BP: Board gaggle or giggle?

If there ever was a case that demonstrates what ails 21st century boards still stuck in the 20th century, then the naming of Robert Dudley as worldwide CEO of BP more than qualifies. Here's why:

1.) While Dudley deserves major credit for leading during the worst ever corporate disaster in U.S. history, his tenure will be marked by the same legacy culture that gave rise to the current role. Dudley worked for Hayward, which means he's inextricably linked to previous strategy. That never leads to innovative change yet somehow boards have convinced themselves that it does. The primary saving grace seems to be BP's solid financial performance globally minus huge losses mounting in North America.

2.) Boards under pressure never make good leadership decisions. While they may think Dudley is the right answer for right now, the fact that the board hasn't been transparent or even visible in the remotest way will continue to leave lasting questions about what they signed off on under Hayward. Those questions, combined with no sign of shared vision and values, means more of the same until Dudley can re-position the brand. That process will take infinitely longer than if an outsider came in to mix things up in what amounts to a complete repuational rebuild.

If Dudley is cagey on governance, he'll move quickly to consolidate his power and replace a few board members with stronger, more crisis-proven leaders from within industry. Surely there must be a few out there somewhere who would be willing to serve in a new regime?

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Spencer Stuart guides Nokia CEO Search

ATLANTA (July 20, 2010) -- The Garlington Report (TGR) has learned that executive search firm, Spencer Stuart, is guiding an effort to find a new CEO at Nokia, the Espoo, Finland-based phone manufacturer. One of the firm's market leaders, Jim Citrin, is reportedly leading the search for Nokia's board yet directly refused further comment earlier today.

It should be noted that "learned" and "reportedly" are not the same as confirmed. Based on the firm's lack of official confirmation despite repeated attempts, we are reporting what we believe to be true vs. citing unnamed sources or "persons familiar with the matter."

This marquee assignment further illustrates Spencer Stuart's hold on major search and advisory work at the Fortune 500 level. Tracing back to last year following the market crash in late 2008, the firm has handled several of the more consequentially perceived board/leadership makeovers at GM, AIG and Citigroup. A Wall Street Journal article published last year reported that senior-level members of the Obama administration suggested calling one of Spencer Stuart's top recruiters, Tom Neff, directly on the GM situation. That effort led to the selection of former AT&T Chairman and CEO Ed Whitacre as the company chairman, and then CEO of the newly re-organized company.

Stay tuned for more coverage on who may fill the Nokia CEO position, and perhaps more importantly, what the selection of Spencer Stuart may mean to Nokia's current board composition. Here's a teaser:

According to governance guidelines on the company's web site, http://www.nokia.com/about-nokia/corporate-governance/board-of-directors, the board currently comprises 10 members with nine non-executive directors who are "independent as defined by Finnish standards." That same number drops to eight, according to "rules of the New York Stock Exchange."

At Nokia's annual meeting held on May 6, 2010, the board's independent directors elected Jorma Ollila to continue to serve as chairman and Marjorie Scardino as vice chairman. Scardino formerly served as chief executive of the Economist Group (1993-1997) and has been CEO of the Economist's owner, Pearson PLC, since January 1997.* Ollila formerly was Nokia's CEO (1999-2006) and currently serves as chairman of the board of Royal Dutch Shell in addition to his chairman duties at Nokia.Out of the non-executive director slate, only Scardino currently serves as CEO of a major company. This fact, combined with the selection of Spencer Stuart, suggests a further shake-up of the board may be in the works.





Left to right: Jorma Ollila, Marjorie Scardino and Jim Citrin (Credit: Nokia and Spencer Stuart web site photos)

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*Scardino's current role at Pearson is not listed on her bio under board of director information posted at Nokia's web site.

For every owner and brand steward

http://www.pehub.com/77098/hefner-sends-letter-to-playboy/

Every now and then a major business owner will stand up for what he or she thinks is in the best interests of the brand. This doesn't happen very often and rarely if ever does it occur at the Fortune 500 manager or glorified CEO level. Playboy majority shareholder and founder Hugh Hefner is making a play to buy back the company that he created. Note the language (contained the attached link) directed at the brand vs. what the rest of us mere mortals tend to obsess about every day. I can hear the wise cracks from here, but for today, the TGR's hat tips to Hef. What a great American icon!

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Giving credit where credit is due

So the BP board has taken action. According to their Chairman who appeared at the White House yesterday to make the following statement (and gaffe), http://http://www.msnbc.msn.com/id/21134540/vp=37736716&#37736716 the board has decided to:
1.) Postpone payment of the stock dividend for the remainder of 2010 and
2.) They've appointed (actually, the government has) what's called an "adjudicator" to oversee payments to parties impacted by the disaster. None other than Ken Feinberg who is perhaps best known for handling monetary relief efforts following 9/11.

