Barclays 2010 Annual Report Download - page 10

Group Chairman’s statement
continued
Payment of Tax
Successful banks pay tax on their profits and in the last ‘normal’ year
before the credit crunch (2006), the total direct and indirect taxation
paid by the banking sector in the UK was nearly £40bn. As the sector
recovers, it will again become a major contributor to Governments
across the world and particularly in the UK.
Payment of Dividends
Successful banks pay dividends to their owners – typically pension funds
and mutual funds – and dividend payments from UK banks totalled over
20% of total FTSE dividends in 2006. This figure has been significantly
reduced because of the crisis and in Barclays we have had to maintain a
conservative dividend policy because of regulatory uncertainty. But it is in
the interests of our owners and individual pensioners to see a successful
banking system again providing a significant source of income to
institutional and private savings vehicles. Our dividend policy has been
progressive over the past two years and we expect it to remain so.
Community Support
Investing in the communities in which we operate is something that has
always been important to Barclays and our employees around the world.
During difficult economic times, we have even more responsibility to
the communities where we live and work. Despite the impact of the
crisis, Barclays resolved not to reduce its level of community support
and, in 2010, we invested over £55m in carefully targeted programmes
around the world.
Our truly global community investment programme now supports
projects in 37 countries, reaching more than one and a half million
people and providing support to over 8,000 organisations.
To make this happen, over 62,000 colleagues gave their time, energy
and expertise to volunteering, fundraising and regular giving initiatives
throughout the year – a record figure, of which we are justifiably proud.
You will see from the Chief Executive’s review that Citizenship, and in
particular, demonstrating our credentials as a global citizen, is one of
our priorities in 2011.
The scale of each of these components of contribution is profoundly
affected by the ability of the UK industry to compete with the best
international peers. In order to maximise the contribution of UK banks
to society, we must be allowed to compete on a level playing field within
a secure regulatory framework. We recognise the need to pay responsibly,
including much greater levels of deferment, greater use of equity and
the ability to claw back payments in specific circumstances. As Chairman,
I am acutely aware of the public disquiet over remuneration in the industry.
Barclays is committed to acting responsibly in this area. We are fully
compliant with all regulatory requirements and our remuneration systems
are designed to reward success, not failure. If we are to remain competitive
in a global market place, however, it is simply not an option for us
unilaterally to reduce compensation levels. We can only contribute to
society if we are able to recruit and retain good people. Against the above
background, we are very grateful to John Varley in leading the industry
discussions with the UK Government which resulted in a collective
statement by the principal UK banks on lending, tax, pay and broader
contributions to the economy and to society. The statement underlined
the banks’ recognition of their responsibility to support economic recovery
and to show responsibility on pay. Accordingly, Barclays 2010 bonus pool
was down 7%, despite increased profits and income, in line with our
commitment to the UK Government for restraint.
CEO Succession
A key development during the year was the announcement that Bob
Diamond would succeed John Varley as Chief Executive. While I set out
in the Corporate Governance Report the background to the decision to
appoint Bob and in particular, the process that was followed, I would like
to pay tribute here to the exceptional job performed by John during his
tenure as CEO. Barclays has been transformed since he became CEO in
September 2004, enabling Barclays to take its place in the first rank of
global universal banks. There can have been no greater test of leadership
than to have been CEO during the financial crisis and John brought the
bank through this period with courage and creativity. We are fortunate
that he will continue to be available to us as an advisor on regulatory
matters until September.
We are also fortunate that we have such a capable and qualified replacement
in Bob Diamond. He has a proven track record as a business leader and
the Board and I are looking forward to working with him to take Barclays
forward in the years ahead as he builds on his many achievements to date.
Board Changes
We appointed two new Directors during the year. Dambisa Moyo was
appointed in May and her background in financial services and as a global
economist will bring valuable insights to the Board. Alison Carnwath was
appointed in August. She is Chair of Land Securities and has a long history
in financial services as a banker and a director of a number of global
financial services businesses. Leigh Clifford retired from the Board on
30 September. He made an extremely valuable contribution to the Board
and we benefitted greatly from his experience and his wisdom, particularly
during the financial crisis. We wish him well for the future.
In conclusion, I would like on behalf of the Board to thank two particular
groups of stakeholders. First, our many shareholders for their support in
2010. We weathered the storm as well as we did because of a combination
of public support – for which we are sincerely grateful – proactive
management and the underlying strength of our business. Our resolve
now is to build on this strength to sustain the delivery of value for our
shareholders into the future. Finally, our thanks go out to all Barclays
147,500 employees who have continued to work very hard and to show
dedication to the service of our customers and clients. This lies at the
heart of any success we may achieve.
Marcus Agius
Group Chairman
10th March 2011
08 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10