I hate to see a past Directors & Boards author getting beat up in the press. That's what has been happening to Ken Lewis. The Bank of America chairman and CEO, who graced our cover three years ago as a paragon of good governance thought leadership, has taken a pummeling this week. No CEO wants to be on the receiving end of a gut punch like this one from the breakingviews.com news and views service.
Here is the thought that I had when digesting what happened to BofA re the Merrill losses disclosure in December, after the shareholder votes were in. When Paulson and Bernanke were apparently browbeating Lewis into going through with the Merrill acquisition, maybe this is what Lewis should have said:
"Listen, guys, I have to go back to my owners on this. You can't expect me to make this decision on my own. Haven't you heard — the age of the Imperial CEO is over. It's not my company. I know if I tell my board — oops, the board — that we should go through with this, they'll bless that decision. But let me at least fully disclose the changed circumstances to the shareholders. They own the company, believe it or not. Let the chips fall where they may, but they should make the final call on going through with this deal."
Not a bad retort. Maybe a bit naive, considering what this broken deal might have done to shatter already bleak and fragile circumstances as 2008 was coming to a close. And it's certainly idealistic as to best practices in corporate governance.
But Lewis might have brought with him to his meeting with the Treasury Secretary and the Fed head a copy of the Third Quarter 2006 edition of Directors & Boards, and pointed to the concluding paragraph of his authored article.
He would have done a great service to the shareholders by reminding himself, as well as the government biggies, of what he wrote then: "My hope for all of us is that we will find the courage and the wisdom to perform both of our primary functions as directors with equal skill — that of protecting wealth, and of building it for future generations."