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| No half measures |
| Antony Currie / Oct 03, 2009, 00:10 IST |
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BofA succession: Bank of America’s board is learning the cost of putting too much faith in boss Ken Lewis over the years. Directors seemed rarely, if ever, to put any pressure on him to organise any kind of succession plan during his eight years in the corner office until the fallout of the botched Merrill merger forced the issue a couple of months ago. But with none of the internal candidates yet a shoo-in, the board is considering installing an interim chief for a year or two, according to the Wall Street Journal. That would be the wrong move.
Sure, it’s tempting. If nothing else, it could assuage the egos of in-house executives who might feel slighted and then bolt if an external candidate were appointed over their heads. That might apply especially to the three who seemed to be in the race to be Lewis’s longer-term successor over the summer: Sallie Krawcheck in wealth and asset management, Tom Montag in investment banking and Brian Moynihan in the retail division.
Avoiding yet more management upheaval sounds smart. But more likely, bringing in a short-term CEO would end up just delaying it: a stop-gap boss would find it hard to command the troops, especially the handful of strong-willed lieutenants battling to fill his or her shoes a few months later. It might simply replace one corner-office distraction – Lewis’s increasingly untenable hold on power this year – with another that could last even longer.
The bank’s board would do better to follow the example of JPMorgan’s Jamie Dimon set this week: clarify the succession even if it means sacrificing a valued senior executive, in his case investment bank co-head Bill Winters. The board has a few months to identify a successor to Lewis, and some potential candidates are available immediately. Overcoming short-term executive upheaval is something that shouldn't be too much of a problem for a strong leader. And that’s what BofA desperately needs.
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