It was a culture of high pay and short-term incentives brought on by a "lack of self-awareness" that led to the disrepute of Barclays PLC, the U.K.'s second-largest bank, according to an independent report by lawyer and investment banker Anthony Salz.
Barclays' board ordered a review of its business practices last summer, right before its former embroiled chairman Robert Diamond resigned after the bank admitted to trying to rig interbank interest rates
The Salz Review, published Wednesday, blamed Barclays' rapid expansion in the years leading up to the financial crisis for the current state of the lender: a disparate set of businesses, each with its own culture.
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"The result of this growth was that Barclays became complex to manage," the report said. "Despite some attempts to establish group-wide values, the culture that emerged tended to favor transactions over relationships, the short term over sustainability, and financial over other business purposes."
The 235-page report, which reportedly cost Barclays $25.7 million to produce, criticized the bank for using money as a motivator for its employees. Salz found that between 2002 and 2009, Barclays was "overly generous," paying out an average of $257.5 million a year in long-term bonuses for a changing group of about 60 employees.
Salz recommended that the board should play a more active role in running the business, and the human resources department should be given more power to stand up on issues such as pay.
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"The report makes for uncomfortable reading in parts," Barclays Chairman David Walker said in a statement. "Our plan is to report back in advance of the [April 25 annual general meeting] on how we intend to implement the recommendations made, particularly those that go beyond the scope of work already under way."
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