Oxymoronic as it sounds, news that Barclays general counsel (GC) Mark Harding is to depart has been received as startling and yet not entirely a surprise. Barclays had been engulfed in a series of escalating controversies in recent years spanning mis-selling, tax advice, and – most damagingly – allegations of rigging institutional interest rates. While there has been no suggestion that Harding or Barclays’ legal team shoulders any blame, incoming chief executive Antony Jenkins has gone out of his way to signal a total break with the culture under predecessor Bob Diamond, who last year stood down as the Libor investigation generated a record fine against the bank.
In such corporate reboots, it’s standard procedure for an incoming chief to clear out the boardroom. If such tactics are the governance equivalent of an exclamation mark, this impression was only reinforced in this instance by Harding’s exit breaking on a Sunday at the same time as Barclays’ finance director confirmed his departure.
And as Legal Business went to press, Jenkins was confirming that 3,700 jobs were to be cut following a strategic review of the business, observing that it would ‘take years before people change their impression of [Barclays]’.
In such a context, with Harding already having been in the role for ten years, it is understandable that he felt that this ‘obvious transition point’, as he put it, was a natural moment to move on.
In such corporate reboots, it’s standard procedure for an incoming chief to clear out the boardroom.
Another aspect of Harding’s departure that is notable is that it appears inherently linked to his very substantial reputation. Aside from being well-regarded as a thoughtful and intelligent operator, his tenure saw Harding become probably the most prominent GC in the UK and a poster boy for the rising calibre and career ambition of in-house counsel. The obvious question now is the extent to which rising up the corporate hierarchy will make GCs more likely to be swept up in the c-suite clear-outs that afflict bluechips from time to time.
Attention is now also focused on who will replace Harding and Barclays faces something of a dilemma. The challenge of managing a 200-strong team for a huge global bank makes it a big ask even for a heavyweight finance partner unless they have a very significant spell in-house on their CV, despite the recent vogue for appointing partners to GC roles.
Of the obvious internal candidates, deputy GC Michael Shaw is ex-Herbert Smith and Judith Shepherd, who heads up the corporate and investment banking arm, was a partner at Gibson, Dunn & Crutcher, though there will be some calls for an outside appointment.
Barclays may want to take a safer route and look to a regulator like the Financial Services Authority (FSA) for its next GC. Rival Lloyds Banking Group made such a choice by hiring Andrew Whittaker as its new GC from the watchdog and others have cited PwC’s recruitment of FSA enforcement chief Margaret Cole as evidence of the current demand for legal heads with a firm grip on the regulatory agenda. And, of course, Barclays has itself only just hired former FSA chief executive Hector Sants to head its beefed-up compliance department. One way or another Barclays looks set to remain a trend-setter for in-house counsel.