Lessons from the Jes Staley Case on leadership, accountability, and the FCA

The recent decision by the Upper Tribunal to uphold the Financial Conduct Authority’s ban on former Barclays CEO, Jes Staley, serves as a timely and powerful reminder to firms and their senior leadership that conduct both professional and personal is central to their ongoing fitness and propriety to hold senior roles. Not only this, but it also has implications for the trust placed in them by regulators, clients, and the wider public. The judge stated that Staley had “acted without integrity”, with the case highlighting the FCA’s clear position that it will take decisive action when it believes its standards have been compromised, especially by those in the most influential positions.  

At the heart of the FCA’s case is a key message that integrity is non-negotiable. The trigger was a letter sent by Barclays to the regulator in 2019, asserting that Jes Staley “did not have a close relationship” with Epstein and that their last communication occurred before Staley joined Barclays in 2015. Evidence later revealed that this was untrue, and that Staley was fully aware of the inaccuracy when the letter was submitted. The Tribunal judged that this act of misleading the regulator was a “serious failure of judgment” and an indication that Staley had “acted without integrity”. While the FCA acknowledged Staley’s professional achievements, they pointed out that these accomplishments could not excuse his conduct. 

The FCA’s decision should reinforce the importance of the Senior Managers and Certification Regime (SM&CR), even though firms across the financial services industry are still awaiting the regime review outcomes. In its absence, this sends a clear message that the conduct rules remain integral. Proposed to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence, the SM&CR is central to the FCA’s regulatory approach to operational governance. Under SM&CR, senior managers should encourage staff to take personal responsibility for their actions, improve conduct at all levels, and make sure clear statements of responsibilities are in place to enable staff to clearly understand and demonstrate role requirements.  

Critically, individuals must be approved by the regulator and subject to conduct rules that go beyond technical compliance. The Staley case is a clear example of the outlined SM&CR in action - a senior manager, found to have misled the regulator and acted without integrity, was sanctioned.  

The case also highlights the FCA’s sharpened focus on non-financial misconduct (NFM), which the regulator increasingly views as a core indicator of firm culture and leadership integrity. In her recent speech at the 10th Annual Culture and Conduct in Financial Services Summit - Culture is Contagious - the FCA’s Chief Operating Officer made it clear that workplace culture isn’t just an internal HR matter, but is intrinsically linked to the regulator’s broader objectives, including consumer protection, market integrity, and sustainable economic growth. She stressed that the risk-taking necessary for economic innovation must be responsible and lie on a foundation of healthy firm culture. Crucially, she pointed to NFM as a red flag for deeper governance failings, underscoring the FCA’s view that senior managers have responsibility for shaping and sustaining a positive workplace culture. 

A key learning is that there is a requirement of firms to ensure that they have the right people in the right positions. For example, this means that senior roles must be filled by individuals not just with technical expertise and a track record of success, but with a demonstrated ability to uphold ethical standards and regulatory expectations. Boards and hiring committees must look beyond CVs and profit achievements to also consider the character, values, and incorruptibility of those they appoint to senior leadership. In failing to do so, firms may expose themselves to serious reputational and regulatory risk. 

Firms tempted to blur the lines in pursuit of strategic goals should consider the consequences. The cost of non-compliance is not just financial, but also includes the risk of reputational damage, regulatory sanctions, and the loss of investor and public trust. Therefore, compliance should not be seen as a constraint, but rather a license to grow. Through this case, the FCA has demonstrated that it will not hesitate to act, even against the most senior figures, when it deems that standards have been compromised.  

This should serve as a nudge to firms to consider what they are doing to get things right, including taking ownership of the effectiveness of their checks and balances. By regularly reviewing governance frameworks to ensure accountability and alignment with regulatory requirements, firms are less likely to face the same pitfalls seen in this case. This is particularly relevant in the context of the growth agenda, one of the four priorities identified in the FCA’s five-year strategy. Here, firms must recognise that economic growth through increased competitiveness and innovation is good, but growth without integrity is a liability. 

To make sure you’re doing the right thing, reach out to us today for support in reviewing your governance structure(s), SM&CR framework(s), and competency checks. Having an SMF that meets regulatory requirements is broader than the rules – it must also encompass NFM expectations.