Here’s something that doesn’t happen every day: The chairman, CEO and chief operating officer of a major global banking powerhouse resign from their jobs within a two-day stretch. It’s being called an “boardroom bloodbath,” or the “Barcopalypse,” in the words of some on Twitter, as the three top executives at Barclay’s step down.
The moves come less than a week after the bank said it would pay $450 million in fines to U.K. and U.S. regulators to settle allegations that the bank had attempted to manipulate key interest rates. In essence, traders at the bank were accused of trying to rig a benchmark rate that helps to set global borrowing costs. (For a good discussion of the scandal for those of us who have no idea what LIBOR stands for, check out Heidi Moore’s great explanatory piece for National Public Radio.) The probe involves many other financial institutions and took an unexpected turn Tuesday, the Wall Street Journal reported, when Barclay’s released documents about a call between outgoing CEO Bob Diamond and an official from the Bank of England.
The turmoil at the top leaves the bank in an extremely unusual leadership situation. The chairman, Marcus Agius, was the first to resign, announcing Monday that he would be stepping down. Calling himself “the ultimate guardian of the bank's reputation,” he said “the buck stops with me and I must acknowledge responsibility by standing aside.” The move, some are reporting, was an effort to protect the job of Diamond, who was also under pressure.
If that was the case, it didn’t work. On Tuesday, CEO Bob Diamond himself resigned immediately, despite issuing a lengthy letter to employees the day before that showed no hint of his departure (“we will emerge from this period as industry leaders in every sense of the word,” he wrote). Chief Operating Officer Jerry del Missier, who had only been in the position for a month but was the bank’s former co-head of investment banking, also stepped down Tuesday. As the Wall Street Journal put it: “The departures effectively leave one of Europe's largest banks without leadership.”
That’s not entirely true: Agius, in a strange twist given that he was first to resign, will remain while Barclay’s searches for a replacement for the chief executive, a process Agius will lead. Even still, that amount of turnover at the top can leave a company in a precarious position at such tumultuous times. On top of parliamentary hearings and the management issue of leading a company through the aftermath of such a mess, there is the ongoing eurozone crisis. Rooting out what prompted the rate manipulations to happen will require immediate attention toward reviewing past practices, overhauling incentive systems and examining who else in the company might need to make their exit.
All of that will require untainted and permanent leadership, and finding a replacement for Diamond may not be easy, some are warning. The bigger question, of course, is how much impact new leadership—at Barclay’s or any other bank that has gotten caught up in mess after mess in recent years—can really have in the long run without broader systemic change. The ill effects of power and greed, after all, are hard-wired into us all.
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