Thursday, February 4, 2010

Rohatyn Returns to Lazard

Felix Rohatyn has returned to his old stomping ground, Lazard. He rejoined the firm on Feb. 1 as a special advisor to Chairman and CEO Kenneth Jacobs.

Directors & Boards lead columnist Hoffer Kaback had the pleasure of visiting with Rohatyn to do a Q&A cover story that appeared in the Spring 2003 edition (cover pictured). What boardroom experience to draw upon! The famed financier and strategic adviser's past directorships included ITT, MCA, Owens Illinois, Pechiney, Pfizer, Schlumberger, American Motors, Avis, Eastern Airlines, and Comcast. At the time of the interview, his board seats included Fiat, Suez, LVMH, Publicis, Lagardere Group, and EADS (owner of Airbus Industries). Three choice nuggets from the interview:

On corporate crises: "The reason I believe things are usually worse than they appear is because people don't tell the CEO everything. Things get bad because people are not reporting that something's out of control or that something isn't working. By the time things come up to you as the CEO, they're a lot worse than they appear on the piece of paper that comes to you."

On his early days on boards: "I first learned about corporate governance when I went on the board of Avis in the 1960s, when Lazard bought control of Avis. It was a public company, and we owned around 20% or 30%. I learned about corporate governance from the perspective of an owner, really, which is actually a pretty good perspective. I learned about other people's views about the role of directors. We had a very iconoclastic chief executive, Bob Townsend. He said to me, 'A really good board is one that only reduces the efficiency of the company by 20%.' "

On accepting a board invitation: "You don't go on a board — nor should you go on a board — if you don't know the people. Because your only real protection against a Tyco or a WorldCom or an Enron is the ethics of the other members of the board and the management, the competence of the management, and the culture of the company."

The storied dealmaker had his own firm, Rohatyn Associates, at the time of this interview. He did not come back to Lazard after returning as U.S. ambassador to France in 2000. I 'd be remiss if I didn't share one dealmaking anecdote he told for our article:

"I remember one person came to hire me to be his financial adviser (this was when I was still at Lazard) and I said, 'Look, I don't really understand your business well enough; you should go someplace else.' He came back and I took it on, and we finally had to sell the company to somebody who made a hostile bid for us. I said, 'You should take it. The more quickly you take it, the better.' He was very unhappy with that. Finally, that's what we did, and it was the right advice. Afterwards he said to me, 'I don't quarrel with your advice; I just quarrel with your bedside manner.' "