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Business and Society 9th Edition by Archie Carroll,Ann Buchholtz
Edition 9ISBN: 978-1285734293Business and Society 9th Edition by Archie Carroll,Ann Buchholtz
Edition 9ISBN: 978-1285734293 Exercise 8
Sign the New Ethics Code or Quit
Barclay's PLC, the major U.K. bank, was fined £290 million by regulators in the United Kingdom and United States after it was found guilty of manipulating the interbank lending rate LIBOR. In August 2012, a new CEO, Anthony Jenkins, took over after his predecessor Bob Diamond resigned in the wake of the allegations and fines.
As an early order of business, Jenkins decided it was time to change the ethics culture of the bank and to improve the bank's ethics. Jenkins sent a memo to the bank's 140,000 employees informing them that from now on employee performance would be evaluated on a set of ethical standards. The new standards would be part of the bank's code of conduct, and it would be built around five key values: respect, integrity, service, excellence, and stewardship. Jenkins said, "We must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values."
Jenkins has said that the bank's culture has been "too short-term focused, too aggressive, and on occasions too self-serving." Some of the changes introduced included the following: alter the reward structure so that it upholds the company's values; issue a new code of conduct that all employees are expected to sign; create a new "head of compliance" role to help redesign the bank's compensation policies.
Jenkins' message to those who don't desire to make the changes is simple-Barclay's is not the place for you-the rules have changed and you will no longer feel comfortable at Barclay's, and we will not be comfortable with you as our colleagues.
1. What is your evaluation of Jenkin's proposed approach to changing the ethics culture at Barclays?
2. Can an ethics culture change of the magnitude desired be kicked off by a memo? What else is necessary and why?
3. Is a threat of discharge the best way to frame a desire for new, ethical values? How would you recommend the bank take on such a gargantuan ethics program?
Barclay's PLC, the major U.K. bank, was fined £290 million by regulators in the United Kingdom and United States after it was found guilty of manipulating the interbank lending rate LIBOR. In August 2012, a new CEO, Anthony Jenkins, took over after his predecessor Bob Diamond resigned in the wake of the allegations and fines.
As an early order of business, Jenkins decided it was time to change the ethics culture of the bank and to improve the bank's ethics. Jenkins sent a memo to the bank's 140,000 employees informing them that from now on employee performance would be evaluated on a set of ethical standards. The new standards would be part of the bank's code of conduct, and it would be built around five key values: respect, integrity, service, excellence, and stewardship. Jenkins said, "We must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values."
Jenkins has said that the bank's culture has been "too short-term focused, too aggressive, and on occasions too self-serving." Some of the changes introduced included the following: alter the reward structure so that it upholds the company's values; issue a new code of conduct that all employees are expected to sign; create a new "head of compliance" role to help redesign the bank's compensation policies.
Jenkins' message to those who don't desire to make the changes is simple-Barclay's is not the place for you-the rules have changed and you will no longer feel comfortable at Barclay's, and we will not be comfortable with you as our colleagues.
1. What is your evaluation of Jenkin's proposed approach to changing the ethics culture at Barclays?
2. Can an ethics culture change of the magnitude desired be kicked off by a memo? What else is necessary and why?
3. Is a threat of discharge the best way to frame a desire for new, ethical values? How would you recommend the bank take on such a gargantuan ethics program?
Explanation
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1.
In this article, the new company exec...
Business and Society 9th Edition by Archie Carroll,Ann Buchholtz
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