A review has found “shortcomings” in how the Bank of England deals with conflicts of interest after a deputy governor failed to disclose that her brother had a senior role at Barclays.
Charlotte Hogg quit earlier this year, just weeks after her appointment, following her admission to MPs that she did not reveal the relationship when first joining the Bank in 2013. She apologised for the oversight.
The Treasury Select Committee concluded at the time that her “professional competence” fell short of the required standard.
Ms Hogg, whose brother Quintin worked in a senior strategy role at Barclays, is the daughter of Douglas Hogg, the third Viscount Hailsham and a former cabinet minister.
A new report, which was commissioned by the Bank after her resignation in March, has found that established HR processes were not followed when she joined.
Instead, conflict of interest declarations were made via a “brief exchange of emails” with the chairman of the Court – the board that oversees the Bank of England.
When she applied to become deputy governor there was no requirement for the Bank’s detailed conflict of interest policies to be considered during the process, the review also found.
Image: The Bank of England did not follow established HR processes when Ms Hogg joined
Ms Hogg did mention the matter of her brother’s role at Barclays in a questionnaire for MPs on the Treasury Select Committee over the appointment.
But no check was carried out by the Bank to ensure that the information she had given to the committee “was consistent with that recorded on the Bank’s systems”, the report said.
It added: “More generally, there was insufficient focus on the risk that her brother’s role could be perceived as a possible conflict.”
The report by the Bank’s non-executive directors was carried out with advice from an external law firm.
It said: “The events that led up to Ms Hogg’s resignation highlight some shortcomings with the Bank’s approach to identifying and managing possible conflicts of interest.”
The review also found that while the Bank had a “strong culture of integrity”, there was “an insufficient practical understanding in some areas about how to identify and manage perceived conflicts of interest”.
The Bank of England said a series of recommendations made by the review would all be implemented.
They include the appointment of a full-time conflicts officer “with overall executive responsibility for conflict identification and management”.
Bank governor Mark Carney said: “The Bank holds itself to the highest standards, which is why it is important to address any actual or perceived deficiencies in our approach to managing conflicts of interest.”