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Will Hutton

Will Hutton

Principal, Hertford College, Oxford University and chair of the Big Innovation Centre

Monday 21 Oct 2013
Culture and compliance at Standard Chartered Bank

Culture and compliance at Standard Chartered Bank

Making HR fit with compliance and culture is the latest remit for Tracy Clarke, a woman who's reached the top of Standard Chartered Bank via a lifelong career of hard work and catapults

You could never accuse Tracy Clarke of taking a narrow view. Her job title, which she assumed last month, is something of a mouthful, putting her in charge of people, compliance, communications and culture at Standard Chartered Bank. And having worked in the bank all her adult life, in a variety of roles and a number of functions, she doesn't just know the business inside-out, but back-to-front and side-to-side.

Clarke's ascent through the ranks from regional branch teller to the office of the CEO is a sign of talent and hard graft, and shows HR is becoming more critical to the business. Her new role places her in charge of all compliance, research and legal activity, in addition to her ongoing remit of HR and communications. "It's a constant evolution," she says - an evolution that is particularly pertinent as the public, media and regulators all keep hawk-like eyes on the banks for any signs of bad behaviour. This is something Clarke keenly recognises.

"The bringing together of compliance with corporate affairs, and bringing the brand and internal communications agenda together with HR, drives many of the processes that impact on cultural change," she says. "Those three coming together can be a powerful combination in embedding our brand proposition, which is about doing the right thing. All of the banks in our industry have to focus on rebuilding trust. That trust is going to be borne out of our conduct, and that conduct is driven by how people behave every day. HR has a huge influence, as do corporate affairs and compliance. There's a nice fit between the three."

Despite Standard Chartered being based in the UK, around 90% of its profits come from Africa, Asia and the Middle East. Such a focus has allowed it to come out of much of the financial crisis controversy relatively unscathed, even being held up as an example of decent banking. Financially speaking, it has weathered the crash better than many peer organisations, recently announcing its tenth consecutive year of growth. However, last year Standard Chartered suffered a major stain on its otherwise reasonably clean copybook (at least in recent years) when it was accused of illegally hiding transactions with Iran. The bank ended up paying £419 million to US regulators and authorities. It has since stressed that it ceased any Iranian-dollar payment business in late 2006 and stopped any new business with Iranian entities in 2007. So, making sure values are upheld at every level of the organisation has never been more critical than it is now.

In many financial institutions, HR can still be seen as a back office function. Clarke says this isn't the case in Standard Chartered, and proves it with her promotion to director level in January this year. But she recognises this is slightly unusual. "Having spoken to peers in other organisations, I feel very fortunate about the prominence that people issues take, not just with the executive leadership but with the board," she says. "Here, the HR function has had a significant influence on the organisation's culture." One reason is a set of strictly adhered-to global processes. Standard Chartered is truly international, with 89,000 staff in 68 countries. "But," Clarke insists, "there is a set of core people processes that genuinely feel the same everywhere you go. I call them the glue processes. They have a significant impact on culture and if you want to influence a coherent culture, you need them to be consistent."

One of these "glue processes" is performance management, which Clarke thinks has a "massive influence on culture". "We have an approach that rewards not just the 'what' but the 'how'," she says. "Our values really matter and they bite, not just in performance rating but in reward. That gives HR a lot of significance in culture."

By insourcing many of the day-to-day processes to a shared service centre, Clarke says, HR managers are free to "focus on the higher order of HR". As she puts it: "For 89,000 people to believe values matter, it has to start at the top." At the other end of the organisation, values-based training during induction is vital, as is bringing the values to life at all levels. "We try to translate what the values actually mean to people in their job. If I'm a teller in a branch, what does 'courageous' mean for me practically? We try to bring that to life and make the behaviours relevant for all the job families."

Clarke can offer more awareness than most people of what each job at Standard Chartered involves. She's done a fair number of them herself. Her first contact with the organisation came when she joined the bank as a teller in her native Nottingham, a fresh-faced teenager just out of school. "I joined not knowing what I wanted to do," she recalls. "It felt like a good stopgap until I'd figured out what I did I want to do. The great thing about branch banking in those days was that you did everything - from working with individuals to working with locally based multinationals like Boots. It was a great learning ground for the whole spectrum of what banks do."

After completing vocational exams, she moved to Birmingham to work in corporate banking ("It's not far from Nottingham, but I'd only been abroad a few times, so it seemed a lot further," she jokes), then to London. It was there that Clarke's newly acquired New Zealand-born husband suggested they "go on an adventure", so she applied for a role as head of training in Hong Kong.

"I'd never done training before, but having been in other functions like payments, trade finance and credit risk analysis, I thought I could be a good trainer, and learn about Asia at the same time," she says. "I did lots of travelling around the network and started to understand the real potential of Standard Chartered in the growth markets of the world. That's the point at which I decided it was a place I could really invest my career."