These aren't exactly bowl us over with great action moves but they're moves nonetheless. If you do manage to watch this clip, feel free to chime as in the "little people," which must be what the Chairman meant. Long way to go before we sleep on this thing called leadership.

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Live blogging the oil bigs

It never ceases to amaze how much selfish self interest continues to rule the executive ranks. This morning's testimony by the oil industry big wigs screams for a better message. The testimony, which the Times reports on here: http://www.nytimes.com/2010/06/16/business/16oil.html?ref=business, begs for acknowledgement of at least one reality: Whether they like it or not, BP's mess is their mess -- just as it is the government's mess. Executives can wax on all they want about "competitive advantage" and "higher safety standards," but until they wake up and accept this disaster-based reality, then the industry will remain -- pardon the pun -- forever mired in the mud. Is it too much to ask for someone to step up and lead here?

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BP: Same old questions, no better answer

As Day 52 passes on the nation's worst-ever environmental crisis, it's time to understand how leadership situations such as this one are allowed to manifest into full blown disasters.

This posting will not attempt to do what the legions of other more talented hands have done to encapsulate events. No individual blame will be placed, no screams will be made for heads or CEOs nor will any investigations ensue. It will simply ask a few questions and then attempt to provide deeper perspective from both known facts and sources who work with corporate boards vs. opining from inside universities and think tanks.

And the question is...Where was the British Petroleum (BP) board when this crisis first happened? Followed by...What was or has been their response since then? Finally...how does what's known today inform future actions?

First, it should be noted that as bad as this operational crisis may be, what's always far more telling is how a company responds to a crisis. Going back to the worst domestic non-response case of all-time, Three Mile Island, letting the phones ring off the hook for days is the obvious worst while deft handling of the Tylenol crisis continues to rank as the most effective. Where the BP case study ends up will depend heavily on a final, still to be resolved outcome.

Back to the main question: Where was BP's board? Looking over the company's official communications, since the explosion on April 20, at least 50 releases have been issued. Other than a joint statement between the Chairman and CEO on June 4, no board position has emerged nor has any communique indicated what the board has been doing since the outset. It's unclear how many board meetings have been convened nor is anyone at BP willing to confirm an official number. It should be noted that this is normal behavior. Boards generally speak as one through their Chairmen and CEOs and meet quarterly or more as issues demand.

Our view, however, is that this situation is anything but normal. In fact, had the BP board decided to openly challenge the validity of what management was telling them at the outset, chances are the leadership criticism would not be as severe. Even despite the 700,000+ gallons of oil spewing forth killing wildlife and scaring everyone to the height of "Jaws," the movie.

BP directors have no further to look than themselves (for a listing of the 14-member board, which includes six internal directors and seven non-executive types, go to http://www.bp.com/managedlistingsection.do?categoryId=9021801&contentId=7040608) and the rash of governance ineptitude during the market collapse of 1998 for a guide on how not to act. Back when the financial system was in a free fall, not a single board member at Lehman Brothers or Merrill Lynch came forward to ask tough questions. Or at least they didn't publicly. Chalk another one up to attorneys who now manage the personal matters of board members as closely as their corporate clients.

Put more simply in the BP case, even if the board has been deliberating about whether to replace CEO Tony Hayward, what good is it to do so without full transparency? Especially when the company has already lost its reputation and a third of its equity value. Look at this way. Hayward could be the second coming of Jesus Christ right now and it wouldn't matter. The system that led to the current response is what needs changing, not the talent. A single governance standard across cultures might not hurt either.

The worst duplicity may lie in the fact that a majority of Fortune 500 board members tell public surveys that reputation is extremely important, yet when the proverbial blank hits the fan, they somehow develop amnesia with their own rhetoric.

This typical governance pattern is unacceptable during a crisis turned disaster. Real or perceived, nothing ever changes during a time when people are livid at institutions and want better solutions. Instead we're treated to heightened rhetoric and the blame game while Rome burns. Or in BP's case, while rescue workers wash oil off pelicans, and tourism officials rush to assure vacationers via promotional ads while oil sheens gather off the coast line.

Speaking of self interest, where are ExxonMobil, Texaco and Chevron? Couldn't their interests be BP's interests at this point? It's amazing that industry hasn't realized what the rest of us now know: Public opinion will never return in their favor no matter what happens. BP's crisis is now a national crisis, which means industry has lost another generation. No cagey spin can reverse this trend, which originates in the mismanagement of enterprise-wide risk, a key board competency.

