Interview Joe Ackermann – Credit Suisse, how could this happen?

By April 19, 2023 No Comments
credit suisse

Interview Joe Ackermann – Credit Suisse, how could this happen?

Last Sunday, Joe Ackermann, former CEO of Credit Suisse and of Deutsche Bank shared his findings on the demise of CS.

In an interview lasting almost 1 hour, he reflected on the fact that, as perennial number 2 on the Swiss banking site, CS had gone all out to become number 1 – with all the risks involved.

Five years ago, the CS-UBS ratio was 42-58, now at takeover it was 5-95.

Social media, digital banking and the inability to respond to it adequately led to CS’s rapid demise at the critical moment.

What is particularly interesting is the role of the “Verwaltungsrat” in combination with the “Geschäftsleitung”.

We would say Supervisory Board and CEO/Management.

But in Switzerland, the role of the “Verwaltungsrat” is much more far-reaching, and it is also legally stipulated in Swiss Law – the “Verwaltungsrat” has a decisive role in the Bank’s strategy and culture determination. Therefore, the “Verwaltungsrat” has not slept on supervising, but has actively participated in the CS’s strategy.

In corporate governance in the Netherlands and elsewhere, the question of how close to the director’s chair a supervisory board may and/or should be is often considered. Supervision should not become management is the generally accepted view.

And that seems to me a correct principle – otherwise supervision fails.

The CS situation shows what can happen when the supervisory board actively sets strategy and culture and sits in the driver’s seat.

How close is your supervisory board to the management seat?

The interview also includes discussion of failing external supervision, the comparison of football and banking and the statement when in Rome do as the Romans do – definitely worth watching!