Finding a replacement for Bob Diamond will be a lengthy and difficult process. Barclays’ board must identify someone can not only lead a highly complex multinational empire, but satisfy UK/US regulators and increasingly vocal shareholders.
The new CEO will need to reassess and implement strategy. He, for it will undoubtedly be a man, will probably want to clean the house and to rehire at a senior level. Regardless of what happens tomorrow at the Treasury Select Committee and independent of the culpability of the Bank of England, there will be a need to reset the cultural tone whilst hanging onto highly successful revenue generating teams and individuals painstakingly recruited over the years.
Assuming a candidate who ticks all the boxes above can be found, and if that person is external, Barclays then needs to entice him over. CEO of Barclays may be a big job, but it is with a tainted brand. And because Barclays is under the media/political/regulatory spotlight, there will be huge pressure to limit compensation.
Filling Bob’s boots will not be easy.
But shouldn’t this process have started long ago? Why isn’t there a succession plan in place just in case? Banks spend millions of dollars annually each year on identifying, assessing and managing a wide range of ever evolving more complex risks. Armies of highly qualified and well remunerated market professionals look at every type of risk and each day identify what might happen and putting in place mitigation strategies.
So why isn’t human capital risk assessed in the same way other risks are? Should this be a new metric which is measured not just internally by the bank itself but also externally by regulators? As with other risks, should it not be analysed and risk mitigation strategies put in place?
Should shareholders now demand that in highly complex organisations such as banks their long term interests are best served by putting clear and well thought out succession plans in place? Will they be asking the independent non-executive directors of Barclays why their interests were not being best served in this instance? Only 24 hours ago they had a Chief Executive in situ and an outgoing Chairman who had fallen on his sword … now they have the opposite! And regulators will be now looking on with increasing concern as they see one of the UK’s leading international banks rudderless.
Further compounding matters is the fact that the key management team – the people who know the intricacies of the organisation – are mostly Bob’s guys. Jerry Del Missier has gone already. Will Rich Ricci be next? If past history is anything to go by they are likely to follow their leader out of the door. thus compounding Barclays’ troubles further and leading to an almost generational change.
If regulators and shareholders are not asking themselves the above questions about people risk and succession management they should be. What plans sit behind Jamie Dimon at JP Morgan? Maybe co-heads are the way forward enabling talented individuals with differing skills sets and experience to manage complex financial institutions whilst also providing a fall-back position should one of them leave. I’m guessing there isn’t a hard and fast answer.
However, if human capital isn’t a risk metric yet it should be high on the agendas of boards, regulators and shareholders. After all, Bob Diamond may not be the last senior resignation we will see in the coming months.
The author is an experienced headhunter who has run several major firms in the City and overseas.