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Reputability LLP are thought leaders in the field of reputational risk and its root causes, behavioural risk and organisational risk. Our book 'Rethinking Reputational Risk' received excellent reviews: see www.rethinkingreputationalrisk.com. Anthony Fitzsimmons, one of its authors, is an authority and accomplished speaker on reputational risks and their drivers. Reputability helps business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Tuesday, 10 July 2012

Lessons from Barclays

According to Grant Woods, an FT letter-writer:
"The culture at Barclays, [in 2006/7 when he worked there] discouraged staff from raising concerns; in some instances, their loyalty and commitment were questioned, should they do so. There was also the unsaid threat that it could adversely affect any potential bonus or, worse, undermine their job security."
This describes a classic example of incentives, both cultural and financial, blocking the flow of important information to the top.  Underlying it is a failure of leadership on ethos and culture.  Incentives and failures like these are almost impossible for boards to uncover without outside help - the more so in large complex organisations. 

This single letter illustrates four of the seven key risks highlighted in 'Roads to Ruin' as a major cause of destruction of apparently solid businesses.  And it left NEDs without key infomation they needed to be able to supervise the business effectively.

No-one can make good decisions based on information fit for garbage.  Garbage in, garbage out applies as much in the best boardrooms as it does to computers.   Making decisions while living in a rose-tinted bubble is dangerous.

Anthony Fitzsimmons
Reputability, London
www.reputability.co.uk

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