The Chairman of the Board of Directors of Credit Suisse actually wanted to reform the bank’s risk management and culture – now he is stepping down.
(Photo: Reuters)
Zurich The new year begins with a bang at Credit Suisse: António Horta-Osório, Chairman of the Board of Directors of Credit Suisse, resigns. The chief controller, who started to realign the bank after a series of scandals, stumbles on an affair about non-compliance with quarantine regulations. Credit Suisse has appointed board member Axel Lehmann as his successor, as the company announced on Monday night.
Horta-Osório said: “I regret that some of my personal actions have caused difficulties for the bank and have affected my ability to represent it internally and externally.” He is therefore convinced that his resignation is in the interest of the bank.
According to the announcement, the bank’s board of directors is to propose Lehmann for election as chairman of the board at the general meeting on April 29. With the appointment of Lehmann, Credit Suisse is ending the experiment with a chairman of the board without intimate knowledge of Zurich’s financial center after less than a year.
Lehmann spent years at competitor UBS and made a career. There he was last on the board responsible for the core business in Switzerland. He is also considered an expert in risk management and was the top risk manager at Zurich Insurance until 2015. He only moved to the supervisory board of Credit Suisse last year, where he was responsible for risk management control. It is now up to him to bring calm to a bank that has been in permanent crisis mode for years.
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The affair that cost Horta-Osório his job was triggered by a violation of quarantine regulations in Switzerland. The Portuguese manager traveled from London to Zurich at the end of November and flew on to the Iberian Peninsula a few days later. At that time, Switzerland had Great Britain on the corona warning list because of the spread of the omicron variant. According to Swiss law, Horta-Osório should have been in quarantine for ten days, as the Swiss newspaper Blick revealed.
Lack of support from the bank
In his public apology, Horta-Osório was also entangled in untruths. According to media reports, an investigation by the board of directors revealed another violation in Great Britain. Instead of going into quarantine after entering London, the top manager attended the final of the tennis classic Wimbledon.
However, his resignation comes as a surprise: at the end of December, the major shareholder Harris Associates had signaled its support for Horta-Osório. In response to the double debacle at Credit Suisse involving the Archegos hedge fund and the Greensill funds, the former Lloyds CEO had taken up the cause of reforming the bank’s risk management and culture. But apparently he was no longer able to do so due to his own transgressions.
This is also indicated by the words with which Severin Schwan, CEO of Roche and Deputy Chairman of the Board of Directors at Credit Suisse, is quoted: “We respect António Horta-Osório’s decision and thank him for his leadership in defining the new strategy will continue to implement over the coming months and years, owe a debt of gratitude.”
The personnel is also a defeat for Schwan: The powerful pharmaceutical manager has been a member of the bank’s board of directors since 2014. Since 2017 he has been the chief external supervisor who has to monitor the head of the board of directors. During his tenure, Credit Suisse committed a number of violations of the principles of good corporate governance, including spying on a former top manager. But only the Corona violations by Horta-Osório, who he committed, also come closer to Schwan.
Despite his hasty departure, Horta-Osório sees the bank well prepared for the future: “The strategic repositioning of Credit Suisse will create a clear focus on strengthening the core, simplifying the business model and investing in growth.” The Portuguese had his new strategy in November 2021 presented for the bank. It provides for the dismantling of investment banking and a stronger focus on wealth management – similar to its main competitor UBS.
Lehmann also wants to stick to his predecessor’s plan: “With our new strategy, we have set the right course and will continue to anchor a stronger risk culture across the entire bank,” he says. Now I want to ensure that this is implemented quickly and in a disciplined manner. He should pay particular attention to the discipline of his top managers.
More: Quarantine violations and self-disclosure: How the chief inspector at Credit Suisse lost control.