Barclays Bank: Business Environment Report and Corporate Governance

This report provides an analysis of Barclays Bank's business environment, focusing on its operations, corporate governance, and the impact of the 2008 global financial crisis. The report begins with an overview of Barclays Bank, tracing its history and evolution as a major financial service provider. It then delves into the bank's business divisions, including Barclays UK and Barclays International, highlighting their strategies and operational structures. The report explores the application of corporate governance principles, including the OECD principles, to enhance shareholder and employee confidence, especially after the 2007 financial crisis. It discusses the rights of shareholders, equal treatment, and the role of stakeholders in corporate governance. The report also addresses issues of negligence and liability, including corporate negligence and vicarious liability, providing examples of how these concepts apply to Barclays Bank. The conclusion emphasizes the importance of corporate governance in overcoming the negative impacts of economic downturns and maintaining investor confidence.

BUSINESS
ENVIRONMENT

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Overview of Barclays Bank:.......................................................................................................1
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................5
CONCLUSION................................................................................................................................6

EXECUTIVE SUMMARY
Recession is the main constraints for economic growth and this is the main reason that is
why firms' needs to introduce those tools that can overcome negative effects. This is the report
which is based on the Barkley bank which ultimately have their operations in the field of
rendering banking services so effectively (Bos‐Brouwers, 2010).
INTRODUCTION
In the year of 2008-2009, American government refused to step in to protect Lehmen
brother's bank. After that so many banks went under due to its impacts. That is the reason, the
recession occurs. This is genuinely occurred due to the deregulation of regulatory bodies. Before
1970, investment banks, insurance companies operates in their own specialised trading spheres.
As far as banks concerns, there were a strict regulations on the capital and cash quantitative
relation and more importantly, on what percent of depositors' funds could be season out to
consumer. It control or regulations were unstrained and state enabled these diverse business
finance organization to gather finance from the capital trades through out of global and not alone
in the investor, services provider of finance can grow so fast than previously done. In United
Kingdom, the Bradford & Bingley Structure Society was successfully nationalise in the end of
2008 and after that halfway sold to the Spanish Grupo Santander Bank.
TASK 1
Overview of Barclays Bank:
Barclay started its business in 1690 at the time when John Freame as well as Thomas
Gould started merchandising as a bankers of goldsmith. And in 1736, Mr. James Barclays gave
the name of the company. Since then, Barclays has been a leader in innovation. Now, this
becomes the major universal financial service provider provides that trade in banking of retail,
corporate & investment banking, credit cards and also in management of wealth. It shifted to
lend, invest and saves money for 48 million customers and clients throughout the globe. In
addition to this, Barclays has ever concentrates on the serving needs of its customers.
Banking business Overview: Business owner renders clients coverage throughout the
United Kingdom at each stage of its cycle of organisation in each industry, rendering distributing
models that combines customers guest requirement as well as sophistication. Barclay Bank offers
consumer via link on grounds of model of digitally-driven, merging an on-based on as well as
1

direct connection-ship model with antique modified solution such as digital technology. An
amount of inventions in 2016, were introduced, covering fast online lending, and plus on-
demand, cash pick up as well as on mobile. Barclay is the only United Kingdom bank which
serves such services.
Barclays operated it operations into two main defined businesses. These are: Barclays
United Kingdom as well as Barclays International. These divisions would be corroborated
through the Group Service Organisation, that houses the absolute majority of its operations and
main office of operating as well covering operations & technique. Company's plan is to
concentrate on their capability like the transatlantic customer, corporate as well as investment
bank. The group would work as backbone in both of two financial centres of global, London &
New York (Charter, 2017).
Barclays PLC Group system is to expand their working quality like a transatlantic buyer,
firm & venture bank, secured in its two homes trades of United Kingdom as well as US, with
worldwide range. Firm two unmistakably characterized divisions, Barclays International and,
Barclays UK give broadening through line of business, geology as well as client, improving
budgetary versatility and adding to the conveyance of predictable returns by the cycle of
business. Bank have solid center business with energizing belief, very much situated to convey
longer period an incentive in regard of firm investors. Predictable with the goal of conveying
long term reasonable esteem for every one of our partners, we have built up our Shared Growth
Ambition – Barclays to deal with citizenship and the supportability of the business demonstrate
firm's manager work. The point is to settle on choices and work together that gives Barclays
Bank clients, or groups that it function, with approach to a effective and more prosperous time in
future. Conveyance of cited bank procedure is supported by the vitality, duty what's more,
energy of our kin, and we are sure about our basic reason: to enable individuals to accomplish
their aspirations, in the correct way. firm common values advise the way it works and how it
acts, directing the decisions Barclays make each day.
 Barclays UK: It is the individual & official franchise of banking along with true scale,
frame around our customers' requirements along with at its core. This covers United
Kingdom retail operations of banking, its UK user business of credit cards, our United
Kingdom based offering of wealth, and also the banking at corporate with tiny traffics.
With 24 million clients at retail approximately, as well as around business of million
2

