Not My Fault!

“Citigroup Inc., as it unveiled the final in a flurry of internal organizational changes, appears to be getting started on a restructuring of its board.

“The banking giant said in a statement on its Web site that its board ‘is actively seeking new directors’ and is placing a ‘particular emphasis on expertise in finance and investments.’

“The board has been criticized by shareholders and, in private, by some Citigroup executives. They are frustrated with the board's failure to sound the alarm as the bank piled up big risks in the years before the credit crunch hit, saddling Citigroup with more than $20 billion in losses since last summer.

“The board has few members with experience in financial services. Only two outside directors -- Richard D. Parsons, Time Warner Inc.'s chairman, who ran a New York thrift in the early 1990s, and Robert L. Ryan, who was a Citibank vice president from 1975 to 1982 -- have any banking background. Mr. Ryan, Medtronic Inc.'s chief financial officer, joined the board last year.

“Citigroup spokeswoman Christina Pretto said the board ‘has diligently carried out its responsibilities, including with respect to issues surrounding mortgage-related exposures.’ She added that the board is ‘highly experienced with a unique knowledge of the company, and regularly reviews and unanimously supports’ Citigroup's planning process and Chief Executive Officer Vikram Pandit's strategy.

“Robert E. Rubin, the former Treasury secretary who is chairman of Citigroup's executive committee, has been singled out for sharp attacks. Some investors and executives say Mr. Rubin, who was the chief advocate of naming Mr. Pandit as CEO in December, deserves blame for Citigroup's larger appetite for risk-taking in recent years...

“Mr. Rubin, however, is unlikely to step down from the board anytime soon, said a person familiar with the matter. He has defended his role by noting that he isn't responsible for any risk-management or trading functions at Citigroup.”

(“Citi Seeks Finance-Savvy Directors.” David Enrich and John Flowers. Wall Street Journal. April 1, 2008. pg. C.3)

WELL, WE MIGHT FEEL REASSURED that board decisions are unanimous (in support of strategies with which they have no experience).

And we are reassured that a former U.S. Treasury Secretary has nothing to do with "risk-management or trading functions." We wouldn't want him gumming up what we really want to do.