The final takeaway here is that while reputation can obviously vanish overnight it's generally a slow crawl of leadership incompetency up to that point. With typically a raft of characters floating nearby who could have stepped out of their "best and brightest" institutional suits to demand something better. It's the least anyone could do to help improve a system that remains mired in outdated, group think behavior.

Heck, if nothing else, as a wise friend suggests, why doesn't BP just start giving away free gas to the Gulf's fishermen? To borrow a mangled phrase from a maligned former U.S. president, that's just common sensical!

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Scary stuff

Thanks to today's PE Week Wire and First Read contributor, Michael Snyder, we've now had our quarterly dose of economic reality thrown up on the home-based office screen. I wish I could say it's positive.

Warning: Grim fact-based reality about where things stand can be found at http://www.blacklistednews.com/?news_id=8878.

Recent gyrations from Europe aside, the so called recovery obviously has a long ways to go.

What's the new normal?

Dear Clients and Colleagues:

There's a new default mode in the marketplace. It's called the "New Normal." You may have already seen the term cropping up in reporting on the financial sector.

It's not clear what New Normal means or if there's anything substantive behind the term. Chalk another one up to media creation. Here's our take. New normal seems to describe a new place that some have arrived at following the Great Recession. Just don't ask them to tell you what's behind the "at."

What the saying points to is the continuing need for businesses (and their leaders) to find better narratives describing what they're doing or trying to do. After what's happened over the past couple years, there's little excuse left for an organization not to tell a better story. Yet fear of the unknown, anxiety about what's going to happen next and refusal to accept change continue to permeate behavior in the marketplace -- even despite signs of tenuous improvement.

You'll be comforted to know that there's now a better way to overcome this challenge. We are here to help tell how what you and your firm are doing can translate into better narrative with key constituencies, such as customers or clients.

While this may sound like an overly inward creative exercise, the truth is it's not. Effective narratives are only as relevant as what outside audiences want or need to know. The second truth is the normal tools such as press releases, canned speak, resumes/bios/CVs, Linked In updates and Tweets leave much to be desired when it comes to high-impact story telling. That's not taking anything away from all the channels being on; more to the point, it speaks to content that goes into the channels.

Consider a consultation if you're interested in learning how a process can work from a senior leadership POV. We will walk through the steps required, what a final product can accomplish and costs associated with the exercise. Here are several inflection points for when a new story typically has the most value:

1. Job and/or career change
2. New leadership position
3. New business strategy/direction
4. More actionable vision and shared values among a team

Thanks for your continuing support. May the New Normal exceed all previous expectations.

All the best,

JG

Jeremy Garlington
Point of View
Phone: 404-606-0637
Email: garlingtons@msn.com


P.S. If this doesn't interest or appeal to your needs right now, please consider forwarding the message to a senior-level leader who you think could benefit. Only personal one-to-one action makes a difference.

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Childish or Churlish?

So by now we all have our own POV about Wall Street, financial reform and the current standing of the bank otherwise known as Goldman Sachs.

No matter what we may think or believe individually, what passes by in the public square never ceases to amaze.

The latest case in point comes courtesy of a private equity executive who probably will wish that he wasn't quite as candid as he was after reading today's New York Times' Dealbook column, http://http//www.nytimes.com/2010/04/27/business/27sorkin.html?ref=business. Then again maybe he will simply rationalize the view deeper as fact. Who knows. Here's an excerpt:

"I don't want to use the word childish but...it's childish." That's how Kenneth Griffin, the founder of Citadel Investment Group described the Security Exchange Commission's decision to pursue a civil fraud case against Goldman for their role in creating a sub-prime investment that went sour...

Classic. I don't want to but will thanks to my vaulted position. But wait, it only gets better. Here's another excerpt (we strongly suggest reading the piece in its entirety for context.)

"...I think the Goldman case has clearly energized the Democrats with respect to passing the regulatory reform."

Fair enough. We're all entitled to an opinion. The fatal flaw in this type of thinking though is how it tends to create conspiracy theory. Follow the logic and see if you agree or disagree. By adding this last line, Griffin seems to be saying that the fact the SEC took this action means that political fallout and momentum behind reform legislation will increase. That may be the case, but by connecting two separate events, the belief now trickles into the widely mediated territory of fact. It also does not acknowledge any resemblance of fault by the original party, which in this case, is Goldman Sachs -- not the SEC or efforts to reform the system.

