Barclays 2014 Annual Report Download - page 215

barclays.com/annualreport Barclays PLC Annual Report 2014 I 213
Reputation risk
Through the Transform initiative, Barclays has developed formal
governance and standards around reputation risk to ensure that the
Group is able to manage and mitigate related risks proactively and on
an informed basis.
The Reputation Key Risk Framework outlines the processes and actions
required of the business. These include regular and forward looking
reviews of current and emerging reputation risks so that a topical and
comprehensive reputation risk profile of the organisation can be
maintained. The external reputation environment is monitored via
“horizon scanning” and validated via stakeholder dialogue conducted
across a broad range of opinion formers. This process identifies priority
themes and issues that stakeholders consider are impacting, or are
likely to impact, the reputation of Barclays and our peers.
Summary of performance in the period
The following key themes were consistently identified during the 2014
horizon scanning and stakeholder dialogue and were reported to the
Group Reputation Committee.
Litigation, investigations and culture change
Ongoing concerns about incidences of past conduct, corporate culture
and litigation and regulatory investigations in the banking sector
Failure to act in accordance with rules and regulations, has a
cumulative damaging impact on Barclays’ and the banking sector’s
reputation and licence to operate. Barclays’ brand continues to be
adversely affected by new and ongoing investigations into instances of
past conduct. These reinforce negative stakeholder perceptions and
impair the Bank’s ability to rebuild trust. They also detract from the
positive impact achieved by transformative work across the bank to
deliver cultural and behavioural change.
Living Barclays’ values is at the heart of this transformation. It is critical
to the success of the Transform plan that stakeholders are confident
that Barclays’ acts with honesty and integrity. Where there is
wrongdoing on the part of individuals, the values require remedial
action to be quickly and decisively taken and, when there is a case to
answer with regulators, responsibility and sanctions are accepted and
lessons are learnt.
During 2014, following investigations:
Q The Group was fined by the FCA for breaches of its rules in relation
to certain systems and controls relating to the Gold Fixing
Q Barclays was fined for breaching rules governing the protection of
clients’ custody assets
Q Several banks have reached settlements with the FCA and the US
Commodity Futures Trading Commission (CFTC) with respect to
Foreign Exchange trading. The Group is continuing to engage with
our regulators and authorities with the objective of achieving a
resolution in due course
Transparency
A demand for greater transparency and openness in bank decision-
making generally
Operating openly and transparently is widely acknowledged as one of
the most important reputation drivers for business. The Group is
committed to being an open and transparent organisation and
continues to work towards this long-term goal. The following examples
demonstrate steps taken in 2014:
Q The Balanced Scorecard approach was cascaded down throughout
the organisation. It is integral to how individual and business
performance is assessed and rewarded and the Group reports on
progress annually so that stakeholders can hold the bank to account
Q Barclays published a Country Snapshot Report in response to the
Europe-wide CRD IV requirement to disclose 2013 turnover and
employee numbers for all countries of operation. Barclays also
adopted early the additional requirements to publish data on profit,
tax paid and subsidies received in each country alongside a brief
explanation of the business undertaken
Q To aid transparency in the Group’s engagement with policymakers,
responses to government consultations and associated position
papers are now published on the Group website
Q Barclays fully implemented the Enhanced Disclosure Task Force
(EDTF) 32 recommendations for improving bank risk disclosures
Q Barclays won the inaugural Building Public Trust Award for corporate
governance. The Building Public Trust Awards were created by PwC
and the judges considered the Group’s reporting combined technical
excellence with an unusual level of insight and described openly how
governance is being applied to previously problematic areas
Remuneration
Ongoing concerns around executive remuneration
Remuneration levels continued to be a source of reputation risk in 2014
from the broader banking sector and Barclays’ own perspectives. The
Group is committed to paying at levels required to attract and retain
good people, while not paying more than we judge to be necessary,
and to delivering a greater share of income generated to shareholders.
See the Remuneration Report on pages 77-110 for further information.
Climate change
Concerns that the finance sector should take more account of climate
change impacts (positive and negative) in investment and lending
decisions
The impact of climate change is an important long-term environmental
and societal issue of widespread public, political and corporate
concern. It is a source of risk, including reputational risk, evidenced by
the interest of a range of stakeholder groups in the environmental and
social risk criteria considered by banks when providing financial
services to environmentally sensitive clients and sectors.
Banks also play a pivotal role in enabling the flow of capital towards
climate change mitigation and adaptation. Green Bonds continued to
grow as a way of financing environmental projects and during 2014
Barclays:
Q Was a signatory to the Green Bond Principles and also launched the
Green Bond Index in partnership with MSCI Inc
Q Has been an active underwriter on a variety of Green Bond
transactions for corporate, supranational and municipal issuers
Q Has supported the sector by committing to invest a minimum of
£1bn in Green Bonds by November 2015 to form part of our liquid
asset buffer
Reputation risk is defined as damage to Barclays’ brand
arising from any association, action or inaction which is
perceived by stakeholders to be inappropriate or
unethical.
All disclosures in this section (pages 213 and 214) are unaudited unless otherwise stated
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