“My View” from the May 15, 2012 edition of “Viewpoint with Eliot Spitzer.”
Last night, I talked about a conflict of interest for Jamie Dimon: There’s no way the head of JPMorgan Chase should also sit on the Board of Directors of the Federal Reserve Bank of New York. That’s who’s supposed to regulate what Dimon’s bank does. It’s the organization he lobbies to relax its rules. And we should all be outraged this conflict has continued.
Tonight, I want to talk about another conflict of interest for Jamie Dimon: There’s no way the CEO of JPMorgan Chase should also be the bank’s chairman of the board.
Here’s a simple question: What’s one of the primary jobs for a corporate board? Answer: to pick the CEO and evaluate the job that person does. So would it make any sense for the CEO to be the same person as the board’s chairman?
Of course not. Then why do so many companies allow this? Because shareholders don’t stand up and exercise their rights as owners of the companies.
Today, at the annual JPMorgan Chase shareholder meeting, a resolution called for separating the job of chairman from the job of CEO. It should have passed, especially in the midst of all this rightful upset over Dimon’s management. But only 40 percent of shareholders voted for it. And the company itself says Dimon is the best person for both positions.
It simply defies logic.
Decisions like this mean that people who benefit from the current arrangement can keep maintaining the status quo. Dimon doesn’t mind being the one to evaluate his own job — just like he doesn’t mind sitting on the board that sets the rules for his own bank.
Look, separating the chairman and CEO positions won’t change the world of corporate governance. But this story illustrates an amazing blind spot in our corporate culture. Dimon and others won’t even fix this simple and obvious conflict of interest — what a cloistered world they live in. Separating the chairman and CEO slots would show that Dimon and others at least see the problem and are beginning to learn from their mistakes.
That’s “My View.”