For another example that now seems like decades ago, consider the original case for the Iraq war, which unsuccessfully attempted to implicate Saddam Hussein with the 9/11 tragedy.

The gray area between fact and opinion is where efforts to solve a problem get horribly off track. To borrow an age old line, don't let facts get in the way of a good argument.

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Good paying work for Junior

Remember when we used to mow lawns and do odd jobs as kids? Those days seem to be gone forever in the executive sphere based on revelations from the banking pinata known as Goldman Sachs. See http://dealbook.blogs.nytimes.com/2010/03/22/the-perks-of-being-a-goldman-kid/?ref=business Pay levels and perks aside, did anyone stop to think how these revelations would play publicly following the Crash? Here's hoping Jon Stewart and the Daily Show have a funny take so we can laugh and move on. With health care now done, it's on to the financial sector.

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Why CEOs should not blog without facts

When the CEO of an acquired company starts saying things like, "are you ready for a brave new world?," employees know it's time to take cover underneath their desks. In the case of John Brock at Coca-Cola Enterprises (see the AJC's report, published earlier today at http://www.ajc.com/business/coca-cola-enterprises-ceo-382024.html,) it's our sincere hope that he and the acquirer, The Coca-Cola Company, can level with employees and cut through the happy talk. Information travels at the speed of light, and fortunately or unfortunately depending on your view, sheltered executives tend to be behind when it comes to understanding sentiment. Blogs in this context only amplify what's already unknown, versus providing context around what is known. Add in the greatest levels of fear and anxiety since WWII and you get an environment that demands truth, not rosy talk.

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Passion of the Work

Blogger and entrepreneur expert Ben Cansocha posted a great feature earlier this month on the fallacies of working with passion. He cited a seemingly contradictory excerpt from Steve Jobs' now famous commencement speech first given at Stanford University and now passed along on the Internet like a prosperity gospel. Here is Ben's post followed by an updated POV:
http://ben.casnocha.com/2010/01/the-contradiction-in-steve-jobs-famous-commencement-speech.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ItsLikeBensBlog+%28Ben+Casnocha%27s+Blog%29

Let's try a long winded question that cuts to the chase: How many people do you know who both love what they do, make lots of money, lead a balanced life and view their work as the primary channel of their "passion?" Is that your final answer?

Here's an updated view on the work with passion adage. Take it from someone who has now seen it from all sides: Personal experience, professionally helping others with similar issues and seeing through the views of everyone else inside the career complex.

Passion only takes things so far in the marketplace. You can be really good at something that you love to do and not receive adequate compensation due to factors out of your control. That's generally when the tough get going and find ways to adapt to meet need, which is always easier said than done. Some suspend passion and find ways to get through the lows of not being able to apply it as fully as originally intended. Consider Walt Disney and his many mini-foibles with animation and theater decades before Disney World ever existed. Others simply re-channel passions in other areas, such as hobbies, causes or ministries. Steve and Jean Case, Bill and Melinda Gates leap to mind here although admittedly those are some real stratospheric surface-oriented examples where passions follow great fortune.

Despite great commercial success, Goliaths such as Jobs have had to toil hard in the lab at times. Most business artisans view working with passion as a continuous series of experiments that may or may not have million dollar outcomes such as IPods or IPads. Taken in this context, maybe working with passion is a lifelong endeavor similar to faith? Who knows. What we do know is that the professional career complex latched onto this one during the go-go days of the Dot Com era. Those days are gone, yet the "work with passion" mystery remains. Beware of anyone who says they have this one figured out. Because they don't. It's simply not a black and white issue as painful as it is to admit.

I once posed the Passion question over a lunch with a prospective client who happened to be a mini-Hollywood mogul at the time. "So what's your passion?" He looked at me like I was crazy. Rephrasing the question, I tried another approach, "what gets you up in the morning?" His response, "I don't know. I've never had trouble getting up in the morning." Sold! Once he gave that response, we knew we had him on the hook.

If anyone would care to debunk this mystery further, please be my guest. Just please leave a few dollars on the blogging pillow.

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Bold truth -- from an unlikely source

Rarely has a bold truth come ringing out of a Sunday talk show during the holidays. And rarely have so few words implicated so many with such little fanfare.

As the usual year-end imagery gathers on TV and the Internet, it's highly unlikely the comments of Massachusetts Gov. Deval Patrick will make the final cut. That's too bad. Because what Patrick had to say about the past 10 years has deep implications for the next few.

