A 10 point redemption plan for Bob Diamond

Diamond can down with Barclays, or he can go down as the banker who led the transformation of a troubled but important industry that has lost its way. Here’s how:

1. Talk to us, Bob

In various statements, you have expressed your ‘regret’ over the recent scandal(s) at Barclays and said that the behaviour of those involved did not meet the ‘culture and values’ of the group. But you have not yet appeared on TV, radio or in the press to talk publicly about what has happened. The best defence would be to go on the offensive with the media and hit the airwaves and the TV studios, not unlike what Sir Philip Hampton and Stephen Hester at RBS did earlier this year.

Who knows, people may find that you are human after all, and not the monster sitting on the top floor of Barclays’ headquarters looking down at the little people below and laughing at them while you stroke a large white cat as you have so far been depicted. They may even like you.

2. Sorry seems to be the hardest word

While you are out there, say ‘sorry’. Not an expression of regret, remorse or disappointment, but ‘sorry’. How about: ‘On behalf of Barclays, its clients, shareholders, counterparties and stakeholders, I am very sorry for what we did and I will work tirelessly for as long as the board considers me worthy of the role of chief executive to make amends’. Just reading that out loud probably makes you feel better, no?

3. Sackcloth and ashes

While you and some of your other directors have taken the positive step of foregoing any bonus for this year (although you will still be eligible for a long-term incentive award), it’s really not just about your bonus.

Many people in the banking industry use their bonus as a way of keeping score with their rivals, even if everyone else has stopped counting. But after a long and successful career in the financial markets you have accumulated more money than you will ever know what to do with.

Instead of keeping tabs, how about you agree for the foreseeable future to receive no more than your basic salary (which at £1.35m should be enough to get by), until you, the board and your shareholders are satisfied that you have sorted out the mess that Barclays has got into. That is, after all, what your predecessor Sir John Varley did for several years during the crisis.

It would put you at the bottom of the pay league table of bank CEOs along with Stephen Hester, but it would put you at the top table in terms of the moral high ground.

4. Backdating the cheques

While you are at it, as part of the investigation outlined below, you might accept that some or all of your bonuses from previous years (and those of senior managers with responsibility for the departments that have clearly screwed up and of anyone directly involved) are clawed back. Think how much money this could raise and how much good it could do for a charitable foundation set up by Barclays to, say, alleviate the appalling deprivation within a one mile radius of your headquarters in Canary Wharf.

5. Head on a plate

Someone really has to go, if only as a sacrficial lamb. If you are not going to step down, you could talk with your board about who might fall on their sword. ‘Deputy heads must roll’ usually works in this sort of situation, but probably won’t be enough. A better bet would be your chairman, Marcus Agius. Marcus is intelligent and charming, and in many respects has done an excellent job in leading Barclays through the crisis since he joined in 2007. But as the moral guardian of a company that appears to have lost its moral compass, maybe his number is up. Besides, he has already blown any chance of a knighthood and his many talents could be put to very good use in other fields. You could always ask shareholders to help Barclays select a replacement.

6. Dirty laundry

You received credit from the regulators last week for being the first bank to offer extensive cooperation in the Libor investigation and your earned a discount on the fines as a result. But apparently you are resisting calls for an independent inquiry into what went wrong at Barclays. Of course, it’s not nice to have an outsider come in and pick through your dirty laundry, but it makes it look like you have something to hide. How about you appoint a respected outsider with no links to the Barclays or to the City (Rowan Williams will be available soon) to conduct a full review of your culture, values, processes and behaviour, and publish the results. It might be quite cathartic and could set a trend for other banks to follow. It was for UBS.

7. Get with the programme

This review could aim at producing a concrete plan for rooting out any form of abuse and any breach of the spirit of the rules, not just the letter. It could come up with a meaningful set of values that help reset the culture at Barclays. These new values would put a stronger emphasis on ethics and the social value of what you do at Barclays. They might place other considerations ahead of naked self-interest and profit for the sake of profit, and could be written into employees’ contracts and bonus arrangements. A trader who makes $100m a year for Barclays by ripping out his client’s eyeballs should be fired, not rewarded.

You could then draw up a timetable for what you and your management team are going to change and by when. This won’t happen overnight, but you could commit to resigning in future if you do not meet the targets you set for yourself and the group.

You hold the respect of your peers in the industry, and could work with them to encourage this painful self-analysis across the industry and help create a profoundly new and different culture in banking.

8. Name and shame

This review would also drill down into exactly who was responsible for what in the series of scandals that have plagued Barclays over the past few years. These people should be named and shamed. If they still work for you, they should probably be fired. If they no longer work for you, their current employers and clients need to know what they got up to. If anyone is found to have lied to or misled regulators during the investigation, they should be fired as well. That of course would also apply to you and your closest lieutenants.

This is not about voyeurism (although it would be great to know who some of the moronic traders were who sent those emails). It is about restoring confidence in the staff and management at Barclays, and providing concrete evidence that you are serious about reform. If it means firing half of your interest rates desk or senior management team, so be it. It’s not as if they are irreplaceable.

9. No really, no jerks

There have been many references in the media over the years to your ‘no jerks’ employment policy. Clearly, this has not been terribly successful. Along with the new values, contracts and bonus arrangements, this ‘no jerks’ policy needs to be applied retrosepectively. This could keep HR busy for some time, but it’s an important part of the purging process. Over time, it would be better for Barclays to make less money in the short-term in exchange for having fewer jerks in the workplace in the future.

10. Resistance is futile

Barclays and other banks have fought tooth and nail against much of the recent regulatory reform. Of course, as Jamie Dimon has said, lobbying is a ‘constitutional right’, but it looks unsavoury when the apparent aim is to protect a way of doing things that needs urgent reform.

Embrace it. Reform yourselves, or the government will do it for you, and that will really hurt. Don’t wait for the Vickers timetable before you ringfence your retail bank from the investment bank. Work out a plan to do it sooner. Much sooner. Get your capital ratios to Basel III levels years before you have to. Introduce a cap on bonuses of, say, two times fixed salary, before Brussels gets so impatient that it imposes a cap of one times.

If that means you lose a lot of traders and bankers, that’s fine. Shareholders really don’t place the same value on the earnings from your investment bank that you do. If those returns fell and the investment bank shrunk, you would probably find that shareholders would reward you more than if you continue to plough the industry line that you need to be ‘competitive’ when it comes to pay.

Note (added on Monday 2 July)

Just to clarify in response to comments from a number of readers: I am not saying that Diamond should stay on and that this is all about his own personal redemption. Instead, I would argue that if he is determined to stay on as chief executive and his board is determined to keep him – as seems to be the case – here are some things he could do to provide hard evidence of a commitment to fundamental reform instead of just fuzzy words about ‘citizenship’.