LONDON (Reuters Breakingviews) - Bank chiefs are only human, but it might be better for investors if they didn’t act it. Jes Staley, the chief executive of Barclays, vouched for his brother-in-law in a spat with buyout group KKR – one of the British bank’s clients. Though Staley’s intervention is understandable, it’s also the second time he has blurred what ought to be a clear line between life and work.
KKR bought a business from Jorge Nitzan in 2014, and later discovered accounting problems that it says were tantamount to fraud. Staley told two large institutions which had invested alongside KKR that he didn’t believe Nitzan – his wife’s brother – was a fraudster, the Wall Street Journal reported on May 2.
Barclays shareholders expect their chief executive to maintain a dialogue with large investors. But in an ideal world Staley would have declined to talk about Nitzan in a meeting, even informally. After all, the bank’s brand goes where he does – even if he is only speaking personally.
The same flaw was evident when Staley tried last year to unmask a whistleblower who had levelled accusations against a colleague and friend that the Barclays chief felt were unfair. That was against the rules which protect whistleblowers. No damage was done, since Staley failed to find out who had taken a potshot at his pal. But he conceded he had got “too personally involved”, and lost a chunk of his bonus as a result.
For Barclays staff and investors, the conflict is not entirely unflattering. Loyalty and fairness are virtues in a boss. That has limits, though. KKR can pull away business, and has already excluded Barclays from some mandates. Other opportunistic clients might also try to use Staley’s track record of imperfect judgement to their own ends. If a tendency to elide the personal and professional make him a target, investors might prefer someone a little less human.
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