The rise of the activist chairman
Regulators and shareholders are channelling their concerns over banks’ slow progress in shifting to new and sustainable business models to a new cadre of activist chairmen. Often experienced in the industry, independent of executive management and with strong personalities, these chairmen are increasing the pressure on bank CEOs to abandon unrealistic ambitions and reshape their banks to a new world. Expect more ructions ahead.
It had been a tense day and an almost surreal call with investors and analysts and, just for a moment, Michael O’Neill, chairman of Citigroup, let his guard slip. He had been busily maintaining the ludicrous pretence that nothing big had happened on October 16 last year. Sure, the chief executive of Citigroup had just offered his resignation, and O’Neill as chairman and the rest of the board had accepted it. But hey, good news: the bank had been working on a succession plan just in case something like this might happen and here was Michael Corbat, already warmed up and ready to take over, having done such a good job as one of Pandit’s ablest lieutenants winding down the bank’s non-core assets in Citi Holdings.
Callers had been so shocked at the news of Pandit’s departure that none even pressed O’Neill on the background to the conversation in which the outgoing CEO had offered to resign, although it was starting to dawn on many that what had really happened was that O’Neill had told Pandit that his time as CEO was fast running out and Pandit had chosen to go immediately rather than to hang around.