The Barclays board should face questions about its decision to back former boss Jes Staley despite his connections with the convicted sex offender Jeffrey Epstein, a leading corporate governance service has said.
Institutional Shareholder Services (ISS) told investors in Barclays that questions “can be posed now” about the board’s judgment in continuing to support Staley between 2019 and 2021 when he was subject of regulatory investigations into the nature of his relationship with the disgraced financier.
“While it is accepted that the board could only act on the information available to it at the time, there are questions over the judgment exercised during this period,” ISS said on Monday. “Given the particularly disturbing nature of the charges against Epstein, and their potential for reputational damage to the company.”
Despite its reservations, ISS recommended shareholders vote in favour of re-electing all Barclays directors at its annual general meeting on 3 May.
The Financial Conduct Authority and the Prudential Regulation Authority began investigating the nature of Staley’s relationship with Epstein – and the truthfulness with which Staley described it – in 2019.
When the investigations became public in February 2020, the Barclays board said it “believes that Mr Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Mr Epstein”. It said Staley retained its “full confidence”.
Staley quit Barclays in November 2021 after a preliminary report by the two regulators suggested that he had mischaracterised his relationship with Epstein. Staley has said he plans to contest the preliminary findings by bringing the case to the FCA’s regulatory decisions committee. The findings have not been made public.
Staley has since been named in a US lawsuit that accuses him of “personally observ[ing] the sexual abuse of young women” by Epstein. Staley denies the allegations made in a lawsuit against JP Morgan, where Staley was chief executive of its exclusive private bank and had Epstein as a client.
Two lawsuits aimed at JP Morgan claim Staley “personally visited young girls at Epstein’s apartments” and exchanged 1,200 emails with the late financier that included photos of young women in seductive poses and referring to women by the names of Disney princesses.
JP Morgan has countered that the lawsuits are “misplaced and without merit”, adding that the “plaintiffs have made troubling allegations concerning the conduct of our former employee, and if true he should be held responsible for his actions”.
The US bank is also suing Staley, saying he should be made liable for any penalties the US bank may face as a result of the “outrageous” alleged conduct.
Barclays said that since Staley resigned it had received “no material new evidence” from authorities to challenge the findings of a regulatory investigation into how Staley characterised his relationship with Epstein.
Staley’s lawyers have dismissed allegations that he hid what he knew about the late disgraced financier as “slanderous” and “false”.
