BEA3006 Corporate Governance, Accountability and Audit Tutorial 2
Barclays Group and Board of Directors
1. Does Barclays have a unitary (single-tier) or two-tier board?
Main board from which the members are part of committee’s such as Audit, Risk, Remuneration etc.
Each committee has a chairman who reports to the main board.
Executive directors are full-time employees and form part of the management team.
Non-executive directors are separate from the management team, monitoring its success/failure.
However, there is one single board in which the CEO, Chair, Executives and Non-Executives are included in.
2. What is the balance between executive and non-executive directors?
Board – Group Chairman, two executive Directors, nine non-executive Directors.
3. How diverse (by gender, nationality, professional background) is the Barclays’ board? And the senior management team?
Actually on the board is one woman, Dambisa Moyo (member of the Board Risk Committee and Citizenship Committee). All other members are men.
Chairman – Sir David Walker – HM treasury, IMF, Bank of England, Securities and Investment Board, Chairman and CEO of Morgan Stanley
CEO – Antony Jenkins – former CEO of Barclays Retail and Business banking. Started career in Barclays management development programme. Joined Citigroup and returned to exec committee.
Majority are middle aged white men, British.
4. Why might a company like Barclays benefit from diversity in its board and senior management?
Creativity and different perspectives – people may respond to different situations in different ways. May acquire information from more/different sources?
Access to larger range of resources and connections
Career incentives to lower level employees – shows commitment to promotion of minority workers?
Improve public relations/perception. Social responsibility.
Drawbacks such as slower decisions, communication, conflict, possibility of choosing diversity over quality/impartiality.
5. Looking at the backgrounds of the individual directors, can you identify experience or expertise likely to be valuable to Barclays?
Financial expertise is a key theme (people come from PwC, Morgan Stanley, Citigroup, FRC)
Political background (Reuben Jeffery III as US Under Secretary of State – local knowledge of US and political influence)
Various positions on other boards (e.g. Chairman of BT Group, easyJet etc.)
6. What board committees exist at Barclays? Explain the purpose of each of these committees.
Board Audit Committee
Reviews accounting policies and the contents of financial reports
Monitors disclosure controls and procedures and the internal control environment
Considers the adequacy and scope of the external and internal audit
Oversees the relationship with external auditors
Board Citizenship Committee
Reviews and approves Barclays overall citizenship strategy and associated policies
Considers Barclays reputational risk issues and exposures
Reviews and approves the community investment strategy, key performance indicators and objectives, and agrees the annual community investment budget
Oversees the Treating Customers Fairly agenda and progress against objectives
Board Corporate Governance and Nominations Committee
Reviews composition of Board
Recommends appointment of new directors
Considers succession plans for Chairman and Chief Executive positions
Reviews the Talent Management Programme
Monitors corporate governance issues
Oversees the annual Board performance review
Board Remuneration Committee
Sets the overarching principles and parameters of remuneration policy across Barclays
Considers and approves remuneration arrangements for executive directors and senior executives
Approves individual remuneration awards
Agrees changes to senior executive incentive plans
Governs employee share schemes
Looks at strategic HR issues
Board Risk Committee
Recommends total level of risk we are prepared to take (risk appetite) to the Board
Monitors risk appetite
Reviews limits for individual types of risk
Monitors the risk profile
Obtains assurance that principal risks have been properly identified and are being appropriately managed
8. Why are board committees necessary?
Required by UK Corporate Governance Code (2010)
Board meets less frequently, for less time?
Less specialised/technical discussions at board meetings – instead just summaries of committee meetings.
Some board members will be suited/expert in certain areas.