barclays-staley

Barclays PLC is preparing to name former J.P. Morgan Chase & Co. executive James Staley as its next CEO. However, this is not the first time Barclays board of directors considers that. Three years ago, Barclays was in the crisis of the Libor interest rate rigging scandal. The former CEO Bob Diamond, an American banker, was forced out by the Bank of England. At a crisis meeting to decide who should replace Mr Diamond, most board members agreed that the best candidate was Mr Staley. However, PR adviser Sir Alan Parker warned of a terrible backlash from regulators, politicians and the media if Barclays hired another American investment banker. Instead, the board opted for the safer choice of Mr Jenkins, who was running its British retail bank. Unfortunately, that was a mistake. It took three years for Barclays to realize it and they fired Mr Jenkins brutally in July.

This is a prefect example of hiring executives lack of weakness rather than with strength. Consensus decisions about executives almost always sway the process away from strength and toward lack of weakness. Nobody is perfect. No matter how great an executive is, someone will find issues about him/her, especially when s/he is under investigation of a group of smart and experienced people. Under a microscope, little issues make strong candidates look like seriously wrong. During the crisis of Libor rigging scandal, Barclays need a strong investment banker to save themselves. But they chose a retail banker for PR consideration. The board should have fired themselves.

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