Bank of America (BAC)
Bank of America has definitely had its share of bad press over the last year. The banking giant just can’t seem to please investors or regulators. Everyone has been looking for someone to blame for BofA’s recent issues and Ken Lewis has consistently been named as one of the primary problems. Well it looks like Mr. Lewis has had enough. The CEO has informed the bank’s board of his decision to retire, starting Dec. 31. Some are rejoicing about the recent annoucement while others believe that his departure will leave the company in a worse position. Was this the right time for the CEO to pack up his office and head for the nearest exit? Who can take charge at Bank of America?
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Regardless of how bad a job people feel Ken Lewis has done, this was not the right time for the bank to lose its CEO. Before the rug was pulled from under Wall Street, Ken Lewis was considered a brilliant visionary and a confident risk taker. Critics of the CEO have forgotten that this is a man that almost single-handedly helped grow the Charlotte, N.C.-based lender into the powerhouse it is today. All those praises and accomplishments went right out the window after several decisions the CEO made, including the purchase of Merrill Lynch, came under fire. BofA is currently facing regulatory investigations, demands for more information regarding billion of dollars of bonuses that were paid out, and a broken relationship with regulators. All these issues have been linked back to the leadership skills of Mr. Lewis so he really needed to stay on as CEO until all this was sorted out. On the flip side, maybe the vision of a new CEO will help the bank alleviate some of these growing issues and take a step in the right direction. After all, Ken Lewis has been trying to straighten out some of this mess for months now, but without any success.
Rumors of possible successors have been swirling ever since the resignation announcement was released. The decision blindsided the board and quickly forced it to consider whether it should appoint a temporary chief-executive replacement. Since the board is under a time-constraint now, the named successor may not be the best option for BofA and that can lead to a whole new list of problems. A lot of the possibilities include former executives that have fallen from grace during or after the financial crisis. It looks like the board may be in between a rock and a hard place. It can either appoint someone new that may not have a lot experience running a powerhouse such as BofA or it can go with someone that does have the experience, but ended up failing during the financial crisis. The future of Bank of America is very cloudy. New leadership may be just what the doctor ordered or it may add some more problems to an already long list. The only thing people can do is hope that the next leader will avoid the same mistakes that Mr. Lewis made.
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