incidents judged to be especially reputation-damaging and offers recommendations for new principles and standards to help correct the damage these events inflicted. Unfortunately, it fails to make any concrete recommendations regarding whistleblowing, saying only that, “Barclays should maintain robust arrangements for raising concerns (whistleblowing) which are perceived to protect those raising them and to lead to actions being taken.”
By neglecting to explicitly address whistleblowing procedures, Salz limits the effectiveness of his recommendations and the scope of his review. Whistleblowers can be important sources of information about misconduct long before the effects are seen in damage to the bank’s reputation and harm to its customers. A robust and well laid-out whistleblower procedure might eliminate the need for this kind of grand inquiry into corporate culture in the future.