On Thursday a number of CEOs including Berkshire Hathaway’s Warren Buffett, General Motors’ Mary Barra, and Larry Fink, the CEO of BlackRock all got together and signed a letter listing a bunch of ways to improve corporate governance in America.
And JP Morgan’s CEO Jamie Dimon also signed the letter, which is odd, since the very first suggestion is:
- Boards of directors should be truly independent from the company and meet without the CEO present on a regular basis.
In an interview with CNBC following the letter’s publication, Buffett said that it was Dimon who rallied him to the cause about a year ago. And that’s weird. Here’s why:
Dimon is both the CEO and Chairman of JP Morgan, and that’s not an accident. Through the years has fought hard to maintain complete control of his massive international corporation. That’s what makes suggestion #1 so very interesting.
Do as I say, not as I do
I think you’ll all recall the so-called “London Whale,” the 2012 JP Morgan trading disaster that blew a $6 billion hole in the bank’s balance sheet. Heads rolled, including that of CIO Ina Drew. Dimon was forced to head down to Washington and explain himself to Congress how one trader could lose so much money in his house.
It was a very public, very embarrassing display of arrogance and mismanagement, and shareholders were rightfully angry. That is why at JP Morgan’s 2013 shareholder meeting shareholders took up the unthinkable — they considered whether or not the split the roles of CEO and Chairman of the Board at the bank.
Dimon was furious. He threatened to abandon the bank entirely if he lost control of the board.
But he didn’t. Dimon went to war, and he won. The Wall Street Journal crowned him on its pages, and a year later he was telling his peers that his reign over JP Morgan would continue for at least five more years.
We reached out to JP Morgan via email and have not yet received comment from the bank. This post will be updated if they respond.
To be sure, Dimon helped JP Morgan through one of the most dangerous times in the history of American capitalism. He has the respect of Wall Street and Washington, and perhaps because of that, he thinks of himself as the exception to this new rule he’s suggesting.
And maybe he is. But acting above the fray isn’t going to instill confidence in his fellow CEOs who may, unlike him, be mere mortals.
Instead, they’re going to be sitting in their C-suites rolling their eyes and thinking, “You first, Jamie.”
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