The chair of the body that was set up to deliver open banking in the UK has resigned as an investigation into sexist and racist behaviour concluded that the agency allowed “a culture of bullying and intimidation to prevail.”
Imran Gulamhuseinwala tendered his resignation as trustee and chair of the Open Banking Implementation Entity (OBIE), as part of a package of remedies meant to address poor culture and governance at the entity, said the Competition and Markets Authority on Friday. The CMA ordered nine UK banks and building societies to set up the OBIE in 2017, to encourage big banks to share customer information with startups and fintechs, and address a lack of competition in the financial sector.
The scathing report – conducted by Alison White, who has worked on a number of boards and is a non-executive director for the Office of the Secretary of State for Wales – said that the number of people who described the working environment as “toxic” was “overwhelming,” and concluded that there were “too few checks and balances”, as well as failures in the way the body managed complaints.
It concluded that sexist comments were “tolerated” at the entity’s office and that bullying “may have been racially motivated”. It also found workers also “feared they would lose their roles if they raised concerns”.
The review was originally launched in September 2020 after a whistleblower contacted the CMA with a number of allegations aimed at the entity’s senior staff. Nearly 50 people were interviewed as part of the investigation, conducted by lawfirm Mishcon de Reya, with more than half of the interviewees raising serious concerns about the way the OBIE was run.
“The conclusions of this investigation do not make for pleasant reading,” White said. “The bare facts of the situation are that 28 people gave evidence to the investigation about a range of complaints, some of which involved potentially serious issues of bullying, harassment, discrimination and victimisation.”
“They also alleged malpractice in how the organisation was being managed, and the investigation has found that there is sufficient evidence that there was indeed not “proper management”, White added.
The report, which only identified Gulamhuseinwala by his initials “IG”, said the chair did not take sufficient steps to ensure the OBIE was properly managed, and that the small board appointed during his tenure provided no opportunity for independent challenge or scrutiny, leaving him in “sole control”. However, the Guardian understands that OBIE bosses approached the CMA on three separate occasions – in 2019, 2020 and earlier this year – in hopes of bulking up its board with more non-executive directors. Those requests were denied.
A CMA spokesperson said that while the regulator would learn lessons from the failings, “the independent investigation concluded that the trustee [Gulamhuseinwala] did not ensure that the OBIE was properly managed and that inaction and failures by the leadership of the OBIE allowed a culture of bullying and intimidation to prevail.”
The report found no evidence that Gulamhuseinwala personally held a discriminatory attitude towards women, contrary to allegations by the whistleblower. However, it did find that he and a colleague failed to protect the confidentiality of a whistleblower in that they shared details of a whistleblowing complaint internally.
“Whilst the review did identify some collective management failings, the personal allegations levelled at me were found to be without foundation,” Gulamhuseinwala said in a statement. He added that he was proud of what he and the team had accomplished during his tenure.
The CMA and the banks that established the body – including Bank of Ireland, Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest and Santander – said they “accept their share of the responsibility” and set out a number of remedies to address the failings at the OBIE.
The remedies include appointing new non-executive directors to the OBIE board, in order to “appropriate independent scrutiny and oversight.” The CMA has also appointed one of its non-executive directors, Kirstin Baker, to lead a separate review into the way it designs, implements and monitors programmes that emerge from its market investigations.
CMA chair Jonathan Scott thanked workers for coming forward with their complaints, adding that “without them these serious issues may have remained unaddressed.”