banking consumers, Barclays is the UK based pre-eminent financial organisation that
render services.
 Barclays International: This is global brand which have diversified transatlantic
operations, covers of most measurable Banking of corporate firms, that is trade-lending
in United Kingdom and have effective global opportunities of growth, Higher their Bank
investment, Barclaycard: their mostly gainful & emerging firm external areas of UK, firm
capability of leading via both Barclaycard as well as Banking and its overseas services &
private bank . This has measure in sweeping banking as well as lending of consumer,
opportunities in the important in their major trades, strong development potential, or
effective their revenue streams balance, offering upcoming resilience as well as
diversification (CHUANG and Liao, 2010).
Barclays methodology is to concentrate on its quality as a transoceanic purchaser,
corporate and venture save money with worldwide range. Barclays announced in 2006, March
that the organisation would be sorted out within two plainly characterized dissension, Barclays
United Kingdom as well as Barclays International. Both of companies will be coordinated
through a Group Service enterprise, that houses greater part of Functions of Barclays' Group,
including Operations as well as Technology. It has empowered Barclays to quicken their
methodology & improve Group and in addition setting us up for ring-fencing prerequisites,
which become effective on first January, 2019. It has negative quick effect on consumer or
customers, the company will interact their clients as well as customers in great period of time in
the event that they are influenced.
TASK 2
Due to Global financial crises in 2007 affects the ability of Barclays to consider their
shareholders and employees. This will reduces their image and ability to grow in market. For this
purpose they have to adopt corporate governance and their principles to build the confidence of
shareholders and employees and make long term relationship.
The main aim of Barclays bank behind the adoption of corporate governance is to work
for the society whole. Corporate governance principles helps to maintain confidence of investors
both foreign and domestic and attract long term capital which helps the bank to overcome from
the effect of global financial crises and grow in baking industry.
3

Corporate governance is whole system which includes rules and practices by which the
activities of Barclays bank are directed and controlled. This includes the process of balancing the
interest of stakeholders, shareholders, management, customers, suppliers, financiers, government
etc. This provides the opportunity to management of Barclays bank to achieve their targets and
action plans. For this purpose different principles of corporate governance are adopt by the
management of bank to attain the confidence of investors, shareholders and employees. OECD
principles which are adopt by Barclays bank are defined below:
 Effective corporate governance framework: This includes about that transparent and
efficient markets and have constant rules of law and properly define the duties and
responsibilities to supervisory, regulatory and enforcement authorities (Drucker, 2017).
 Rights of shareholders: This principle protect the right of shareholders and provides
power to use their rights. These rights helps the management of Barclays bank attain the
confidence of their shareholders. The basic shareholders rights are described below:
- participate and vote in shareholders meeting
- Share in profits as per their holding
- Right to elect and remove member of board
 Equal treatment with shareholders: To attain the confidence of their share holders this
corporate governance principle helps the management of Barclays bank. This principles
includes about equal treatment of all the shareholders whether minority and foreign
shareholders. All the shareholders have equal opportunities regarding redressal for the
violation of their rights by the management of bank. This principle also includes the
following points:
- Same class of shareholders are treated equally
- Insider trading is prohibited
 Role of stakeholder in corporate governance: There is huge role of all stake holders in
maintenance of corporate governance in Barclays bank. They have to consider the rights
of all stake holders and encourage their participation in creation of wealth, jobs and
financial sound bank.
 Disclosure and transparency: This includes about the management of bank has to adopt
the policies of disclosure and transparency. First it includes about the duty of the
management of bank about timely disclosure of important matters regarding financial
4

