Five years after the banking meltdown


Banks have traditionally been led in a sober and boring style. They were often accused of being excessively bureaucratic. In the run-up to the financial crisis, an aggressive strain of transformational leadership took over many of the banks. Senior executives often presented themselves as self-styled supermen who were on a mission to transform sleepy institutions into global players. This often came with a large dose of hubris. The result were leaders who took significant risks and often would ignore or even punish those who disagreed with them. Following the crisis most of the banks have replaced their top leadership. Charismatic heroes are out. There has been an increasing accent on a more staid and ‘authentic’ style of leadership. Many chief executives now come from retail banking backgrounds rather than investment banking. Grade: A –

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Traditionally the banking fraternity in London had been largely the preserve of a small public school educated elite. Following the ‘big bang’ of 1986, the financial markets rapidly expanded and the financial workforce in London exploded. This new breed of financier were much more diverse – more international, more women and more people from a non-public school educated background. However, particular sectors of the workforce remained quite homogeneous. Following the financial crisis, there is a recognition of the need to make the financial workforces less homogeneous, and in particular masculine. This has led many banks to put additional effort into their programmes around social mobility and gender equality. It is early days, but the banks do remain largely male dominated. Grade: B


Traditionally, UK banks had conservative organisational cultures. In the 1980s this began to change as an entrepreneurial culture took hold. The result was that the guardians of our money became risk hungry sales people. Making a deal with little concern for the longer term consequences was aggressively encouraged at all levels of the banks. Following the financial crisis, some attempts are being made to change the culture within the banks. There is a renewed emphasis on social responsibility. Being careful about risks is also becoming important. Despite what many chief executives say, the culture of extreme entrepreneurialism remains well rooted among many employees in parts of the UK banks. Changing this will take some time. Grade: C +