By Paul Hodgson – CCO and Senior Research Associate
Barclays’ CEO Bob Diamond has followed the lead of independent chairman Marcus Agius and announced his resignation today, though according to press reports he has done so under protest and with less altruism than Mr. Agius. Interestingly, Mr. Agius is leading the search for a replacement CEO, and it will be interesting to see if the bank has in place an effective succession plan or whether the recent controversies surrounding the bank will cause it to look elsewhere for a candidate potentially less sullied by the bank’s recent activities.
As I noted about Mr. Agius’ resignation yesterday, these acknowledgements of responsibility are rare among U.S. banking chairmen and CEOs, most often the same person. This is perhaps associated with the relative strength of bank boards in the U.K. versus the U.S. For example, GMI Ratings’ ESG (environmental, social, governance) rating for Wells Fargo, JPMorgan, and Goldman Sachs is “F”, in part driven by our poor opinion of the boards at these banks. In contrast, our rating for Barclays is “C”, as it is for HSBC, the other major international U.K. based bank. While strong boards cannot always be held responsible for operational misbehavior, they can at least be expected to act properly when such behavior is detected.