situation, ownership and governance. This helps the management to create transparency
in their operations which build the confidence of employees and investors (Du,
Bhattacharya and Sen, 2010).
 Responsibilities of Board: This includes about the accountability of board to monitor the
operation of management of bank and their responsibility towards the company and
shareholders. This helps the board to build their confidence towards the operations of
bank.
TASK 3
Negligence is a principal of civil tort where a victim alleges that an accused breached a
accountable of care which caused harm. The main simple kind of negligence cases covers
lawsuits against individuals due to motor vehicle accidents or medical malpractice claims.
Although, firms might likewise be held responsible for negligent decisions in a civil lawsuit. A
common scenario is the one where a negligence claim is introduced against Barclays Bank is
when its shareholders sue for claiming the firm engagement in actions which harms the value of
the firm's stock. At the time of 2008 global financial crisis, Federal Bank of America failed to
disclose whole important information about the acquisition during divers shareholders voted on
the firm deal and that these kinds of actions cost over $15billion dollars. However, there are few
other negligence which are also there.
Corporate Neglect
All together for an organization to be discovered at risk for carelessness, an offended party must
exhibit that the organization broke an obligation that it owed and that such demonstrations or
exclusions caused hurt. For instance, a charge card organization that unintentionally discharged
secret budgetary data of its clients in this manner causing hazard for wholesale fraud might be
discovered careless.
Vicarious Liability:
A parent partnership may discovered at risk for the carelessness of its backup organizations
regardless of whether the parent organization did not partake in any wrongful demonstrations.
This vicarious risk might be set up if an offended party shows the parent organization had a
commitment to manage the activities of its backup, or if the two segments worked adequately
close in order to be regarded one association.
5

On the other hand, this is observed that carelessness is the thing which defines that not to
provides attention to the shareholders and also employees of the business. However, this is stated
that sometimes an individual's behaviour is reckless which becomes the basis for a lawsuit or
criminal prosecution. If someone acts with such utter disregard for the safety of others and
knows which his actions might cause damage to someone else, in that case, company is liable for
damages which are caused by his recklessness. There are four main basic theories of liabilities
that are based on the kind of lawsuits, which could renders a defendant accountable for injuries
he or she causes.
1. Intent: This means the person who acted with intent to cause harm.
2. Recklessness: This refers to the person who knew that his or her action were most
probably to cause harm (Hallin, Holm and Sharma, 2011).
3. Negligence: This means that the person acted in violation of responsibility to someone
else, with the breach of that duty causing harm to someone else.
4. Strict liability: This is reserved for most particular situations where someone could be
accountable for harms they cause no matter what their mental state was.
This recklessness covers conduct which is short of real intent to cause harm, but higher
than simple negligence unlike negligence- which occurs when an individual unintentionally takes
a risk which they must aware of recklessness means to intentionally take a risk or hazards.
State laws restrict numerous rash practices and view heedless on reckless characters as social
perils since they bet with other individuals' security. A man who has been harmed from a
common claim of carelessness of another may recoup remuneration for any subsequent
therapeutic costs, lost wages, recovery, torment, and enduring. What's more, neglectfulness may
likewise permit recuperation from specific individuals who are regularly resistant from risk for
simple carelessness, for example, government labourers and medicinal services experts
(Nadkarni and Herrmann, 2010)..
CONCLUSION
From the above mentioned report, this has been observed that the Barclays used certain
tools that is used by the firm in order to make clear that recessions in 2008-2009 impacts the firm
performance badly which is used by the firm. Under this report, OECD principles on the
6

corporate governance are elaborated for knowing the code of practices which are applicable on
the Barclays Bank. Under this report, OECD principles on the corporate governance are
elaborated for knowing the code of practices which are applicable on the Barclays Bank. Under
this report, impacts on the corporate governance with focus on its principles which have been
told by the OECD principles.
7

REFERENCES
Books and Journals
8

Online:
Business Environment. 2017[Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
9