The Imbecile's Ball: Citigroup (C) Dances Around Management Change

What will happen next on Citigroup’s board or among the ranks of its senior management involves a guessing game.

By several accounts, chairman Win Bischoff is leaving. But, he has been on his way out for months. He still has his job. The earlier rumors must not have been true.

The Wall Street Journal reports that the Citi board has given CEO Vikram Pandit a vote of confidence. Even if the firm loses tens of billions of dollars this year, Pandit is getting that public support just the way his predecessor Chuck Prince did, right up until the end.

Bischoff is just a pleasant old man from overseas who was in the wrong place at the wrong time. To look at media reports, the director who did all of the damage at Citi was former Treasury Secretary Robert Rubin. He is gone, but the problems he helped create are not. According to William Shakespeare, "The evil that men do lives after them; the good is oft interred with their bones." If that is true, almost no one on the bank board is likely to have a peaceful passing.

The name which keeps coming up when these announcements or rumors hit the media is Citi’s lead director Richard Parsons, former CEO of Time Warner (TWX). He may take Bischoff’s place as Citi chairman but he did not do a bang up job at the media company. He has also been sitting on the Citi board during most of the period when the decisions were made that nearly brought the bank down. It would be hard to defend the position that he is blameless.

Citi is still going through a period when it is important for the government, which loaned the bank money, and investors, who lost most of theirs,  to see someone humiliated for the company’s missteps. That is a fine way to focus on the past but not on the future. That means the board is compounding its mistakes by continuing to take its eye off the real problems.

Douglas A. McIntyre