In the recent Treasury Committee interview of Bob Diamond, the former CEO of Barclays, we saw the weakness of the select committee at its best. The committee asked poor questions, and received worse answers. The reasons for this may be political; the Committee Members may have political reasons for not asking hard, direct, or difficult questions. However, politics cannot explain the poor quality across nearly all select committees.
Andrew Tyrie;’s questions to Bob Diamond illustrate several key lessons in asking bad questions. First, avoid closed questions. For example, yes or no questions allow one-word answers. By asking these, the line of inquiry is closed. Instead, only use these to close off questions or to guide the questions in a certain direction.
Second, avoid putting words in the other person’s mouth. For example, do not give them an answer for which they can then agree with your statement or restatement of their position.
Third, listen; always listen to the answer, before moving on to the next question because a different follow up question may be needed. For example, Tyrie focuses on the regulators calling Barclays over the weekend, but not asking whether Mr. Diamond spoke with the Chancellor, Mr. Osborne.
Here is an analysis of questions with my commentary.
Q6Chair: Why are you so reluctant to tell us what may have transpired with those regulators over the weekend? We are going to have them before us.
Bob Diamond: I am trying to think if I had any conversations with regulators over the weekend.
Q7Chair: You didn’t but Marcus Agius did, didn’t he?
Here is an example of putting the words in the mouth of Mr. Diamond. It is also an example of asking a closed question. Moreover, it asks Mr. Diamond to speculate on something he cannot know. Instead, he should have asked “Mr. Agius had discussions with regulators and others over the weekend, what did he explain to you from those conversations.”
Bob Diamond: Chairman, I think it is as simple as this. If Marcus had conversations with regulators, that is a conversation for him to have with you. I did not discuss that with him; I just discussed my reasons.
Here is an example of a missed opportunity for a follow up question. Instead of focusing on regulators, the question should be about widening to other people that were contacting Mr. Agius. As it stands, there is little to cross-reference against Mr. Agius when he comes to the Committee.
Q8Chair: It is widely held that regulators have lost confidence-and it’s not just LIBOR-in your leadership of Barclays. Why do you think that is?
This is an example of a good question. It is open ended, it forces Mr. Diamond to respond and explain his position, which allows for further follow up questions.
Bob Diamond: I think there has been an unfortunate series of events in the past week around Barclays being identified as the first bank in a report that clearly showed very, very bad behaviour by groups of people. How we dealt with that was, I think, appropriate and that was a sign of the culture at Barclays, but that is not coming out.
Q9Chair: The answer you are giving is that it is the “the first mover disadvantage“.
This is a terrible follow up question. The Chair accepts the response at face value, summarizes it in his own words, and allows it to move without follow up questions. Why did he overlook the emphasis on “unfortunate series of events?” Is the scandal unfortunate? No, fortune has nothing to do with the wilful intent to manipulate the LIBOR for profit. Alternatively, is it the coverage that is unfortunate? Why not explore his leadership instead of accepting the first mover theory. The two are not connected. Instead, what Mr. Diamond accepts is that the report vindicates the view that his leadership was not capable of reforming Barclays. He was responsible for the unit that was operating inappropriately, yet we do not have that follow up question.
Bob Diamond: Yes.
Q10Chair: But it is true, isn’t it-at least I have been told-that the FSA were concerned about your appointment as chief executive? They sought assurances from the board at the time of your appointment that there would be a change of culture at Barclays. Is that not correct?
This is a poor question. The question is closed and does not offer anything further for the response. Questions that start “It is true, isn’t it” Sound good for politics, but as a forensic question is useless. Moreover, if the question is true, and the Chair has that evidence, the line of questioning should have been different. The questions should have been on the culture that Mr. Diamond inherited *and* to which he contributed as a senior manager. Instead, the Chair fails to listen and ask probing follow up questions.
Bob Diamond: That’s the first I’ve ever heard that there was any question about my appointment as chief executive. I certainly went through, as a chief executive appointment would, interviews with the Financial Services Authority, and I got very strong support for my appointment to chief executive.
Q11Chair: And you know nothing of any written submission by the FSA to the board at that time, setting out the need for an improvement in the corporate governance of Barclays, an improvement in the culture, a need to look better at how you were assessing the risk appetite, and to improve the control framework? You know nothing about this whatsoever?
Here is a question that is equally bad. It is almost as if the Chair is trying to get Mr. Diamond to say that he knew nothing about what is going on with the report. Is Chair trying to find out what is happening or is it giving Diamond grounds to plead ignorance? Why is the letter not introduced as evidence? Where is the letter?
Bob Diamond: I knew nothing about it at the time that I was appointed. Correct. I don’t know anything about it.
Q12Chair: We’re talking about September 2010 here.
Bob Diamond: Correct.
Q13Chair: And you know nothing at all about the suggestion that you were asked to provide assurances that you would challenge your long-term colleagues at BarCap not to take excessive risks?
This is an example of a leading question that is poorly phrased and constructed. A closed question allows the response to be Yes or No. A better question would have been to ask, “Why were you seen as being unable to challenge your colleagues to the extent that the FSA even commented on your perceived inability?”