Appearing on "Meet the Press" alongside New York Mayor Michael Bloomberg and pol Newt Gingrich, Patrick summarized the first stage of the new millennium as the "self deception decade." Y2K, threat of terrorism manifested by Sept. 11th, two wars fought on the cheap, housing/Wall Street bubbles, etc. Whatever we spent or did then was put off for tomorrow. Patrick predicted that the coming decade will be when we finally get honest and deal with the "intractable problems facing society."

Fair enough, Governor. You're a smart and admirable point-of-view public figure. But what you said strikes to the core of a much deeper issue that no one seems able to address -- much less solve.

A vast majority of leadership elites have grown to believe their own deception, making real connections with followers fleeting. Trust and confidence have been thrown out with the bath water. Innovation -- which Patrick said will characterize the coming decade -- gets tossed around in conversation like a worn out bromide while little changes. Consider the evidence. Government, despite a transformational president, remains the same both symbolically and systematically. Two of the recession's hardest hit industries, autos and banking, continue to maintain the status quo as evidenced by events at GM and Bank of America Corp. "Going green" remains just that as even Bloomberg confessed by saying "no one knows what that means." How the green movement hasn't been effectively connected to eliminating dependence on foreign oil tells all you need to know about how special interests engulf the present system.

Elites have grown oblivious to their own deception for a range of factors -- most center on self glorification vs. productive difference making on behalf of others. Case in point: What just transpired between Congress and the White House on health care reform. Note: This is not a policy indictment; more to the point, it's about acting above board when no one trusts what you're doing. Equal offenders from the political and business realm line both sides of this issue.

Huge sums of money also feed the beast called deception. A billion here, a billion there. No amount is too small. It's almost as if Monopoly money is being exchanged for derivatives to be paid later. Leaders have forgotten that it's the public's (taxpayers' and shareholders') treasure that they're manipulating for selfish personal gain. No accountability leads to zero correction; cycle continues. The passing of Sen. Kennedy over the summer served as a stark reminder of what a lifetime of public service entails. It's too bad his legacy has already been shuffled away in the Senate's coat closet.

Fortunately, or unfortunately depending on your view, the public is way ahead of the deception. They're furious, anxious and often perceived as irrational, which means they are irrational in a heavily mediated world -- or whatever passes for the nightly news.

The real question is what can be done. There are no easy answers, but it begins with calling out the issue. It's too bad we can't assign TMZ.com or the "National Enquirer" to the story because they would get to the bottom of the barrel in a hurry. Facts or no facts, the tabloid media, YouTube and other new outlets such as Twitter have a way of cutting through to the unfiltered core faster and better than anyone else.

Which brings us back to the future. Before we go further into the "honesty decade," as Patrick predicted, there's still a fair share of flushing out to do with the deception decade. Which means we'll probably keep throwing the bums out of office and tossing stones at CEOs in glass houses while little gets done. Some things don't change.

The only way to make a difference is by taking personal action and encouraging others to do the same. Not everything has to be about ME! Granted, until there is a sense of collective We, it's awfully hard not to look out for A-1. Especially when things are upside down economically.

Maybe the next 10 years will turn out to be the "Me to We" decade? Probably not. 'Mewee' sounds like a dumb Charlie Brown character. Oh well. Back to the drawing board for now. Welcome your ideas on a better name.

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Introducing the new Fleet BofA

Well, at least it's done. Bank of America Corp.'s board whiffed by selecting an insider/outsider, but thankfully, the publicly bungled succession process is finally over. Look soon for spin on the new Bank of America, which will resemble the old with a new "fleeting" influence. 'Fleeting' is a bad play on words referring to the strong influence of three former Fleet executives who currently sit on BofA's board and the new CEO, Brian Moynihan, who also formerly worked at Fleet. More things change, the more they stay the same. Prediction: The bank's board will be shopping for another CEO within a year's time.

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BofA: Where's the new CEO?

The Bank of America Corp. (BofA) CEO search drags on. First the board said through a spokesperson that they were going to have a candidate in October. Then Thanksgiving came and went. Now the deadline is first quarter 2010. According to the Wall Street Journal, the bank's board is meeting today but they likely will not be naming a new CEO. So what exactly are they doing: Hanging the stockings with care?

While the board deliberates, the usual vacuum gets filled with everything from potential candidates who won't take the job to how the bank paid back TARP money so they could attract the right CEO candidate. Pardon the blunt dismissal, but this latest mainstream revelation is dumb. No one at that level is going to make their decision based solely on money, and if they were, then they're not suited for what the job requires.

Managers take jobs because of money; leaders take jobs because of the ego-based challenge and then the money, which when you're a candidate for the top job at the nation's largest bank assumes you don't need a paycheck every 15 days. Of course this assumption could be wrong like most of the others during the Great Recession. But the rule generally holds true at the top rung.

