The virtues of recycling have their limits. Recycling waste like cans and bottles is good, but recycling ousted executives and directors who allowed an entire company (nay industry) to waste away is bad. Evidently, this point may be lost on the financial services industry, which continues to hire old friends rather than tap fresh blood.
The latest familiar face possibly returning to finance is former Citigroup Inc. (NYSE:C) chairman Sir Win Bischoff, who was ousted earlier in the year during the height of the credit crisis. Despite his involvement with one of America's sickest banks during the run-up and amid the credit crisis, Lloyds Banking Group plc (NYSE:LYG) reportedly is considering tapping Bischoff as chairman of the firm. In fact, the stories from the London papers (most notably the Guardian and the Telegraph) crow about the virtues of his prior experience as an investment banker.
As one might expect, the news has some commentators apoplectic with outrage. Look no further than Wall Street Journal columnist Simon Johnson's Heard on the Street article, which said:
Sir Win's appointment would be questionable for two reasons. First, he was a long-standing director of Citigroup during the boom years, making him party to one of the more spectacular financial failures in history. Sir Win was even chairman of Citigroup from 2007 until his eventual removal last year following pressure from shareholders and the board amid concerns he wasn't providing sufficient oversight. That's hardly a recommendation for one of the trickiest jobs in U.K. banking.
Granted, recycling an old name should come as little surprise. After all, the financial services industry has yet to boot the executives leading some of the sickest institutions. In the U.S., both Citigroup CEO Vikram Pandit and Bank of America Corp. (NYSE:BAC) CEO Ken Lewis remain at the helm. - Matthew Wurtzel
See Heard on the Street story from The Wall Street Journal
See story from the Guardian
See story from the Telegraph
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