The Leadership of Bob Diamond at Barclays Bank
MBA Leadership Module final essay.
The former CEO of Barclays Bank Bob Diamond was recently elected as one of the top ten ‘worst business leaders’ in 2012 by several respected international polls. However, Diamond had been an extraordinarily good leader over the years and had many business successes. He started out as a teacher at the University of Connecticut in 1976. (Heffernan, 2012). He quickly rose to being the managing director of the school’s fixed income trading department. In 1992 he joined CS Boston and was the CEO as he dealt with all their exchange issues. He was working globally and met with enormous success. He joined Barclays in 1996 and in a year he was on the Executive Committee. (Heffernan, 2012). As Barclays is the second largest banking group in Britain, his achievement was significant, and soon he was their chief executive of Corporate and Investment Banking, handling accounts for the wealthiest people in the world. Barclays was already having serious issues with matters concerning the ‘LIBOR scandal’, which we now know was the end product of some of Diamond’s employees manipulating the London Interbank Offered Rate. (Heffernan, 2012). Marcus Agius, the Chairman, had already resigned as a result of the large fines that the Bank had had levied on them, as a result of LIBOR Diamond resigned immediately after.
Diamond had already been criticised for his outrageously high pay with the bank and his persona, which often was less than modest. Many held him responsible for the bank’s manipulations and had been seen as a poor and manipulative leader by the press as far back as 2010. His salary was as high as £63 million and with bonuses he was the highest paid banking CEO in Britain. (Heffernan, 2012). The concept of ‘power’ is useful for understanding how people are able to influence each other in organisations (Mintzberg, 1983; Pfeffer, 1981, 1992).
Regardless of Diamond’s salary, the questions of his leadership abilities remain to be analysed. How much he knew about the cover up and manipulation of funds will be examined in this study. Whether he could have acted differently will also be examined. The type of leadership qualities Barclays employed will be taken into consideration and how they work or did not work in a global economy under the lenses of change theory and culture theory will be considered. Diamond made mistakes that were controllable and some that were a part of what culture has brought into a globalised economy. How Diamond performed as a leader is complex and holds lessons for future leaders as it is examined under leadership theories and the culture of globalisation and banking in which he tried to function. Diamond’s Characteristics that drove his Career Forward
Diamond was interrogated by Parliament who selected a committee to question him about the problems at Barclays. The CEO claimed he did not know about the “rigging of the interbank lending rates” that supposedly involved fourteen traders in the bank. (McGregor, 2012) Parliament did not go easy on Diamond and wanted him to answer the question as to what kind of organisation he felt he was running. Barclays did not vacillate in stating that he did not know anything about the issues, which were found to have been taking place over a period of five years.
If Diamond had no idea what was going on in his company the question remains as to whether he was lying or if he was a competent enough leader to be running Barclays at the level he was in the first place. Diamond had sent an office memo to the employees the day before he resigned stating that he would stand by the financial institution and they would make it through the situation together with him at the helm. (McGregor, 2012) The next day he...