Bob Diamond: I don’t remember any specific comments, but I am sure there were discussions with the regulators during the process of my succession. My memory is more around whether, having been associated with the investment bank for a number of years, I would be able to disassociate myself so, as a group chief executive, I would be able to leave the running of the investment bank to-at the time-Rich and Jerry.
Q14Chair: Is it true that, in February this year, the FSA came to the board and expressed their concerns?
This is a shockingly bad question. The answer is obvious, as Mr. Diamond points out. The FSA come to the board every year as part of their normal regulatory work. Someone as experienced as the Chair would or should know that the FSA meets regularly with the Board.
Bob Diamond: I think it’s every year, Chairman, in that February meeting that the FSA comes, so-
Q15Chair: What was said?
This is a good question to get Mr. Diamond to talk about the situation.
Bob Diamond: The context of the discussion when it got to controls, which I think is what you are asking about-I should call it the control environment-was that the focus and the tone at the top was something that they were specifically happy with. In particular, they talked to the board about Chris and I and our relations with the regulators, how we dealt with any situation that came up. I am thinking of PPI-
Q16Chair: Isn’t it a bit more specific than that, Mr Diamond? Didn’t they tell you that trust had broken down between the FSA and Barclays?
This is a terrible question. The Chair appears to want to avoid the answer to the original question or move the line of questions to something else. The question is leading, it is closed and it does not lead us to anything new.
Bob Diamond: I don’t recall that in the February meeting.
Q17Chair: Didn’t they tell you that they no longer have confidence in your senior executive management team?
Another bad question by the Chair, it closes the line of questioning. A better question would have been to ask Mr. Diamond what he understood from the letter and how he acted after receiving the meeting. How Mr. Diamond acted after the meeting would have shown more about what he took from the meeting than asking him.
Bob Diamond: No, sir.
Q18Chair: And wasn’t all this followed up with a letter?
Again, a poor question unless the Chair is trying to show that the meeting was followed up with a letter. However, the Chair allows Mr. Diamond to avoid the question without asking about the letter.
Bob Diamond: There was a discussion that, as it got down into the organisation, they felt that there were some cultural issues-that people sometimes push back; that some of the push-back wasn’t always filtered up to the top-so there was an overall discussion on culture. We took some of this as, “This is the annual review from the FSA”, and-
Here is the answer that opens the door to Barclays’ corrupt culture. The Chair walks past it. He does not wait for a follow up or listen to what is said. The FSA, as Mr. Diamond is admitting, is saying the culture does not allow critical upwards communication. The culture of good news reporting upward calls into question whether there is a healthy internal culture. It suggests a top down culture in which dissent or bad news is punished, which means any bad news is dismissed or dealt with like the “media management” around the initial LIBOR fixing allegations. Alas, the Chair misses these questions and goes off on the yearly nature of the FSA meeting.
Q19Chair: This is the sort of thing they say every year?
Bob Diamond: No, I didn’t mean it that way at all, sir-apologies-but it was part of an annual review, so it is always going to have some things that they are going to be critical of and that we can do better. But they were specifically pleased, and said so to the board, with the tone at the top, referring in particular to Chris Lucas and myself and our colleagues on the executive committee.
From the above, we can see the Chair is poor at asking questions or asking follow up questions. Like most powerful people used to getting their own way and having people tell them what they want to hear, or what they expect to hear, they do not have the humility to listen. If the Chair had the humility to listen and use follow up questions, he could have opened up the issue. Instead, he walked past several open doors because he was unwilling or unable to ask the necessary follow up questions.
What should you do to have better questions?
First, always ask open-ended questions. The goal is to get the person to tell their story. When they start to tell you their story, then you can ask the probing questions to get them to reveal more about their story. Otherwise, you remain on the surface.
For example, ask, “Why did you take a note of this telephone call” Avoid asking “Do you take notes of telephone calls?”
The focus should be on “why” and “how” something was done because these allow the person being questioned to explain more about what they were doing and thinking. The goal is to take them off the prepared script in their mind towards something you want to achieve. If you do not want to achieve that goal, then ask the questions like those at the Committee. However, if you do not want to find anything out, then simply follow the Chair’s lead and you will have poor answers because you had poor questions.
Third, listen to the answers so that you can ask follow up questions. On three occasions, in the 13 questions that were sampled, a strong follow up question would have allowed us insight into what was happening at Barclays.
Fourth, prepare a question plan for the committee so that questions can be cross referenced. Moreover, it can allow for follow up questions if the person asking the question does not see the immediate follow up question.
Fifth, asking good questions is difficult. The questions have to be prepared and possible answers have to be considered so follow up questions can be prepared.
What you ask is what you will find. If someone is trying to avoid asking difficult questions, then you will not find the answers. The question for the Treasury Committee is, “Why does it appears that they wanted to avoid answers rather than find them?”
- Barclays urge Diamond not to take full £17million payoff (telegraph.co.uk)
- Barclays just the tip of the iceberg as banking braced for more scandals (guardian.co.uk)
- Barclays trading floor’s culture of fear ‘led to staff rigging interest rates’ (dailymail.co.uk)
- Diamond ‘would have known about rigging’ (guardian.co.uk)