Too many chiefs

Deutsche: Clemens Boersig is flunking his most important job as chairman of Deutsche Bank’s supervisory board: ensuring a smooth succession to chief executive Josef Ackermann. He is proposing that investment bank chief Anshu Jain share the job with a German colleague who would handle relations with Berlin. This is a dangerous fudge. If Jain needs a German figurehead alongside him, Boersig should step aside for a new chairman.

The succession problem is entirely one of Deutsche’s own making. The bank has had two years to line up a successor since it last fudged the decision by extending Ackermann’s term. But it has done little other than flirt with former Bundesbank head Axel Weber, who recently chose to chair UBS instead.

Jain is clearly the leading internal candidate. His division generated almost three quarters of Deutsche’s income last year. If passed over, he would probably leave. True, he is not perfect: his lack of fluency in German and absence of political connections are an understandable concern. But installing another executive — probably German chief Juergen Fitschen — alongside Jain would be a recipe for rivalry and lack of clear authority.

It is true that investment banks — Deutsche included — are full of co-heads. But a model that works at a divisional level won’t cut it at the top. Deutsche has in the past had periods of dual leadership. But the bank was simpler then and was effectively run by a committee, with the CEO acting as a spokesman. Investors and regulators now demand that a single individual take responsibility.

Besides, co-CEOs tend not to last at banks. Sandy Weill and John Reed famously failed to get along at Citigroup. Oswald Gruebel and John Mack had an uneasy cohabitation at Credit Suisse. It’s hard to see why a Deutsche double-act could have a happier ending. This is why Deutsche should just appoint Jain. He, in turn, ought to concentrate on his German lessons. If the board still feels that he needs a native partner, they should find a more prominent replacement for the low-profile Boersig.