Here’s my strategic review, Barclays: see shareholders right and the rest will follow

Antony Jenkins, the new-broom chief executive of Barclays, has the tone of a junior minister, not long in parliament, who finds himself promoted to high office after the big beast who preceded him was toppled by scandal. In fact he’s been in the bank 30 years, climbing the ladder so quietly that none of my contemporaries there (I coincided with him in Barclays for a decade) ever mentioned him as a man to watch before he was picked to follow Bob Diamond. His ‘strategic review’ is full of hot-button stuff about ‘values’, but what struck me about his interview on the Today programme on Tuesday morning was that in his carefully scripted answer to a question about breaking away from the Diamond legacy, he referred to ‘improving returns and dividends to shareholders’ before he recited his mantra about caring for customers and ‘delivering for broader society’.

Evan Davis tried to suggest conflict between those aspirations, but Jenkins rightly corrected him: it really doesn’t have to be that way. No major British bank has been run in the interest of shareholders for the past decade, not since Lloyds in the era of Sir Brian Pitman and Sir Peter Ellwood (readers may recall Neil Collins’s lament for the ‘Ellwood Memorial Dividend’, which lingered until the catastrophic merger with HBOS in 2008). Instead they were run in the boom years in the interest of enriching executives while making them look -ballsier than their competitors; and in the bust years, shareholders barely saw any returns at all, dividends having been bracketed with bonuses by the Governor of the Bank of England as rewards that must be foregone for the greater good. Yet most of the bonuses continued, while the dividends didn’t.

Back to first principles: a bank — or any public company — that has long-term shareholder value as its aim nurtures customer relationships, manages risk and reputation acutely, never lets managers run out of control and tests products exhaustively (for horsemeat or financial hogwash) before launching them on consumers.