The U.K. Financial Conduct Authority’s (FCA) decision to ban the former chief executive officer of Barclays for misrepresenting his relationship with Jeffrey Epstein has seemingly reaffirmed the notion that everyone—even the boss—is accountable for their actions.
The FCA announced last month its intention to fine Staley 1.8 million pounds (then-U.S. $2.2 million) and exclude him from holding a senior management role in the financial services industry. Staley appealed the decision to a tribunal.
Certainly, it’s a bold move. While the regulator has previously disciplined bank CEOs—e.g., Mohammad Ataur Rahman Prodhan of Sonali Bank (UK) last November and Conor Foley of spread-betting firm Worldspreads in 2020—such actions have typically been as a result of professional failings rather than for personal conduct.
Nonetheless, CEOs being fined or banned by regulators is still very rare in the United Kingdom, especially at large companies. A recent notable exception is Richard Howson, the former CEO of collapsed construction firm Carillion, who was handed an eight-year ban from being a director in October.
In most cases, when disaster strikes, CEOs and other executives simply move from one job to another. This is thanks in part to a historically shallow pool of experienced talent, as well as a lack of diversity that has enabled fired executives to be quickly rehired.
It is probably fair to say corporate punishment for CEO misbehavior is inconsistent, too, and the jury is out whether companies impose sanctions to genuinely chastise bosses or to protect their own reputations.
When CEO sackings for poor conduct do occur, they usually relate to questionable financial practices. For other abuses, dismissal is extremely rare: CEOs are usually stripped of bonus awards, while codes of conduct and remuneration policies are rewritten.
Barclays determined Staley should forfeit £17.8 million (U.S. $22 million) in past bonuses and compensation awards following the FCA’s decision.
There is also a disconnect about the speed at which such action is taken, especially if the behavior may be classed as “questionable” rather than “criminal.” Staley was banned nearly two years after he resigned, which was more than two years after he approved a letter from Barclays to the FCA containing the alleged misleading statements about his relationship with Epstein. Compare that to the likely fate of an ordinary employee who lied about his or her relationship with a high-profile convicted sex offender.
The issue of management accountability was also in the spotlight in the United Kingdom following the August conviction of Lucy Letby, a former hospital nurse who killed seven babies in her care and attempted to kill at least six others.
During the trial, it emerged hospital managers—who are not regulated, nor need to belong to any professional body—failed to react appropriately after doctors—who are regulated—flagged serious concerns about Letby’s conduct and the fact she was a common link to multiple infant deaths. Instead of investigating further, managers forced the doctors to apologize.
At least one of the hospital managers involved went on to work elsewhere in the National Health Service.
Unsurprisingly, there has been a call to ensure greater and more direct management accountability in the U.K.’s hospital sector. But why stop there? It is clear people in senior corporate leadership positions need to be more directly held accountable for the actions they take or fail to take.