The gang that couldn’t shoot straight
The sudden announcement by Gerry McCaughey yesterday that he’s stepping down as CEO of CIBC should come as no surprise. In fact, life at the top of Canadian Imperial Bank of Commerce has always been about as unpredictable as it has been unproductive. Despite all the modernization CIBC has gone through in the last four decades the corporate culture of the place remains unchanged. All banks are political, but CIBC is like the Vatican.
The story begins in 1969 when Gordon Sharwood was reading his morning paper and discovered that his colleague Russ Harrison had been named to the number two spot behind Neil McKinnon. Sharwood quit the bank immediately. It took another four years before Harrison replaced McKinnon who was ousted by the board.
Then there was the period CIBC tried what was quaintly known as a duumvirate until they realized they only needed one autocrat. When Don Fullerton became CEO in 1984 the executive suite was in a mess. Of all the CIBC CEOs, I liked Fullerton the best, but he had his leadership frailties, too. One of the brightest young bankers, Warren Moysey, quit on Fullerton’s watch. And when Al Flood was named CEO to replace Fullerton, the first thing Flood did was fire the other bright banker in the place, Paul Cantor.
Are you getting the idea? At CIBC, when times get tough, they circle the wagons and shoot each other. In 1998, when TD proposed a merger with CIBC, it was all TD people who would be in charge, such was the lack of leadership at CIBC. In 1999 when John Hunkin became CEO, the other contender, Holger Kluge, decamped because they had some kind of bizarre suicide pact that meant the loser would leave. In 2002 Hunkin even offered to merge with Manulife and would have installed the insurer’s CEO Dominic D’Alessandro as CEO such was Hunkin’s desire to go do something else with his life.
Which brings us to Hunkin’s replacement, Gerry McCaughey, CEO since 2005. One year into a new four-year contract, McCaughey says he wants to retire. In 2016. Who ever gave two years’ notice? I’d like to be able to tell you what will happen next at the beleaguered CIBC that used to be number two and is now number five among the Big Five Banks. All I know for sure is that there will be more calamity before there is any clarity.