On returning to the UK, Clarke stayed in HR, building the company-wide talent management framework that is still in use today. And when Mervyn Davies (who was subsequently trade minister in Gordon Brown's Government) became Standard Chartered's CEO in 2001, he asked her to become his executive assistant. "I was head of talent management and he'd asked me to come and talk to him about some talented individuals," she recalls. "So, I did the groundwork and took him the list. His response was: 'Why isn't your name on here?' I was flattered, but with two small children at home, I wasn't sure I could deliver. He told me to stop being ridiculous."

Clarke continues: "My colleague calls these catapult opportunities. They are where you take a risk but if it works out, it can catapult your career. That was a catapult career move. I worked with the group CEO right at the centre of a great change agenda, the build of a new strategy, a number of acquisitions and the launch of our values. It became clear to me that my natural bias was around communications, culture and people - all the HR and corporate affairs roles."

Reflecting its international roots and dealings in 68 markets, the walls and surfaces of Standard Chartered's impressive London headquarters are festooned with Asian and African art, with paintings and artefacts at almost every turn. You might think if it gets into any more tricky financial situations, it could just hold an auction. According to Clarke, this global outlook is one of the bank's greatest strengths. "We can be truly international for a client," she says. "It matters that we have an international management team and move talent around the organisation a lot. There are about 800 people on international assignment at any time, and many more than that have moved permanently. Of our leaders, there are very few who have worked in only one country."

But this comes with a set of challenges all of its own, including those around hiring. "We've got the whole spectrum of hiring challenges," Clarke admits. "Here in the UK, given the restructuring of the industry, there is more highly skilled talent available." Somewhere like China is at the other end of the spectrum, as skills in

international banking are scarce and a number of banks are entering the market. "It's a cliché, but there genuinely is a war for talent," Clarke says. "People are constantly moving around for the next pay rise or promotion. Managing attrition in those markets is a real challenge. Then you've got somewhere like the UAE, where we've got quotas to meet [for the hiring of Emirati staff]."

Given this global nature, Standard Chartered is an inherently diverse organisation, having around 127 nationalities in staff. But "diversity comes in many forms," says Clarke. "As you work your way up-pyramid, we have challenges for gender diversity in leadership, which is exacerbated by market challenges in various countries." This means putting a focus on women's development programmes in Africa and the Middle East.

"Another crucial aspect of diversity is ensuring we see the talent pools in our markets as broad as they are - the differently abled and visually impaired, for example," she adds. The bank's 'Seeing is Believing' programme directly tackles avoidable blindness in its markets, funding NGOs to help prevent and treat sight loss. In seven years, it has become a $37 million global funding initiative, reaching more than 30 million people.

"In a number of our call centres, we have visually impaired sales teams," says Clarke. "It isn't just a nice thing to do. These are talented individuals who perhaps in other circumstances may not have had the opportunity to work. By tapping into non-obvious talent pools you can be inclusive and bring in really talented people."

Although she has been instrumental in bringing HR to the fore at Standard Chartered, Clarke recalls that when she first joined the HR function in 1998, she "didn't believe it was going to lead anywhere. I thought my future was back in the business." Yet under her leadership, HR itself has come "back in the business".

"I am always getting asked by aspiring HR talent: do you really have to have business experience to become the HRD?'" Clarke says. "My response is that it's definitely helpful. As an HRD, you have to be commercially minded and able to speak in a language business managers understand. We use a lot of jargon in HR. I always have to check myself to ensure we are using straightforward language that makes good HR practice relevant in a business context."

So what is it that kept her in HR, rather than fleeing back to sales? "Being in HR in a growth organisation is particularly exciting and challenging," she says. "There's always a new challenge and something new to learn. I enjoy the newness I get to encounter each day. And this role most closely aligns with the kind of person I want to be, the influence I want to have and the legacy I want to leave. It's a role that, for me personally, means I can have the biggest impact on the success of Standard Chartered."

As regulations become stricter and banks are more closely watched, Clarke recognises that HR is facing new challenges in the sector. "We have to be careful in a compliance-led industry that we don't disempower people or stifle their creativity," she says. "The public is our regulator now, and when things go wrong the media are always looking for accountability. I believe that is right, but sometimes things do go wrong, and the best outcome is to learn by one's mistakes. We have to treat people fairly, so compliance and HR working together more closely in this environment can really have an influence on getting the equation right."

Warming to her newly expanded role, Clarke stresses that it's "not just about HR". "Culture and brand are inextricably linked. I believe the strongest brands are not made by the most creative advertising agencies, they are built inside-out: 89,000 people, all living the brand promise, every day."