Surface Ripples

The Men At The Top: Bob Diamond

Robert Edward Diamond Junior (to give his full name) was born in 1951 in Concord Massachusetts, so is slightly older than John Varley whom he will replace as Group Chief Executive of Barclays in March 2011. He was one of nine children with both parents being teachers. Perhaps he developed a competitive streak as he had eight siblings to compete with! On the sporting side, he is reputed to be “obsessed” with baseball, football and golf as well as playing tennis and skiing. He credits his love of sports with helping him to run his businesses.

He has three children and has been married to his wife Jennifer (whom he met in 1983) for 24 years. She is (apparently) a “scion” of the Barclays family. He is a strong family man.

Diamond was educated at Colby College – a well-regarded liberal arts institution in Waterville, Maine USA. Here he specialised in economics and earned his BA in 1974 before taking his MBA at the University of Connecticut (graduating first in his class in 1977). UConn again is highly regarded. His Barclays official biography also advises that he was awarded Doctor of Humane Letters from the University of Connecticut in 2006 and Doctor of Laws from Colby College in 2008. In all, an impressive academic background!

He began his career as a lecturer at the School of Business at his Alma Mater from 1976-1977, after which he joined Morgan Stanley where he stayed for 13 years and finished as Managing Director and Head of Fixed Income Trading.

He then joined CS First Boston in 1992 and went to Tokyo where he was Chairman, President and Chief Executive Officer of CS First Boston Pacific, responsible for Investment Banking, Equity, Fixed Income and Foreign Exchange for the Pacific region. After this, he became Vice Chairman and Head of Global Fixed Income and Foreign Exchange. He then went to New York where he was a member of the Executive Board and Operating Committee.

This would have set him up well for when he joined Barclays in 1996 where he moved up the ladder to become President of Barclays PLC and Chief Executive of Corporate & Investment Banking and Wealth Management. In 1997 he became a member of the Barclays Group Executive Committee since 1997 and is an Executive Director of the Boards of Barclays PLC and Barclays Bank PLC. Diamond is also a Board Member of BlackRock following the integration of Barclays Global Investors. He led the (controversial, some would say) initiative to purchase key assets of Lehman Brothers after its collapse in 2008, resulting in Barclays gaining a strong foothold in investment banking.

Diamond was voted the 37th in New Statesman’s annual survey of the world's 50 most influential figures Who Matter 2010.
Seen as the opposite of his predecessor, his appointment was described by Lord Oakeshott, the Liberal Democrat Treasury spokesman and a man known to be close to Vince Cable as “a great gambler but he has no experience of retail banking.” Up close, he is said to be measured and thoughtful, choosing his words carefully and showing an awareness that does not fit the brash image that some find more convenient to associate with him. John Varley has also, it appears, made sure that Diamond has been exposed to areas outside (as he puts it) his “comfort zone” in preparation for his takeover.

Diamond’s background shouts “Investment Banker” - involved in the kind of deals that Business Secretary Vince Cable dubbed “casino banking”. His success, remuneration and personal wealth have spawned critics and his elevation to succeed John Varley has caused concern and indignation. A tough customer who focuses on his goals, Peter Mandelson has described him as “The unacceptable face of banking” despite his contribution to Barclays’ success. Others describe him as “charming”, “inspiring”, “charismatic”, “a motivator” and “strong”, a “formidable builder of businesses”.

On the other side, he is also said to be “ruthless”, “aggressive”, “thin-skinned, even prickly, and is inclined to shoot from the hip” (these are all from recent press articles). He has been compared to the fictitious Wall Street character Gordon Gekko. He is said to have a number of high-profile acquaintances who can help “get things done”. He’s American, with the ebullience and aggressiveness that the Brits perceive “goes with the territory”.

John Varley said of him, “I think he’s been the progenitor of [Barclays Capital’s record performance]. When he joined Barclays, which was about ten years ago, I think that what we had then was an underperforming, subscale investment banking capability. And what we have today is an outperforming world leader. That’s quite a transformation in ten years. And Bob has personally led that.”

He is already thought to be worth around £95million but the new role will see this increase further. Mr Diamond has long been regarded as one of the top deal-makers at Barclays. He waived his bonus last year after widespread criticism of bankers. But he did receive £26million for his shares in Barclays Global Investors, the bank's fund management business, when it was sold to BlackRock. He has also been given a shares-based bonus deal over three years that could be worth £20million at completion.

Diamond faces a number of challenges as he takes over. He apparently feels that parts of the Barclays business aren’t up to standards that he would like to see. There will, it seems, be a focus on the commercial and retail divisions and their profit profile to increase their proportion of profit contribution versus BarCap (which provides the lion’s share).

On discussions about potential splits of investment and retail banking being discussed by regulators, Diamond plays his cards close to his chest, stating only that Barclays is cooperating with the government’s commission and that whatever decision it takes will be right for the UK and that Barclays will support it. All good, diplomatic stuff. One of the members of the committee, Martin Taylor, recruited Diamond to Barclays when he was CEO.

On Basle III, he wants to see a level playing field to protect against regulatory arbitrage – a valid point, considering that that the US has yet to fully implement Basel II…

The way ahead will have its challenges, but if ever there was a right man to face them, it’s Diamond. Expect to see (and hear) more of this remarkable man.

Labels: Career, Financial, Strategy

posted by William Martin @ 20:36