In the view of many, the problem with AIG until recently was that it was driven by imperious personality. That problem was solved by the forced departure of Hank Greenberg by now-discredited ex-New York Attorney General Eliot Spitzer. However, with the arrival of Bob Benmosche as CEO, big personality is back.One struggles to get a sense of Greenberg's successor's personality, despite Martin Sullivan's election as one of the "Worst CEOs of All Time" by CNBC. Ed Liddy, Sullivan's successor, made a good impression, but the former Allstate CEO's conciliatory personality was ill-matched to the challenges of intense public hostility. With Bob Benmosche, AIG once again has a voice that can be heard above the fray.
This was amusingly illustrated by a Bloomberg report this morning that Benmosche said he wants to halve the fees paid to Wall Street banks to take the carrier's business units public. The story quotes Benmosche from an Aug. 11 staff meeting:
"I went into one presentation, and they said, 'Well, the investment banking deal will be in the range of 2 percent and 2.5 percent.' ... I said, 'How about 1 percent?' So then everybody's face turned red, and I said, 'So change it.' So we're talking about 1 percent, not 2 percent to 2.5 percent."
Benmosche's willingness to redden faces with unconventional decisions is further reflected in his moves to reconcile AIG with its former master, whom Benmosche calls "the senior statesman of our industry." According to a Wall Street Journal story published last weekend, Benmosche wants to consult with Mr. Greenberg, owing to his understanding of the company and the industry, to say nothing of his world-class candor.
"When I encounter a complicated situation I'd like to be able to share that with him. He won't have any problem telling me what he's thinking," the article quotes Benmosche. "We have to respect what he's done in the past. You can't discount what he's done."
Further evidence of reconciliation emerged with an announcement on Monday, Aug. 31, from Greenberg's office that AIG had agreed to binding arbitration with him and former AIG CFO Howard I. Smith on various legal disputes between the company and its two former officers.
There's a perennial dispute among historians over whether history is driven by "great men" or deterministic processes. In the wake of the financial crisis, the deterministic view has tended to prevail in both interpretations of causes and proposed solutions. Powerful individuals have been seen as destructive in their lack of social conscience. And the crisis has produced no heroes, only villains - such as Lehman Brothers' CEO Richard Fuld and Bernard Madoff.
With the arrival of Benmosche, the "great man" theory once again has credence in the insurance industry and the financial world. Benmosche is clearly as unafraid of making controversial decisions as he is unembarrassed about being compensated for his efforts. His personal style alone would vindicate the kind of leadership that Greenberg made famous at AIG, but Benmosche has undertaken an actual vindication of the former CEO by publicly affirming Greenberg's achievements and celebrating his expertise.
This is a subtle yet engrossing turn of fate: Greenberg's reputation hovered in a cloud of ambiguity owing to the fact that AIG imploded only after its notoriously imperious CEO was driven out. Would that implosion have happened in any case, or was the absence of Greenberg a prerequisite to the fatal risks the company took on after his departure?
With the arrival of Benmosche at AIG, it is again imaginable that the brand could survive and thrive once more. And it is possible that his actions to rehabilitate Greenberg's reputation may grant the former AIG boss an opportunity for self-vindication.With the arrival of Benmosche at AIG, it is again imaginable that the brand could survive and thrive once more. And it is possible that his actions to rehabilitate Greenberg's reputation may grant the former AIG boss an opportunity for self-vindication.