.credit-suisse Statement regarding BGN and Corporate Governance at CSG


Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

.credit-suisse Statement regarding BGN and Corporate Governance at CSG

  1. 1. INFORMATION Statement by Lukas Mühlemann at the Credit Suisse Group annual and fourth quarter results press conference Zurich, March 12, 2002 - I would like to take this opportunity today to say a few words about two issues concerning both our company and me personally that are currently the focus of some discussion. First, Banco General de Negocios in Argentina. Here I would like to stress that we are not prepared to tolerate certain events which occurred at BGN and which we learnt of in January 2002. We are cooperating with the authorities and are doing everything we can, as a minority shareholder, to help clarify the situation. Our stake in BGN goes back to 1970. At the time, the former Credit Suisse (SKA), JPMorganChase and Dresdner Bank wanted to strengthen their positions in Latin America and therefore entered into a partnership with José and Carlos Rohm, who had a good reputation and proven track records as bankers. Together, they set up Banco General de Negocios. The three foreign banks each acquired a stake in the share capital, but left the majority voting interest to the Rohm brothers, who were entrusted with the management of the bank. In 1998, a year after I arrived at Credit Suisse Group, I was asked – as a representative of the Group – to take up a seat on the Board of Directors of BGN. I accepted the mandate. At that time, JPMorganChase was already – and still is – represented on the Board of Directors via its Chairman and CEO; and the Chairman of the Dresdner Management Board also accepted - and currently still holds - the mandate. BGN has developed over the years to become a small but successful Argentinean bank. Current media reports do not do justice to the bank as a whole and are tainted to some extent by comments by certain factions in Argentina, which, because of the country's severe economic problems, have their own political agenda. With regard to earlier allegations against BGN, we have never had any substantiated evidence of irregular activities at BGN. Credit Suisse Group – and of course the other foreign shareholder banks – would otherwise have withdrawn from their involvement with BGN. Following the meeting of the Board of Directors of BGN on January 24, 2002, we obtained information that prompted us to contact the relevant authorities as soon as was possible. http://www.credit-suisse.com/en/news/pa_wn_browser_en.jsp?ns=19681
  2. 2. Due to the ongoing investigations, I cannot comment further on this. The shareholder banks' confidence in the management of BGN has been shaken, although only the outcome of the current legal investigation in Argentina will show whether there has been any improper conduct. Since we only have limited influence as minority shareholders, the representatives of the foreign shareholder banks immediately tendered their resignations from the Board of Directors. With hindsight, we regret our involvement with BGN and our representation on its Board of Directors. Now to the issue of corporate governance and my dual mandate as Chairman of the Board of Directors and Chief Executive Officer of Credit Suisse Group. Credit Suisse Group is committed to the highest standards of corporate governance. The dual mandate is not a matter of principle either for our Board of Directors or for myself. In view of our organizational structure and management situation, we believe that combining the responsibilities of Chairman and CEO is the right management model for our company at the present time. Under our management structure, the company is divided into two major business units with decentralized responsibilities, Credit Suisse Financial Services and Credit Suisse First Boston, headed by CEOs Thomas Wellauer and John Mack respectively. This means that as Chief Executive Officer of Credit Suisse Group, my principal mandate is not the operational running of a business area, but the strategic and financial management of the Group, its risk management, and the monitoring and control of the two business units. These are also the core responsibilities of the Board of Directors. The current arrangement is efficient and contributes significantly to effective cooperation between the Board of Directors and the Executive Board. My dual mandate is therefore very much comparable to the role of an quot;activequot; Chairman of the Board. With a Lead Independent Director and two Board Committees – the Audit Committee and the Compensation and Appointments Committee, made up exclusively of independent members of the Board of Directors – we are fulfilling the requirements of efficient business management and monitoring in line with the practices of good corporate governance. http://www.credit-suisse.com/en/news/pa_wn_browser_en.jsp?ns=19681