JP Morgan: It May Take Two

 JP Morgan: It May Take Two

THE PR VERDICT: “D” (PR Problematic) for JP Morgan. (Pictured: JP Morgan CEO Jamie Dimon.)

Megabank JP Morgan hit the headlines over the weekend with news that it was mobilizing its senior management to defeat a shareholder vote on corporate governance. In advance of a vote at next month’s annual meeting, board members are planning to sit down with some of the bank’s biggest shareholders, encouraging them to block a motion to separate the role of CEO and Chairman.

Momentum for the proposal has gathered steam following the losses from the London Whale trading episode and JPM’s nearly $6 billion in losses. Fairly or unfairly, questions about the CEO have been raised, and whether or not it is possible to manage a firm of JP Morgan’s size. Following some recent ugly congressional hearings, the new catch cry is not only too big to fail abut also too big to manage. This recent suggestion, to split the current Chairman/CEO role into two is an attempt, so say its proponents, to get another set of eyes overseeing day-to-day management.

The Board of JP Morgan isn’t in favor of the change, while press reports have CEO Jamie Dimon being alternatively sanguine about the proposal or threatening to leave, if the motion is approved. To avoid ongoing external scrutiny and to appease fierce critics in Washington and elsewhere, this may be one battle not worth fighting.

THE PR VERDICT: “D” (PR Problematic) for JP Morgan and its decision to oppose suggested governance reforms.

THE PR TAKEAWAY: Give an inch to keep a mile. It’s not really clear what JP Morgan’s objections are to splitting the role of CEO and Chairman. It is, after all, a structure that is already in place in many companies around the world, and splitting the roles is generally perceived as a desirable safeguard. For a firm that has been dragged through acres of tough media coverage about its internal management controls, this might have been one relatively painless and not unreasonable concession to make. Another financial loss or management failure around the corner, and JP Morgan may rue the day it so vociferously opposed such a modest reform.

Former Citigroup CEO: “Too Big” Can Fail

 Former Citigroup CEO: Too Big Can Fail

The PR Verdict: “B” (Almost a Winner) for Sandy Weill, who has joined the chorus of concern about the “too big too fail” banking ethic.

So Sandy Weill, Citigroup’s former CEO, is now conceding that what he spent his lifetime proudly building maybe wasn’t such a great idea after all. The former architect of megabank Citigroup stunned the market this week with his observation that banks may be too big to manage. Why not split up investment banking from regular banking, he suggested during an interview on CNBC. Weill revealed a new mantra: bigger may no longer be better.

Quite a volte-face from the man who fought tooth and nail for the repeal of the Glass–Steagall Act, which previously drew a line between commercial and retail banks. Visitors to Weill’s offices when he was at Citigroup could feast their eyes on a proudly-displayed plaque that read, “The Shatterer of Glass Steagall.”  Back then, Weill and his peers credited themselves with creating a brand new banking world.

Why turn back the clock now? As an explanation, Weill’s was masterful in its positioning. Nothing wrong with what he did at the time; it’s just that well, NOW, the situation has changed, Weill explained. This was not an admission of personal responsibility–just that what was once right at the time is “not right anymore.” That was then, this is now.

The PR Verdict: “B” (Almost a Winner) for Sandy Weill, who has now joined the chorus of concern about “too big too fail”. Weill has done a neat (albeit cynical) job of personally shifting from “man in charge” to curious bystander.

The PR Takeaway: Context gives plenty of air cover. By concentrating on the macro, not the micro, Weill has moved into the debate without any personal admissions of failure. This was about what works in the market and nothing to do with his own personal role in the crisis.  Not really a change of heart, more of an update about what the markets are saying.  That makes it so much easier to swap sides and means he can now sit with the cool kids at the school cafeteria.

What’s your opinion of Sandy Weill’s about-face on banking? Give us your PR Verdict!

How Will Citigroup’s Sandy Weill be Remembered?

sandyweill2 How Will Citigroups Sandy Weill be Remembered?

PR Verdict: “F” for Sandy Weill and his attempt to be secure a kinder slot in the history books.

How will history remember Sandy Weill, the former CEO of Citigroup and architect of the largest financial services firm that nearly went under?  Judging by a recent article published in Fortune, if he has his way, he would like to be remembered as a visionary philanthropist.  History may not be so kind.

In an embarrassingly soft-ball article, the former CEO waxes lyrical about his philanthropic endeavours for the first part of the interview.  These include the creation of the National Academy Foundation as well as generous contributions to the arts and healthcare, obligingly listed by the magazine.

As for the tough questions about the near collapse of the financial system, his own bank’s astonishing destruction of value and the excesses of executive compensation, Weill says nothing of any interest.  Given his experience and formerly revered status, now was the time, at the age of 79 to rescue an irredeemably doomed reputation.  Regarding executive compensation Weill sounds more like a PR intern working on a draft Q&A, opining,  “people should be paid appropriately”.  He adds that fixing banks that are  “too big to fail is a problem” but offers no solution or insight.  He concedes that “people made mistakes that created issues” but blithely adds “it’s time to move on.”

PR Verdict:  “F” for Sandy Weill and his attempt to secure a kinder slot in the history books.  Speaking in generalities and turning attention to philanthropic endeavours will not redefine a hopelessly damaged reputation.

PR Takeaway: If you want to change a point of view say something surprising.  Salvaging a reputation requires more than throwing money at charitable causes.  At Weill’s venerable age he has nothing to lose. Why not make some radical fundamental observations while also acknowledging some personal role in the crisis? It might have given him the reputational rewrite he seems to crave.   Next time have a look at Warren Buffett for some pointers on how to make people sit up and listen.

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