AIG's Harvey Golub: Is leaving good leadership?
In a rare public feud between a company CEO and Chairman, Harvey Golub has quit his post as the Chairman of American International Group, citing irreconcilable differences between he and AIG CEO Robert Benmosche.
While such clashes happen all the time, especially at companies in crisis, they don't often get much airtime outside corporate boardrooms. "Bob Benmosche has informed the board that he believes our working relationship as chairman and CEO to be ineffective and unsustainable," Golub wrote in his resignation letter, which AIG released as part of a company statement. "At this point, I view asking the Board to choose between us would be an abdication of my responsibility to lead."
Such candor may be necessary when the federal government controls your company, as it does AIG. And it surely allows Golub, the former CEO of American Express and a longtime McKinsey & Co. partner, the chance to walk with his reputation intact, rather than have it appear he was pushed out.
But it seems there would have been little chance of that. Golub had the support of virtually all other AIG directors in opposing the sale of the company's overseas life insurer, AIA Group, to Prudential at a lower price than had been agreed. They worried the deal, even at a lesser price, could fail if Prudential stockholders rejected it. Benmosche, meanwhile, had been pushing for the sale at the reduced amount, and was threatening to quit his job over the differences.
In many companies, it would have been the CEO, not the Chairman, who was out. But this isn't just any company. It's AIG, the massive insurer whose near-failure at the peak of the financial crisis helped bring the world economy to its knees. By every traditional standard, it has been a management quagmire, with five different CEOs in five years, including its current one, who started his tenure leading the troubled giant while on vacation, threatened the New York Attorney General with "the worst thing that will ever happen to him," and said he would leave once before, in November, over pay restrictions.
All of this raises a fascinating question. For a moment, put aside the asset sales--clearly important strategic and financial decisions--and consider the leadership dilemma at hand. Golub believes that by stepping down, he's keeping the board from facing yet another weighty predicament: How to avoid replacing Benmosche. To put it mildly, AIG has had a hard time keeping CEOs, and Golub couldn't be more correct when he writes that it's "it is easier to replace a chairman than a CEO." If leadership is defined by sacrificing one's own needs--or ego--for the good of the company, Golub is providing it.
At the same time, leadership is also about standing up for what you believe in. If Golub thinks his positions on the asset sales were right, and if he indeed has the support of the board, his departure is something of an abdication of leadership, too. Tough calls are part of any top job, even if that means you lose someone whose role is nearly impossible to fill.
Who knows, after all, if Golub's departure will really keep AIG's CEO from quitting at the next clash or controversy. With a guy like Benmosche on board--the blustery CEO said in an employee memo last November he was "totally committed to leading AIG through its challenges" after he almost left over pay--who's to say he won't threaten to quit again?
What do you think: When is leaving good leadership?
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Posted by: shadowmagician | July 16, 2010 12:30 AM
Posted by: RiverAce | July 15, 2010 1:37 PM
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