Let's review a few key qualifications since the basics seem to have lost more interest than a C-SPAN rerun. Sooner board steps up, obviously the better.

1.) Proven leader, not another manager. The new CEO needs to be someone with gravitas and proven ability to navigate constituencies that some believe now poison the bank's dry well: Government regulators, Obama administration officials, investors and previous owners (latter two are one in the same but sometimes it's difficult to tell.) For anyone that still believes that the new hurler in chief will be a qualified manager from the inside, recall the baseball song about belly itchers and relief pitchers. One does not preclude the other. If that doesn't suffice then consider what the WSJ's Intelligent Investor had to say about the difference a new CEO makes in a company's profitability: http://online.wsj.com/article/SB10001424052748703735004574575880529756434.html?mod=WSJ_hpp_sections_personalfinance
Preview of answer: Not much. Difference is little more than a coin flip.

2.) Able to lead and build credible consensus in a new direction. The previous occupant, Ken Lewis, comes from the old command control school where oddly the new darling, GM Chairman Ed Whitacre, came from as well. That's not going to cut it. Key question: Who can marshall the capital, both human and financial, combined with the right strategy to move BofA forward in not only a different direction but an entirely new operating environment? Trust and confidence weigh heavily here but don't try telling that to the board, which hasn't exactly used this transition period to build either quality.

3.) Character as a tangible vs. intangible requirement. Okay, don't roll your eyes. While this qualification gets thrown around more than a bromide, reputation does matter. Or at least it should in this case based on the former occupant's behavior. In his "Eighth Habit," Stephen Covey cites a stat. that lends credence here: 90 percent of all leadership failures are due to character. Flaws, break downs, sacrificing values, etc. You would think that whoever takes the top job at BofA will need to be squeaky clean and politically astute. And no, those two qualifiers don't represent an oxymoron.

Good luck, BofA board. We look forward to hearing from you directly sometime through your Chairman or search firm. Tick-tock, tick-tock.

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Single holiday wish

Last week's headlines in The Wall Street Journal presented an all too familiar trend line. First came AIG's CEO complaining about pay restrictions while threatening to quit after only a few months in the job. He later retracted and said he was staying for now. Evidently the "war for top talent" rages on to the point where even a leader of a too big to fail enterprise feels compelled to cry wolf.

Then came reports of another candidate for the Bank of America (BofA) CEO job turning up his nose because reportedly $34 million in stock paid in another deal would not be paid out in full if he took the BofA position at a lesser grade. Why someone would view the position as just another notch in the money belt is more instructional than it should be. Evidently restoring credibility at the nation's largest bank and earning career making chops that goes with doing so aren't worth the advertised compensation.

Ah, yes. Unchecked self interest continues unabated in American executive circles. What a way to end the year during which many have lost but few have gained. I can hear the cries now, "But why shouldn't he command the most money? Aren't you a capitalist? Since when did the government start setting private sector pay levels -- that's SOCIALIST!"

Fair enough. Argue away. It's a free country. Just be sure to see both sides.

The message here is not about government control vs. impinging on capitalism. Far from it. That argument is way above our pay grade any way.

It's a simpler holiday wish: That those who continue to act exclusively in their own self interest (Hint: All of us at one time or another) reach out beyond themselves and lift up a fellow man or woman in need.

That could be as dramatic as helping someone in trouble, hunger or sorrow or as common as providing a personal endorsement to someone else who might qualify as a new potential customer or boss. Oh, and this means actually doing so directly, not writing a bunch of canned lullabies on Linked In.

If that all sounds too Pollyanna, then look at it this way: It's not just about my house or his house. It's about OUR house. This is as much a collective leadership message as it is request to act in a greater interest. If nothing else, can we at least set aside the market-based quid pro quo stuff for a couple months?

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Two Chicago Guys and a CEO Search

Left to right: Walter Massey (courtesy, AJC)
Charles A. Tribbett III (courtesy, Russell Reynolds web site)


Bank of America Corp. (BofA) Chairman Walter Massey has named Charles A. Tribbett III of executive recruiter Russell Reynolds to assist with the recruitment of the bank's next CEO, according to people familiar with the matter. Efforts to confirm Tribbett's selection with a firm spokesperson were unsuccessful as of 5 PM EDT. News of the recruiting firm's appointment minus the personal name of the lead recruiter was first reported earlier today at http://www.wsj.com/ -- http://online.wsj.com/article_email/SB125545433529782763-lMyQjAxMDI5NTE1MzQxNTM0Wj.html

This decision signals deep local ties between two power brokers while underscoring the emergence of Chicago as an epicenter of influence in national political and business affairs.

