Last week’s testimony of Barclays Plc Chairman Marcus Agius to a U.K. parliamentary committee received less press than the earlier testimony of his former chief executive officer, Robert Diamond, but Agius’s performance was more remarkable.
Diamond sounded evasive -- like the typical post-2008 American bank CEO, a now well-known character -- and ignored parliamentary protocol, calling members of the committee by their first names. Agius, in contrast, answered painful questions about the Libor-fixing scandal thoroughly, paying respect to the people’s representatives. When he criticized himself, it was without spin. And, most remarkable of all, he did this after having just resigned from the 322-year-old institution that he had been trusted to steward but that had strayed into shallow water.
Praising bankers isn’t a popular thing to do nowadays, especially one from Barclays, but Agius’s appearance before the committee is worth watching in its entirety. Ask me what you wish and I will answer, he seemed to assure the lawmakers, and I might tell you things you haven’t even asked because I think you should understand everything. He spoke fully and frankly, as the British say, with no defensiveness.
When Conservative Member of Parliament David Ruffley tried to corner Agius by asking whether a letter from the U.K. Financial Services Authority was the most “damning” he had ever received, he showed no disdain for the question. “I do not wish to be pedantic,” he replied, “but I do not regard this as damning. I regard this as a firm letter from our regulator.”
When Conservative MP Andrea Leadsom read a quote from Jerry del Missier, then the chief operating officer, about making Barclays “the industry benchmark for operational excellence and control,” and asked, “Was that a joke?” Agius did not take the bait, did not lose patience: “No, I do not think it was a joke,” he said. He didn’t throw his colleagues under the bus, or blame the times or anything else to help himself. By the time the final questioner, Liberal Democrat MP John Thurso, remarked, “We have met socially and I believe you to be a man of personal honor, so I am sure you are finding this a very difficult time,” Agius had earned the kind word.
The public’s revulsion of bankers today stems partly from their refusal to take real responsibility for their contributions to the global economic mess or to show gratitude toward the taxpayers whose money carried them back from the abyss. Last year, Diamond famously remarked to the same House of Commons committee, “There was a period of remorse and apology for banks -- that period needs to be over.” It’s not. In fact, thanks to Libor, it won’t end any time soon.
A friend of mine, a banking CEO based in Asia, told me last week what everyone seems to know, but global bank CEOs won’t admit: The too-big-to-fail institutions are also too big to manage. Boards have to choose and trust the right leader, who in turn must select the right deputies, and so on down the line. What went on on the trading floor at Barclays wasn’t Marcus Agius’s fault. Yet he was in charge and someone had to take responsibility. The bank lost an honorable man -- all because 14 out of 140,000 employees behaved wrongly and because Diamond and del Missier didn’t communicate clearly about an important conversation Diamond had with Paul Tucker, the deputy governor of the Bank of England.
In a lecture he gave last year, Diamond said, “Culture is how people behave when no one is watching.” That’s pithy, but how does it work exactly when there are 140,000 employees, many of whom get paid based on the short-term profits they generate?
Agius wasn’t culpable (he made that point) and yet he was responsible (he also made that point), all the way down to the 14 rogues. He stepped up and accepted that responsibility so forthrightly, it’s hard to think his personal stock didn’t rise. He never spoke the stilted words that so many seem to use nowadays to evade responsibility: “I apologize and I accept full responsibility.” Instead, he said, “I regret deeply what has happened to Barclays and I have said in my resignation letter, I am truly sorry.”
Agius’s disappointment must be profound. Barclays went first to the authorities and “bent over backwards” cooperating, in the words of the acting FSA enforcement chief Tracey McDermott, yet got little credit for it. Agius reminds us that it isn’t fair to castigate all bankers. Yes, he will be remembered as the chairman of a board that didn’t control its senior executives, but rather than hit back under pressure, he stood up and did the right thing. His testimony and his actions should show bankers everywhere how to play a bad hand in these tough times, when everyone is watching.
(Robert Boxwell is a director of the consulting company Opera Advisors, based in Kuala Lumpur. The opinions expressed are his own.)
Today’s highlights: the editors on California’s model maternity-leave program and on remodeling austerity in the U.K.; Stephen L. Carter on lying politicians; William Pesek on the loss of faith in bankers; Virginia Postrel on economic segregation; Amity Shlaes on how states can remake the tax system; Jonathan Weil on the Barclays Libor-rigging settlement; Nell Minow on the U.S.’s budding shareholder revolt over excessive corporate pay.
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