Chairman of JPMorgan since 2006 and CEO a year longer, Jamie
Dimon faced down a daunting stockholder vote on May 21, 2013 on whether he
should be allowed to retain both roles. Despite the bank’s $6.2 billion trading
loss, deeply flawed risk-management oversight, and “credibility issues” with
regulators, only about 32% of the votes cast were in favor of the nonbinding resolution that the chair and
CEO jobs be separated. Interestingly, not only does the chair/CEO duality have an
inherent conflict of interest because part of what a board (including its
chair) does is hold management (including the CE) accountable, the means by
which the pro-duality side campaigned also included conflicts of interest. I
cannot help but wonder whether Jamie Dimon, his immediate subordinates, the
bank’s board directors and even the stockholders who altogether voted a
supermajority of shares in support of Dimon’s two roles were negligent
ethically in failing to even recognize the
institutional conflicts of interest involving Dimon and the board. To the
extent that recognition existed, permitting the conflicts to exist and in some
cases knowingly exploiting more than one at a time are even more squalid than
merely being oblivious to them. To the extent that structural conflicts of
interest were enabled through the campaign and in the election results,
JPMorgan Chase can be likened to a house of cards. This does not bode well for
the financial system and broader economy to the extent that the largest
American bank holds systemic risk (i.e., “too big to fail”). I look at the
campaigning first, as doing so will lead us directly to the main conflict of
interest that is at issue here.
Jamie Dimon, CEO and Chair of JPMorgan Chase. The duality of roles can benefit him both personally and institutionally. NYT
The full essay is at "JPMorgan: An Unethical Monstrosity?" and at
Institutional Conflicts of Interest, both available in print and as an ebook at Amazon.
Institutional Conflicts of Interest, both available in print and as an ebook at Amazon.