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Barclays has issued a formal reprimand and promised a “very significant” adjustment to the compensation awarded to its chief executive Jes Staley, after he broke rules surrounding the treatment of internal whistleblowers.

The Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority are investigating Mr Staley and Barclays, after Mr Staley attempted to identify the author of a letter that was treated by the bank as a whistleblow in 2016.

Barclays’ board informed the FCA and PRA after concerns were raised by an employee about the company’s whistleblowing programme earlier this year.

Barclays and an independent investigation by law firm Simmons & Simmons concluded that “Mr Staley honestly, but mistakenly, believed that it was permissible to identify the author of the letter”. John McFarlane, Barclays chairman, said Mr Staley “continues to have the board’s unanimous confidence”, and said it will support his reappointment as chief executive at the bank’s annual general meeting in May.

However, the company said it will “be issuing a formal written reprimand to Mr Staley and has decided that a very significant compensation adjustment will be made to Mr Staley’s variable compensation award. The Board will give consideration to the findings of the FCA and PRA investigations and the precise amount of the compensation adjustment will be determined by the Board once those investigations have concluded.”

Members of Barclays’ board were sent an anonymous letter in June 2016 raising concerns about a recently-recruited “senior employee” and Mr Staley’s involvement in their recruitment. A second letter was also sent to one senior executive.

According to Simmons & Simmons’ investigation, Mr Staley “considered the letters were an unfair personal attack”, and initially asked the bank’s information security team to identify the authors, before being informed that this was not appropriate.

However, in July, after the whistleblowing issue had been cleared, Mr Staley asked the information security team again to attempt to identify the author. The information security team, with the assistance of a US law enforcement agency, attempted to identify the author but was unsuccessful.

Barclays chairman John McFarlane said:

I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards. The board takes Barclays culture and the integrity of its controls extremely seriously. We have investigated this matter fully using an external law firm and we will be commissioning an independent review of Barclays processes and controls to determine what improvements may be required.

Mr Staley said:

I have apologised to the Barclays Board, and accepted its conclusion that my personal actions in this matter were errors on my part. I will also accept whatever sanction it deems appropriate. I will cooperate fully with the Financial Conduct Authority and the Prudential Regulatory Authority, which are now both examining this matter. Our whistleblowing process is one of the most important means by which we protect our culture and values at Barclays and I certainly want to ensure that all colleagues, and others who may utilise it, understand the criticality which I attach to it.

Copyright The Financial Times Limited 2017. All rights reserved.
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