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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