This plan to fix corporate America is very rich coming from Jamie Dimon
REUTERS/Keith Bedford
On Thursday, numerous CEOs including Warren Buffett of Berkshire Hathaway, Mary Barra of General Motors, and Larry Fink of BlackRock all got together and signed a letter listing a bunch of ways to improve corporate governance in America.
JPMorgan 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 after the letter was published, Buffett said Dimon was the one who rallied him to the cause about a year ago. And that's weird.
Here's why: Dimon is both the CEO and the chairman of JPMorgan, and that's not an accident. Through the years Dimon has fought hard to maintain complete control of his massive international corporation. That is what makes suggestion No. 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 JPMorgan trading disaster that blew a $6 billion hole in the bank's balance sheet. Heads rolled, including that of chief investment officer Ina Drew. Dimon was forced to head down to Washington and explain 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 shareholders at JPMorgan's 2013 shareholder meeting took up the unthinkable: They considered whether to 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 JPMorgan would continue for at least five more years.
JPMorgan did not immediately respond to an email requesting comment; this post will be updated if we hear back.
To be sure, Dimon helped JPMorgan 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 is suggesting.
And maybe he is. But acting above the fray will not instill confidence in his fellow CEOs who may, unlike him, be mere mortals.
Instead, they will be sitting in their C-suites rolling their eyes and thinking, "You first, Jamie."
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