So a bank CEO walks into a board meeting and tries to explain its toxic assets or broad recovery plans. His audience: a few of his underlings, three academics, two golf buddies, a fellow Princeton alum and a brewery executive daydreaming about the free cookies they’ll get when he’s done.
Good thing CEOs never tell their boards anything important.
But even if they evolve to be more than a rubber stamp as the Obama Administration pushes the major banks to beef up their director ranks, it’s amazing that so few have real financial industry experience.
Bloomberg columnist David Reilly did the maths himself and had a startling discovery:
Only about 15 per cent of directors have banking experience at the 10 largest U.S. commercial banks by assets, according to my own analysis. Include directors with investing, accounting, insurance or real estate backgrounds and the rate creeps up to only 33 per cent.
In fairness, Reilly reports that Citi appointed four new directors with significant banking or investing backgrounds, and Bank of America Corp. is likely, under duress, to expand banking experience on its board.