UK-listed Barclays today announced its board will formally reprimand chief executive Jes Staley, and make a "very significant" change to his variable compensation after he tried to identify a whistleblower last year.

A probe by Simmons & Simmons, the law firm, found that the CEO “honestly, but mistakenly” thought it was acceptable for him to find out who had written a letter, the bank said in a statement today. The bank said Staley made an error in trying to identify the author of the letter.

The UK's Financial Conduct Authority and Prudential Regulation Authority - the two principal regulators in the UK - have started a probe into the CEO's behaviour, and the controls and processes adopted by Barclays.

At the centre of the case is the claim that Staley had tried to expose the identity of a person who had alerted Barclays to a personal matter about a senior executive, according to Bloomberg, citing an unnamed source. Such an attempt to expose a whisteblower could break US and UK laws.

In its statement today, Barclays said the matter came to light early this year "as a result of a concern raised by an employee regarding amongst other matters the adequacy of Barclays whistleblowing procedures". Barclays said it immediately instructed Simmons & Simmons to investigate.

The law firm found, and Barclays' board concluded that Staley "honestly, but mistakenly, believed that it was permissible to identify the author of the letter".

"However, the board has concluded that Mr Staley made an error in becoming involved with, and not applying appropriate governance around, the matter, and in taking action to attempt to identify the author of the letter.  The author of the letter was not identified and no further action was taken. Mr Staley has apologised to the board for his error," the statement said.

"The board believes that its response to the matter should be proportionate to its serious nature. It will therefore be issuing a formal written reprimand to Mr Staley and has decided that a very significant compensation adjustment will be made to Mr Staley's variable compensation award. The board will give consideration to the findings of the FCA and PRA investigations and the precise amount of the compensation adjustment will be determined by the board once those investigations have concluded," the statement said.

"The board is also commissioning independent reviews of Barclays relevant processes and controls, including its whistleblowing programme. The board continues to review the position of other employees involved in this matter," it said, but did not identify those employees by name.  

John McFarlane, the bank's chairman, said: "I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards."

Parliament
UK lawmaker Andrew Tyrie, who is chairman of the House of Commons Treasury Select Committee, said he and fellow members of parliament intend to look into the Barclays case.

“Parliament is behind a significant shift in attitudes towards whistleblowing in the financial sector. In 2013, the Parliamentary Commission on Banking Standards identified the need for financial services firms to have robust and effective whistleblowing procedures, recommending that a non-executive board member should be given specific responsibility for the effective operation of the firm’s whistleblowing regime,” Tyrie said.

“The Senior Managers and Certification Regime is supposed to ensure that whistleblowers are protected. This is the first proper test of those rules, and it is for the regulators to test whether Barclays had the right processes in place. The Treasury Committee will take a close interest in the regulators’ conclusions,” he said.