Josef Ackermann has evoked the ghost of Deutsche Bank past. The German lender’s former chief executive has criticised current co-CEO Anshu Jain for choosing to pass on a parliamentary hearing on Libor. Deutsche has certainly erred in keeping Jain back — not least because it has given Ackermann the chance to revive an unseemly Deutsche custom of undermining new leadership.
Jain is under no obligation to attend the finance committee hearing on November 28. Indeed, Ackermann himself declined an invitation to a similar Bundestag hearing on tax havens in May 2009. Companies often dispatch other executives in place of CEOs to such hearings; this time, Deutsche is sending chief compliance officer Stephan Leithner.
But it would be better if Jain was attending. He is still relatively new in the top job and needs to earn public respect. He was responsible for Deutsche’s markets business during the period when Barclays attempted to rig Libor. The hearing would have been a good place to start addressing questions about how Deutsche handled its own Libor submissions. With German elections looming next year, his absence makes him a political football. Green party politician Gerhard Schick has already accused him of “chickening out”.
An appearance would also have allayed concerns that Indian-born Jain is out of touch with Germany.
The appointment of Juergen Fitschen as a co-CEO was intended to address the issue, but the episode shows the co-head structure doesn’t insulate Jain from attack. There is no indication that Jain shrank from the task, as Ackermann has implied. But if it was a board decision to send Leithner, Jain could have insisted otherwise. Awkwardly, a u-turn now would look like a victory for Ackermann.
Only last month, Ackermann reportedly attacked Jain’s stance on the policies of the European Central Bank. The criticism evokes the top-level browbeating that has characterised Deutsche’s boardroom for years, usually with Ackermann on the receiving end. Supervisory board member Ulrich Cartellieri described him as “out of control” in 2004. A year later former Deutsche chief Rolf Breuer speculated whether Ackermann would be forced to step down. This is how things go at Deutsche. Still, that will be of small comfort to Jain.