Barclays 2014 Annual Report Download - page 113

barclays.com/annualreport Barclays PLC Annual Report 2014 I 111
Barclays’ implementation of the Salz Review recommendations
The Board commissioned a review of Barclays’ business
practices in July 2012, led by Sir Anthony Salz. Barclays is
on a transformational journey at the end of which all of
the 34 recommendations published in April 2013 will be
implemented in full. To date, we have made material
progress and believe that implementation can now be
moved from project stage into business as usual, where
change can be further embedded, sustained and observed.
In this update, we have not individually summarised progress against
each of the recommendations, but rather addressed them in groups by
theme. Please refer to previous annual updates for details of past
actions taken.
1 Setting high standards and transparently monitoring progress
(recommendations 1, 2, 3, 5, 34)
Since launching the Values and Behaviours in 2013, we have focused
on embedding them into our key processes, including training,
recruitment, performance management and leadership development.
We have also implemented on-going surveys to measure progress. The
new standards are embedded in individual performance reviews and
linked to compensation (see page 77 for further details). Overall
performance across the Group as a whole is managed through the
Balanced Scorecard.
In the spirit of openness, we also externally publish progress against
our Group Balanced Scorecard including customer complaints (see
barclays.com/complaints). We have continued our efforts to improve
direct shareholder interaction and we regularly ask external
stakeholders such as our regulators for feedback. Encouragingly,
Barclays has received data indicating some improvement over the last
two years, for example, from the periodic survey of global opinion-
makers conducted for us by YouGov where scores on ‘Barclays
operates openly and transparently’ have improved 5%.
2 Enhancing the Board for greater effectiveness
(recommendations 7, 8, 9, 10, 11, 12, 13, 14, 15, 27)
We have completed all recommended actions associated with our
Board. Most, such as new Board committees for risk oversight, are now
well established. For example, we continue to ensure c.50% of our
non-executive Directors (NEDs) have financial services experience,
whilst we also seek diversity to ensure effective challenge of
management performance. Eleven of our NEDs continue to sit on more
than one Board committee, in order to ensure smooth cross
coordination. In addition, measures have been taken and the associated
processes sustained, to ensure that the Board receives timely, high
quality materials and input in support of its discussion and oversight
function.
For further detail, see the Governance section, notably page 61 for
the results of our annual Board effectiveness review where progress
against the Salz recommendations will be monitored going forward.
3 A new culture and set of values
(recommendations 4, 6, 19, 30)
We remain firmly committed to the Values introduced in January 2013,
with 92% of permanent new joiners either attending or on track to
attend the ‘Being Barclays’ induction course within 90 days of joining.
All candidates for both hiring and promotion are also now evaluated
against our Values as well as their competence. Our latest employee
opinion survey showed an improvement from 2012 to 2014 in the
number of colleagues who feel able to report unethical behaviour
regardless of consequences.
Any material cultural change takes time to embed and cannot be
demonstrated conclusively 24 months into the journey. Although we
have established firm foundations, we will continue to closely monitor
how well programmes and initiatives to further accelerate culture
change are being embedded. We will also refine and enhance,
where appropriate, to ensure effective outcomes and sustained
cultural change.
4 Cultivating stronger, values-driven, appropriately incentivised
staff (recommendations 16, 17, 18, 20, 21, 22, 23, 24, 25, 26)
Barclays took early action to address concerns around incentives and
compensation; for example, incentive policies for UK retail sales
employees were updated in December 2013 to abolish product-sales
incentives. We continue to align incentives to non-financial
performance measures, including risk and behaviour related indicators,
whilst non-financial rewards for outstanding examples of values-based
behaviour have been deployed globally.
Our current Remuneration Policy can be found on pages 80 and 81.
5 Risk culture, framework and control functions
(recommendations 28, 29, 31, 32, 33)
Barclays published our Enterprise Risk Management Framework in
December 2013 and conducted our annual refresh of it in Q4 2014. It
continues to be embedded more deeply into the businesses and
functions, with progress evaluated by Barclays Internal Audit. For
example, Strategic Risk Assessments were integrated into each
cluster’s 2014 Risk Reviews as part of the annual financial planning
cycle. Incidents were subject to the systematic ‘lessons learnt’ process
that has been introduced throughout the Group in late 2014 to ensure
that we continue to understand and address root causes of issues, as
well as apply those insights more broadly. Details on our ‘lessons learnt’
approach and other changes to the risk culture at Barclays can be
found on page 104 of the Barclays Pillar 3 Report.
Key activities will continue to be refined and rolled out into 2015.
A summary of our risk management approach and results can be
found on pages 99 to 110 of Barclays Pillar 3 Report.
Governance
The Strategic Report Governance Risk review Financial review Financial statements Shareholder information