Ever the gentleman, Marcus Agius quit as chairman of Barclays last week in a doomed attempt to protect Bob Diamond, who was resisting calls to step down as chief executive over the rigging of interest rates by the British bank’s traders.
Admirers say Agius showed integrity by placing the good of the bank above his own interest, but as post-mortem criticism of the Diamond era intensifies, his loyalty to the brash American may go down in banking history as his worst failing.
“I deserve blame for being among the first to succumb to the myth of Diamond’s indispensability,” former Barclays CEO Martin Taylor said in a Financial Times column on Monday about whether he himself should have sacked Diamond after a crisis over investments in Russia in 1998.
In a thinly-veiled criticism of Agius, Taylor went on to say that “some in Barclays were still in thrall (to that myth) days ago”, even though the unfolding rate-fixing scandal was making Diamond’s position untenable.
Diamond stepped down the day after Agius did and the outgoing chairman was called back to hold the fort. On Tuesday, it will be his turn to answer questions by a panel of lawmakers trying to uncover what went wrong at Barclays.
While Diamond, 60, has made headlines for years over his bonuses and bold but risky business moves, Agius, 65, was little known to the wider public until this scandal broke.
“If you want to define him, I would say he is the antithesis of brash,” said one former colleague at the investment bank Lazard, where Agius spent 34 years and rose to be chairman of the London arm before he became Barclays chairman in 2007.
“He is charming and impeccably well mannered. He is an old-school banker typical of his generation and very proper. He will not tolerate rudeness or bad manners,” said the colleague.
Educated at Britain’s elite Cambridge University, then at the prestigious Harvard Business School, Agius’s long career at Lazard and his marriage to a member of the Rothschild banking dynasty place him at the heart of London’s business aristocracy.
Always perfectly groomed, he speaks with the accent of Britain’s privileged classes, in a measured but authoritative tone. A member of White’s, one of London’s oldest gentlemen’s clubs, he enjoys skiing, sailing and shooting according to his entry in Debrett’s, the who’s who of British high society.
Far from challenging the get-rich-quick culture of the City of London financial district, he repeatedly approved huge pay packets for the controversial Diamond even though these caused endless bad publicity for Barclays.
In an embarrassing scene, he was heckled and mocked at the bank’s latest Annual General Meeting, in April, as he argued that Barclays had to pay the market rate for an executive of Diamond’s calibre.
Almost 27 percent of Barclays shareholders voted against the decision to grant Diamond 80 percent of his maximum 3.4 million-pound ($5.3 million) bonus even though, in his own words, 2011 returns had been “unacceptable”.
Agius apologized to shareholders for badly communicating the bank’s pay strategy and promised to “materially” increase dividends, but the shareholder revolt contributes to the emerging picture of a weak chairman who over-indulged Diamond.
Yet several bankers who have worked closely with Agius at Lazard and Barclays told Reuters that he stood out as a man of high moral standards in the fast-and-loose City, using words like “upstanding”, “decent” and “respected” to describe him.
“He is very different from the greed-obsessed generation. He is one of the few bankers that you would always deeply respect and look up to. He is a model for us all,” said one banker, reminiscing about Agius’s considerate management style.
“When I was very junior and still a no-one at Lazard, he wrote good words about me to my boss as I had won a mandate on a very small deal. I was amazed that he noticed and complimented me in a very elegant way.”
But the rate-fixing scandal will undoubtedly leave a stain on this otherwise flattering portrait. Agius will exit Barclays under a cloud and has also resigned from his position as chairman of the British Bankers’ Association (BBA).
The BBA is in charge of compiling the London Interbank Offered Rate or Libor, an interest rate that underpins trillions of dollars’ worth of transactions worldwide, from information submitted by banks.
The revelation that Barclays traders had massaged the figures they submitted to the BBA to try and manipulate Libor was what started the scandal that cost Agius and Diamond their jobs. ($1 = 0.6442 British pounds)