It also sends mixed signals on whether BofA will consider internal candidates for the CEO position following previous reports speculating on where the bank will turn for talent.

Tribbett is the Chicago-based, domestic co-head of the CEO and board practice for privately held Russell Reynolds. Prior to joining the firm in 1989, he was a partner with Abraham & Sons, a private investment management and brokerage firm in Chicago. Tribbett also served as a corporate securities attorney with the law firm of Skadden, Arps, Slate, Meagher & Flom. He currently serves on the boards of Northern Trust Bank, Chicago Symphony Orchestra and the Chicago Council of Global Affairs, an "independent non-partisan organization" representing a Who's Who of Chicago, including First Lady Michelle Obama who is listed as a lifetime director on the organization's web site.

In addition to his chairmanship at BofA, Massey serves on the board of Oak Brook, Ill.-based McDonalds and is a trustee at the University of Chicago. He also formerly served on the board of Delta Corp. and First Chicago Corp. after a series of executive positions in higher education. According to the Atlanta Journal & Constitution http://www.ajc.com/business/massey-s-final-bank-159534.html, Massey and his wife, Shirley, currently live near the University of Chicago and the Argonne National Laboratory where he served as director.

It's not entirely clear where Tribbett will look to fill the CEO position of the nation's largest bank based in Charlotte, N.C. But one thing is clear: A closely related web of board and civic relationships between Tribbett and Massey will strongly inform who ultimately fills the position. Always has, always will.

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BofA: Will grits remain thicker than water?

So week two drags on with the Bank of America Corp. (BofA) governance mess. The bank and its board remain under attack from every conceivable angle, leading to snap decisions such as on/off the shelf "emergency CEOs" that few understand much less believe to be part of a real solution. Mainstream media continue to speculate on the horse race or who will fill the role vs. what is needed to right the course.

Until someone steps up and actually says, "Stop, wait a minute! We're headed in the wrong direction," nothing is going to change. Which unfortunately means, for viewers of similar movies, nothing will change about this one's ending. Not even the credits.

Call it board leadership 101 failure for lack of better terminology. Nothing good happens when a gun is held at someone's head -- at least from a non-criminal point of view.

This reactive vs. proactive stance points directly to a deeper set of questions that needs to be answered before going any further in the CEO selection process.

Will BofA continue to be defined by an aggressive southern culture created by Hugh McColl and then leveraged by Ken Lewis? Is it time to turn the history page and step up as the nation's largest and most responsible bank in the post-collapse era? To borrow a witty phrase from a friend, will grits remain thicker than water?

None of the internal candidates publicly identified so far represent the bank's current culture yet BofA remains largely known by its Charlotte way of doing things. This fact leads to even more questions: Should the bank shutter its headquarter roots and move to New York where it can deal with regulators and other constituencies more directly? Will the new CEO have the external chops to deal with what's most important vs. urgent, or will the bank sink into the quagmire of a quasi-governmental agency?

No one, including board chairman Walter Massey, has stepped up to demonstrate a firm grasp of these issues. Every move so far has been bureaucratic in nature and defensive considering what's at stake. Sending signals that it will likely turn to an inside hand to stir the grits is hardly bold action. Nor does it make much sense unless they're not serious about change, which is always a real possibility.

Heck, even the now defunct GM board delivered clearer signals when they were slipping toward bankruptcy. BofA remains solvent, profitable in some business lines yet severely leadership challenged at the top, which is generally where it counts the most. Meanwhile, competitors such as JP Morgan Chase and Citi are licking their chops.

Here's hoping BofA deals with its leadership issues in a manner befitting a large corporation. If they can't, then owners should be demanding better -- across the board.

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BofA: Let the horse race begin

Publisher's note: The following was first published today on BusinessWeek.com under their ManagementIQ blog heading. Find the direct link here http://www.businessweek.com/careers/managementiq/archives/2009/10/moment_of_truth.html. Or feel free to read on below.
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Whoever fills the CEO role, while sexy and headline grabbing, is not the most pressing need at the nation's largest bank. What's more important is how the BofA board decides to proceed with righting the bank's leadership course. This obviously includes the coveted prize, a new CEO, but to emphasize that decision at the expense of other more important matters represents bad governance. It also underlines the misguided longly held belief that great talent will solve everything.

