‘My dad once said that the only time he’d ever heard me say “never” was when I was asked if I’d had enough,’ Bob Diamond told me in 2009. You might guess, given the nine-digit fortune he scooped from Barclays during a 16-year tenure which ended on Tuesday morning, that what he could never get enough of was cash in his own deposit account. But actually he was talking about the pressure of steering Barclays through market storms in the face of relentless personalised hostility: ‘I love the challenge, Martin, I love the business.’
I believed him and, as I’ve written before, I admired him for it. Diamond was the most formidable trading-floor chief of his generation in London. From unpromising beginnings he built a hugely successful investment bank in Barclays Capital and never let it run out of control. He pulled off the deal of the decade at the middle of the banking crisis by picking up the best bits of Lehman Brothers for next to nothing. He was a charismatic leader who always stood up for his boys.
But now he’s gone, it’s time to examine what Bob did to the culture of Barclays — which is, as regular readers may know, my Mastermind special subject: I wrote a book about it called Falling Eagle. My father worked at Barclays for 47 years and as its senior general manager, the 1970s equivalent of chief executive, he was a direct predecessor of Diamond. I worked there myself for a decade, made lifelong friends, and hope one day (if they haven’t damaged the fund as badly as the bank’s reputation) to collect a Barclays pension. So I have never pretended to be objective, but I have always tried to be even-handed. And unlike many reporters on the Barclays story, I actually know what I’m talking about.
What was the culture like in better days? It was not the sleepy sort of bank that employed Mr Mainwaring of Dad’s Army as branch manager at Walmington-on-Sea. It was surprisingly feisty. Senior managers wanted to give the competition a kicking. Lending bankers liked to take big but calculated risks, and went in hard to get the money back when they had to. There were stand-up rows and turf wars, between head office and the provinces, between domestic and international, between old-timers and smartarse youngsters like me. And until 25 years ago there was another source of friction: a class structure providing accelerated promotion for sons of the founding families, which my father, a gifted grammar-school boy, fought but never defeated.
Even so, it set a tone which allowed Barclays people of all ranks to look down on their rivals at classless NatWest as oiks. Stronger than the internal tensions were the collective loyalty and the shared norms: every department and territory had its own design of tie, but all included the Barclays eagle and everyone wore them. If there was a ‘code of conduct’ I never saw it, but I know what it would have said: work hard, do everything by the book, never let the side down, and we’ll look after you for life. ‘It was a funny old place,’ one of my former bosses said recently, ‘but it was a bloody good bank.’
And then along came Bob — or rather, to be fair to him, along came the intake of less able financiers who tried to build an investment bank before he got there. The old Barclays solidarity had already struggled for a decade against the tide of bonus-hunters and job-hoppers that arrived with the Big Bang market reforms of 1986. ‘We want a share of the goodies,’ one of them told me, and no strategic decision could henceforth be taken without reference to the individual payouts it might generate. Colleagues no longer trusted each other, because they barely knew each other: by the time Bob got down to some serious hiring and firing in 1996, the average length of service in the investment bank was less than two years.
The golden sleeve
What did Bob himself bring to the party? It was being so darned competent that made his influence so pervasive — and ultimately corrosive — across the whole banking sector. His confrontational style made him so hard to manage that the board largely let him get on with it, surrounded by his tight-knit crew. When he presented his annual bonus list, topped by his own, the directors acquiesced, muttering to each other that it was only what Wall Street would pay to poach him, after all, and that investors weren’t complaining. If he was unloved by many of his underlings (one in my hearing compared him to Tony Soprano) he was still their role model, the apotheosis of how powerful, rich and cool it was possible for a trader to be. It was the psychotherapist Lucy Beresford, once a Barclays executive, who told me that when he first arrived, ‘everyone wanted to touch his golden sleeve’.
In the end the bank was remade in Bob’s image, and the rest of the City tried to follow: it was all about the hard sell, the big bucks, the traders’ testosterone — and it bred the Libor-fixing scandal, whether or not Bob’s own fingerprints were all over it. His gentlemanly, old-school chief executive predecessor John Varley, for many years the bank’s last cultural counterbalance, retired at 55 to make a new career in the charity sector. The chairman Marcus Agius never gained much sway over Bob but fell on his sword in a last effort to save him — and nimbly fell off it again when the Bank of England and the FSA whispered in Bob’s ear that enough was enough.
In Falling Eagle I argued that companies like Barclays are not ‘machines for making money’ but more complex, idiosyncratic human organisations, not unlike historic regiments. That parallel came to mind again this week. It was all there: hierarchy, ritual, discipline, esprit de corps, campaign honours, past heroes, everything but the marching band. It bonded people together, taught them how to behave, brought the best out of them. Then mercenaries like Bob arrived and were allowed to take command. Their day must surely now be over, but I’m watching the shaming of Barclays with sadness.
Martin Vander Weyer appears on this week’s Spectator podcast: spectator.co.uk/podcast