In 2016, Jes Staley, the chief executive officer of Barclays, was fined US$1,5 million for trying to expose the identity of a whistle-blower – a sum that he was required to pay personally out of his own pocket. Staley employed a personal friend, Tim Main, as a senior executive in the company. This sparked a whistle-blower to report the conflict of interest via a series of letters accusing Staley of hiding his relationship with Main from the board during recruitment . Jes Staley’s subsequent attempt to unmask the whistle-blower using the bank’s own security unit was perceived as unethical and a misuse of internal resources. Staley asked the Barclays’ internal investigation team to identify the whistleblower by finding the author of the letters. The conflict of interest was investigated by the Barclays compliance unit (Fletcher, 2018). During this time, Jes Staley claimed that he was unaware that he was not allowed to expose the identity of anonymous whistle-blowers (Vahedy, 2017). After the incident, external regulators forced Barclays to tighten its whistle-blower protection policies. Barclays was also fined US$15 million, because the New York State Department of Financial Services said its investigation had found "shortcomings in governance, controls and corporate culture relating to Barclays’ whistleblowing function" (Makortoff, 2018). A CEO should always have oversight of all risks in a company. However, this case study shows that certain relationships between the CEO and the board of directors can hinder effective oversight.
Discuss the complications of oversight that are presented in this example with your peers in this small group discussion. In your discussion, pay particular attention to why frameworks like the King IV Code propose strict suggestions for the composition of executive members of an organisation.