Following are several steps that the bank's board should be considering if they're not already:

1. Replace the Chairman. Board Chairman Walter Massey is now inextricably linked to the former regime as a result of ongoing litigation, government investigation and personal relationship. This is a perceptual non-starter. It also represents a serious first challenge for the board to answer. Massey's tenure has been brief and was given rise to a previous crisis wave when investors forced Ken Lewis to sacrifice the Chairman title. The law of unintended consequences has been cruel here so far. Whether Massey can help right the course when he himself is under attack should be the board's first order of business.

2. Find a way forward, or out, of the regulatory and judicial jungle. New CEO or no new CEO, BofA needs to move expeditiously with trying to reach settlements across the board on all current legal matters. This may sound too ideal or pie in the sky. But even a better faith effort would send a stronger signal. Within this effort also lies a key competency for a new CEO. At least three quarters of the current leadership mandate is making sure the cloud that currently engulfs the bank is lifted.

3.) Consult Jamie Dimon at JP Morgan Chase. This step is more search-driven than strategic, but it's a practical step that only the truly hubris free will consider. Dimon has led an extremely successful, similar sized operation during a similar period of upheaval. No one else has the same knowledge or experience to deal with what faces BofA. To not consult Dimon on who he thinks would be a gross oversight. You can be assured of at least one thing: Whichever high end recruiter gets the assignment will take this step while simultaneously trying to woo talent away from underneath Dimon's nose.

This isn't about wasting a crisis or trying to bring Superman to lead the nation's largest bank. It's about doing what's right in the wake of months of misdeeds and leadership inertia.

If there is a silver lining, it's the fact that BofA's business appears to be on better footing than a year ago when the system collapsed. Yet unfortunately in this case that also speaks to a bank's greatest self perceived advantage: Time. Time to recover. Time to take more government money. Time to see assets come back. The more time a bank has, the longer it can live. Vice versa, the longer it can continue to do nothing and watch its once vaulted status nose dive into the abyss. Any of the major banks that neglects this consumer reality does so at their peril.

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BofA Chairman forms search committee

Bank of America Corp. (BofA) Chairman Walter Massey has formed a search committee to find a new CEO to replace Ken Lewis, according to people familiar with the situation.

Two executive search firms, Spencer Stuart and Heidrick & Struggles, reportedly are in the running to present qualifications to the committee. Spencer Stuart has been working with BofA on board selection matters since earlier this year. Heidrick & Struggles has assisted the bank with management selection and recruiting senior-level managers over the course of the past decade.

BofA has added nine new board members in 2009, replacing former directors such as lead chair Temple Sloan and (Ret.) Gen. Tommy Franks with new members, including Dupont Chairman Charles Holliday who was named last month and four other directors who were named in June. This follows the addition of three new Merrill directors who joined the board in January. The bank also recently hired former Citi executive Sallie Krawcheck to run its global wealth management and advisory business while also consolidating several other senior roles in the bank's global consumer and investment units. Whether Krawcheck will be considered as an internal candidate to replace Lewis as CEO remains unclear.

The bank has no official CEO succession plan in place, nor does it have a contingency plan should current management face indictment as a result of ongoing litigation. Both Lewis and Massey have been subpoenaed in an ongoing investigation into the Merrill Lynch acquisition by New York Attorney General Andrew Cuomo. They also have been named as individual parties in an Ohio lawsuit, which seeks damages resulting from alleged misrepresentation of shareholder interests.

The combination of disarray at the highest governance levels, addition of nine new board members in a single year and the perceived taint hanging over the current day-to-day regime strongly suggests that BofA will turn outside the bank to find new leadership.

Whether that translates into a short-term or long-term CEO remains open to speculation until an interested and qualified candidate surfaces. Such a candidate will be expected to meet the strong approval of both the bank's overhauled board, key investors such as former Chairman and CEO Hugh McColl and the federal government.

BofA's two clearest options to fill the CEO post include:
1.) Bill Winters, former co-head of JP Morgan Chase's investment bank. Winters left Chase earlier this week following an executive shake-up. Winters played a pivotal role in the bank's success and had a birds-eye view of how his widely respected boss, Jamie Dimon, led during a similar period of upheaval. For a good summary, see http://blogs.harvardbusiness.org/cs/2009/10/what_the_jpmorgan_chase_shakeu.html. Dare we suggest Dimon himself to rescue the country's largest bank? According to the attached piece, his chief regret seems to be not serving his country. Ah yes, life is good at the top.

2.) Naming one of the current new "insider/outsider" board members as CEO. Spencer Stuart followed the same model at Delta when Richard Anderson was named CEO after joining the board prior to becoming the airline's top executive. This practice has grown increasingly common for boards and companies facing turmoil. Success depends largely on transparency and how relationships on the board coalesce around a chosen leader.

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