Carol Realini is a successful CEO, entrepreneur and board member with technology and financial services industry experience.
She is a globally recognized technology innovator and has successfully led companies through initial public offerings, as well as into acquisitions. She is driven by a passion to improve people’s lives through technology.
In this extract from her groundbreaking book BankRUPT (April 2012), Carol compares and contrasts the behaviour of Steve Jobs on his return to Apple in '97 with the actions of the leaders of America's Superbanks since the credit crunch.
There is a lot of press coverage of the multi-million dollar salaries of the bank CEO’s.
Mostly it’s a lot of criticism.
I don’t think the average American cares about executive compensation in general; but in this situation it seems to be indefensible. How can people make so much when they are not creating value for their customers and have mediocre returns for their stockholders? Why should they make huge packages while they are managing their bank into the crisis?
I am a proponent of a CEO modeling the way.
Not just in how they get paid, but how they talk about their mission and vision. Once their mission and vision is updated to include serving their customers, then the compensation for them and their team needs to reflect that as a key objective. What if a bonus criteria depended on a customer service rating of 5 out of 5. Or if bonuses were tied to lowering the number of foreclosures this year – not by market forces but by how the bank was doing things to help people save their homes whenever possible. That would have some many benefits – including bringing back good values to the bank culture.
These once great banks in crisis need a leader like Steve Jobs who will define a new better mission and vision, innovate to go from vision to results, and be completely committed to making the banks great again. Steve did that, not for the money, but for the love of the company. Banks need a Wall Street Steve Jobs. Just one needs it – because it will force the others to have to innovate to keep up.
The Composition of the Boards
In 1997, as a condition of his return to Apple as CEO, Steve Jobs demanded the resignation of every board member.
The then members had overseen the decline of the company and Jobs felt strongly that rebirth would need a very different board consisting of people who would contribute to making Apple great again.
At the time, little did anyone realize how great the company would become.
How have the superbanks responded to the mortgage meltdown and federal bailouts? Several top banks have made a number of board changes.
Since the beginning of the financial crisis some superbanks have aggressively rotated board members, while others, most notably JPMorgan Chase, have clung to their entrenched veterans. Has it made any difference? Bank of America, which has nine new board members out of thirteen, is considered by many to be the poster child of arrogant bank behavior in the post-meltdown era. Somehow, unlike the example of Apple, the introduction of new board members seems to have made very little difference.
When you look closer you see boards that still consist of big company executives and industry insiders. The question is – are any board members innovators, or from an innovative industry like technology or mobile telecom? Who can advocate for the customer of the banks? Who can even personally relate to the banking experience of American’s consumers or small business?