Poor old Diamond Bob – a martyr to Barclays’ brand values

June 28, 2012

BarclaysA lot of people are accusing Barclays Bank and its chief executive Bob Diamond of racketeering. Acting like white-collar gangsters, in other words. They say the bank and its principal directors colluded in serial distortion of the interbank rate, Libor. What this means in plain English is that they beggared us – the saps who are their customers – with artificially inflated interest rates on loans and mortgages  – in order to enrich first themselves, through bigger bonuses, and then their shareholders, through bigger dividends. Barclays has been fined a total of £290m by the regulatory authorities on both sides of the Atlantic. But it’s the thin edge of a very thick financial wedge. Once the lawyers get weaving on behalf of aggrieved customers, who knows where the liability will end up?

Martin Taylor, a former Barclays CEO himself, summed it up best on this morning’s Today Programme. He said that Barclays had engaged in “systematic dishonesty” between the years 2005 and 2009. While he didn’t explicitly link Diamond – who then happened to be head of BarCap, the division most closely tied to the scandal – with the gigantic swindle, he did say that chief executives set the cultural tone of the businesses they run. Implication: Diamond should retire to the discreetest room in his penthouse suite and make good use of a service revolver. Diamond – Taylor implied – may, or may not, have colluded in such corrupt dealing practices; but because they happened on his watch, he was at very least grossly negligent.

Now I know what I’m about to say isn’t going to be popular, but I’ll say it all the same. Was Bob so very wrong in what he did – or rather, for the sake of any legal eagles looking in – er, what he didn’t do? I mean, at least Barclays Bank co-operated with the investigative authorities, whereas other banks did not. Barclays is paying the price of being first to fess up: a media Exocet amidships.

Then again, the bank took not a penny of public money in the wake of the Lehman Bros collapse. All right, it was pretty stupid to allow such an unredacted and inculpatory email trail to get into the hands of the regulators. But at least you won’t hear any trading floor intercepts along the following lines: “Dude, thanks a billion in Treasury credits. I owe you big time. But not as much as I owe the taxpayer. Come over after work and let’s break open the Bollie.”

I’m not sure the same will be said of RBS and Lloyds. Both were big recipients of taxpayers’ bail-outs, and both – along with HSBC, Citigroup, JP Morgan, UBS, Deutsche Bank and others I probably don’t even know of yet – are, so it seems, up to their gills in interest-rate-rigging mire too. Poor old RBS. Talk about reputational damage: it’s not only guilty of systemic incompetence with customers’ direct debits, but of “systematic dishonesty” in charging them higher interest rates as well. Will this publicly-owned company owned by the public ever recover?

But I digress. Bob’s is the head that everyone wants to stick on a pike over Tower Gate. That’s because everything about Bob is Big and Boastful. Biggest salary, biggest bonus, biggest ego. He is, in short, the archetypal arrogant, swaggering, fat cat.

And as such, he has been entirely consistent with Barclays brand values over the years. Do you not remember Barclays brand ambassador Anthony Hopkins telling us how, if you weren’t big, you were nothing in banking circles? You don’t, do you? So, here as an aide-memoire is a superbly-crafted ad by Leagas Delaney, dating from 2000:

Sometimes, you see, advertising really can convey complex, uncomfortable, inner truths – without the client even noticing. Bob did, of course. He’s been a part of Barclays’ cultural furniture since 1996. He took the message very seriously indeed and acted out the part. What a brand martyr the man is!


Bell Pottinger buyout proceeds – despite veto from top Chime shareholder WPP

March 8, 2012

Summing up a satisfactory set of annual results, which had seen Chime pre-tax-profits climb 16%, chairman Lord Bell concluded: “The group is well positioned for the future with a very positive year ahead for sports marketing in particular.”

But not with me on board, he might have added sotto voce, and not with my deputy Piers Pottinger either. Nor, come to think of it, quite a few others in Chime’s PR division.

Bizarrely, despite the naked glare of publicity and overt hostility from Chime’s biggest shareholder WPP, Bell is forging ahead with his buyout proposals, which I flagged earlier.

On that subject, more specific information has come to light. Bell and Pottinger are planning to take with them the whole of Bell Pottinger, including public affairs, Sans Frontières (transborder reputational issues) and Pelham BP (financial and corporate), of which Chime owns 60%. What triggered the talks is the prospect of losing the remaining US government business at BP, which would cause a profit plunge in the Chime PR division as a whole.

Both sides at the negotiating table are rather hoping that Stakhanovite growth in sports marketing will paper over any divisions and, more to the point perhaps, make Chime’s necessary “repositioning” after a Bell buyout more palatable to shareholders. At the moment, PR is the biggest element in the group’s operations – accounting for 44% of its revenue. But it is already on a downward trend: operating income slid 7% to £69.2m in 2011. Sports marketing, on the other hand – accounting for 25% of total revenues – soared 64% to £83m. And with a number of acquisitions under the belt in such places as Brazil, that makes Chime look well set for the World Cup in 2014 and the 2016 Rio Olympics.

When and if buyout negotiations are finalised, Chime senior non-executive director Rodger Hughes is expected to sound out Fidelity (7% shareholder) and possibly JP Morgan (7%) about the proposals. How Chime will square WPP (nearly 18%) remains to be seen.

Here’s what WPP chief executive Sir Martin Sorrell recently had to say on the matter:

“I think it sets a terrible precedent. It isn’t logical, and if you start to dismember the management of it [Chime], where does that begin and where does that end? As an investor in the company, one would rather it stayed together than split asunder.”

I await the outcome with interest.


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