One of the leader articles in today's Financial Times is very well-written. It highlights the boardroom failures, and particularly the failure of the non-executive directors, at Lloyds Banking Group.
The article highlights a string of corporate governance errors made by the Lloyds board, which since September 2009 has been chaired by Sir Win Bischoff, a former Citigroup banker. As I have pointed out in an earlier blog post, Bischoff is a man who is easily misled.
The FT suggests that Bischoff, formerly with Schroders, and his boardroom chums at the Gresham Street-headquartered Lloyds have made a number of catastrophic errors.
These have included:-
(a) They hired António Horta-Osório, a man who lacked appropriate experience of running a large and complex bank with challenging 'legacy issues' like Lloyds, as chief executive.
(b) They allowed Horta-Osório to alienate most of the bank's senior management by appointing several of his Iberian cronies, now known as the 'conquistadores derrotados' (failed conquistadors) to senior roles at the increasingly dysfunctional banking group.
(c) They failed to recognise that these 'conquistadores', who have been hired at great expense, owe their loyalty to Horta-Osório and not to the bank, and will probably leave when Horta-Osório does (i.e. soon).
(d) They placed too much faith in their chosen CEO and gave him too much autonomy.
You can read the FT article here.