Copyright 2010 ProQuest Information and LearningAll Rights ReservedCopyright 2010 Bank Director Bank Director
Third Quarter 2010
FOR YOUR REVIEW; Pg. 10 Vol. 20 No. 3 ISSN: 1070-7611
Former Regulator Takes the Chairman’s Seat
Ask William Isaac how his first board meeting as chairman of Fifth Third Bancorp went, and you’ll get a chuckle. “It’s a little unusual to walk into a boardroom that you haven’t been in before and chair a meeting,” he says. “But it went very well. By the end, I felt like I’d been around for five years.” This appears to be new territory for the industry, as well. As chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, Isaac, 66, is among that small class of former regulatory heads whose resumes might seem tailor-made for today’s troubling times.But the fact is that no other former regulatory head is running another bank board. The closest appears to be Don Powell, who ran the FDIC from 2001 to 2005, and joined Bank of America Corp.’s board in June 2009 as part of a board shakeup as the company grappled to address a host of crisis-related problems.Fifth Third has had troubles of its own, having lost $2.1 billion in 2008, before rebounding with $737 million in net income last year. Isaac is the chairman of LECG Consulting, which was advising the company’s 12-member board on a number of governance and risk management issues. Among his suggestions: split the chairman and CEO roles to improve oversight.CEO Kevin Kabat, 53, held both posts. The board also had a lead director, James Hackett, 53, CEO of Steelcase, Inc., a Grand Rapids, Michigan maker of office furniture.The board resolved to split the jobs only if it could find the right person. Isaac suggested a half-dozen potential candidates, including Hackett. The lead director, however, said he was too busy with his day job to take the position. (Hackett remains lead director today.)Eventually, the board approached Isaac, who had just lost a gig as lead director of Floridabased MPS Group, a staffing firm that in 2009 was sold to European rival Adecco SA. An Ohio native who had been consulting for Fifth Third for seven years, Isaac attended Miami University, just north of Cincinnati.“It made some sense. I knew them, they knew me, and it was in Ohio,” Isaac says, adding: “I’ve got about 40 years in the business and a pretty good knowledge of what the regulators expect a bank to be doing.”Those insights should come in handy as the industry faces greater scrutiny in the years ahead.
August 11, 2010