A joke in banking used to be that ethics was a place you might live before you made serious money. That's not a laughing matter at Barclays anymore. After the scandal of the bank's role in the rigging of the London inter-bank interest rate (Libor) and the controversy around bonuses paid to bankers including former chief executive Bob Diamond, his replacement Antony Jenkins set out his stall in a memo in January.
Criticising the banking of the past two decades as too aggressive, focused on short-term goals and disconnected from the needs of customers, clients and society, he said Barclays can only be a valuable business if it is a values-driven business.
Launching Transform, a programme to turn Barclays into an ethical organisation, he delivered a message to any of the bank's 150,000 employees who cannot buy into the link being created between its purpose and values and its business performance.
'My message to those people is simple,' he wrote. 'Barclays is not the place for you. The rules have changed. You won't feel comfortable at Barclays and, to be frank, we won't feel comfortable with you as colleagues.'
Bankers getting fired for being unreformed capitalists is a spectre likely to put fear into thousands of financiers. However, Jenkins stated: 'Having a firm commitment throughout the business to strong values is not something I want to do for public relations or political benefit. It's not window dressing. It is simply how I will run Barclays and make it a more valuable and sustainable organisation.'
It's quite a declaration. Transform involves a 'Made by Barclays' film, a single cross-business 'Purpose for Barclays' and the creation of the five core values of respect, integrity, service, excellence and stewardship.
The purpose is stated as 'helping people achieve their ambitions - in the right way'. However, explaining all this to a sceptical public will be a major challenge.
Success is difficult
'Culture change was very popular ten or 15 years ago but the number of recorded cases where it was successful are few and far between,' says Jim Barker, director of Oxford-based Propagate Consulting
'It's rather like trying to nail a jelly to a wall. It's incredibly difficult. It's easy to pronounce on these things but much harder to make something live within an organisation, especially one of the size, complexity and history of Barclays.'
Other communicators are equally dubious. 'It can be done but it's not going to come by changing the brand values,' says Nick Parker, creative director at language consultancy The Writer
. 'If you're going to change the ethics of an organisation, you have to change the way you behave. It's about the things you do and the things you start doing and stop doing. You have to get that living and breathing across the whole organisation. Values and language can help you do that but it's all about action.
'If someone says to you I'm very ethical, you're not going to believe them; you're going to ask them what they do. That has to come first.'
For companies, which after all exist to produce returns for investors, to become ethical organisations, is a hefty challenge. But some companies are already on transformative journeys.
Earlier this month, the sustainability think tank Tomorrow's Company
hosted A Journey of Culture Change
, a lecture from BAE Systems
chairman Dick Olver explaining changes in the defence group since the Serious Fraud Office and US Department of Justice investigations into allegations of contract bribery.
Companies are changing
Tomorrow's Company chief executive Tony Manwaring also cites improvements at BP
, a change of emphasis at accountants PriceWaterhouseCoopers
under senior partner Ian Powell and work HSBC
has done in linking together purpose, performance, appraisal, reward mechanisms and business strategy under the theme of 'courageous integrity'.
Meanwhile, India's Tata Group
has a commitment to a code of conduct, policed by an ethics officer who conducts reviews of incidents judged not to follow that code.
So how do organisations go about becoming ethical? Charlotte Lambkin, group communications director at BAE Systems, said the defence company had a five-point plan. This involved working on BAE System's board structure, creating the right group of between 50 and 150 senior executives, generating an objective understanding of its culture and how that needed to change, embedding a new culture across the business and applying the company's values to forge new relationships with external stakeholders.
BAE Systems commissioned former Lord Chief Justice of England and Wales, Lord Woolf of Barnes, to carry out an independent fact-based account of the group's ethical business conduct worldwide.
The Woolf Report was published, and all 23 recommendations acted upon. Transparency International, an independent civil society organisation campaigning against corruption, now ranks BAE Systems as fourth out of 129 companies in its defence industry anti-corruption index.
'We've undergone a fundamental metamorphosis that goes well beyond our products, services and revenue mix,' says Lambkin. 'It's in the underlying culture and values of our business and our people, everywhere we operate and in everything we do.
'We regret and accept full responsibility for the past shortcomings that the authorities investigated. But they were springing from a time when we were a very different business than we are today. No-one can change the past but what we believe we've done is build a better future.'
When Paul Polman became chief executive at Unilever
in 2009, he concluded that climate change, the empowerment of consumers by social media and threats to sustainability posed by food, water and energy meant the company's future as a viable business was at risk unless it underwent culture change.
Global media relations director Trevor Gorin says Polman examined Unilever's original core ethics of doing well by doing good ethos. 'You could say we didn't do that well sometimes to be honest,' he says. 'But Paul wanted to set it as the way we do business, as opposed to a nice thing that happens as a consequence of doing business.
Polman withdrew annual guidance for shareholders and announced that he would run the business for consumers, rather than slavishly for shareholders. High-profile stances followed on food security, nutrition, innovation and water use. Unilever also made commitments to improve its supplier relationships and to engage better with customers.
Gorin adds: 'You need to go back to your original purpose. Maybe it's those people who see themselves as not being wellserved by banks that have got to be brought back into the centre of the banking equation. Trust has been lost and you need to create some sort of differential. Maybe you can have a style of a particular way of doing business driven around ethical banking. But it has to be part of a genuine set of beliefs.
'If your raison d'etre as a bank is to make money and make shareholders wealthy then that's fine, except that, when you put that up against the expectations of society now, you're going to find yourself out of business quite quickly because people won't buy into your brand.
'Anything that doesn't have a commitment to society in the way that it operates, either locally or globally, is going to really struggle.'
Barker believes Barclays' senior managers need to go through a 'deeply personal journey' of looking at what has gone wrong ethically in the organisation and where they have been culpable. 'Unless you're able to face up to that, it becomes even more challenging because the problem then always lies elsewhere and is up to someone else to shift,' he says. 'Senior management need to take ownership in terms of what's gone wrong and I don't know how they're going to do that.
'It's a very, very long process. You might set out a plan to change the ethics in three years but actually you need to think much longer-term in terms of what you're doing and how you're measuring the change. What will Barclays consider to be success? It needs to discern what those things are and then report on them. Unless it publishes stuff that it has measured and accounted for, I'm very cynical about whether it'll be able to achieve anything.'
It promises to be a rough ride but Manwaring, who has had a 'brief chat' with Jenkins and plans further dialogue, believes the bank's plan to become an ethical organisation is 'tough but possible'.
He says: 'From the conversations I've had, I think they do have a real understanding of what they've taken on. If there's a caveat, it's that they're bound to discover things that they haven't yet fully recognised.
'There will be all sorts of points of challenge where they are tested and will have to make business judgments about what really will generate value for the long-term. There will always be people who will give lip service to making the change but won't be able to change or don't wish to change their behaviours. They're going to have to call that, work it through and potentially leave some people at the station.'