There has been a great deal of risk that Bank of America’s (NYSE:BAC) Ken Lewis would leave as the firm’s CEO. He was replaced as the company’s chairman. He has been part of a Congressional investigation into the role of the Treasury Department and the Fed in forcing B of A to buy Merrill Lynch. He has been blamed for buying too many troubled companies in too short a time.

The moment that a federal court rejected a settlement between the bank and the SEC over misleading statements in the B of A proxy statement, the risks that Lewis would leave or be forced out went up again.

According to The Wall Street Journal, the bank’s board will decide on an “emergency CEO” this week, effectively ending Lewis’s tenure earlier than he had announced. The board is worried that legal problems could force Lewis to step down soon whether he likes it or not.

The recommendation for the new leader will be made by the bank’s chairman Walter Massey and a small committee. It will be given to the full board and government regulators by the end of this week. The choice will be particularly important because the person will almost certainly be the leading candidate to become B of A’s permanent chief.

The bank’s board is likely to be heavily criticized for not having set up a secession plan much earlier because it has become increasingly clear that Lewis’s chances of keeping his job have been diminishing. The government put several new directors on the B of A board recently, many of them former bankers. The fact that they are poorly prepared to replace Lewis is a sign of an amazing lapse in judgment.

Lewis will probably be gone by mid-month instead of on December 31, his planed departure date. The bank may not get the CEO it deserves because the selection will be too hasty. B of A, which has struggled for over a year of desperate attempts to keep its losses and legal problems from swamping it, will have as its CEO someone who was picked in a few short days. It is hard to see how that helps the company recover.

Douglas A. McIntyre.

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