Even a CEO’s authority has its limits.
James Staley, the U.S. chief executive of British banking heavyweight Barclays was recently reminded of this fact, and offered other executives a case study in how not to handle a whistleblower complaint in the process.
As the New York Times reported this week, Staley finds himself being investigated by British authorities after he called on Barclays’ internal security team to try to uncover the identity of a whistleblower in an “‘honestly held’ but ‘mistaken’ belief that he had clearance to do so.” According to the Times, the Barclays security team even received assistance with the search from a United States law enforcement agency.
Staley’s effort did not sit well with the bank’s leadership, including Chairman John McFarlane, who the paper reports had “personally chastised” Staley, and had expressed his disappointment in the CEO’s actions directly to him.
The roots of McFarlane’s frustration trace back to last summer, when Stanley brought on Tim Main—a friend and former colleague of Staley’s at JPMorgan Chase—to chair Barclays’ global financial institutions group.
“Mr. Main, who was known for his team-building skills at JPMorgan, seemed like a great hire” for Staley, the Times wrote.
In order to join Staley at Barclays, Main left New York-based investment banking advisory firm Evercore Partners, where he had been “a star,” according to Roger Altman, the firm’s founder and chairman.
Just a month after Main’s hiring, however, Barclays officials received letters sent by an anonymous whistleblower who claimed that Main had “acted erratically” while at JPMorgan; a claim later supported by two JPMorgan employees who reported to Main during his time there.
Barclays did not disclose the details of the letter, but Staley reportedly took offense to the whistleblower’s allegations leveled against Main, which “related to personal issues from many years ago,” Staley wrote in an email to employees. “The intent of the correspondents in airing all of this,” he told workers, “was, in my view, to maliciously smear this person.”
In response to these claims, Staley twice asked Barclays’ internal security team to find the letter’s author. The inquiry didn’t reveal the whistleblower’s identity, and the bank ultimately disregarded his or her assertions.
While both Main and Staley have declined to comment on the situation, Staley did release a statement saying he has apologized to the Barclays board and “will accept whatever sanction it deems appropriate,” which will include a “very significant compensation adjustment,” according to the bank.
An independent law firm was commissioned to investigate Staley’s attempts to unmask Main’s anonymous former colleague, and determined that Staley “erred in seeking out the … whistleblower, but that his belief that he had clearance to do so was an honest mistake,” according to the Times.
That could very well be. But the Barclays brouhaha serves as just the latest example of the hostile treatment that whistleblowers continue to face.
Jeffrey Pfeffer, a professor of organizational behavior at Stanford University’s Graduate School of Business, told the Times as much.
“Whistleblowers are typically treated horribly, even in the government, let alone in the private sector,” said Pfeffer. “People don’t like to have problems pointed out.”