It seems harder to lose AIB top job than to get it

As two banks reel in the wake of scandal, DAVID CLERKIN compares their reactions to the crises.

TO borrow a phrase from former US president Richard Nixon, who also left office ahead of schedule, we won’t have Michael Soden to kick around any more.

The Irish business world wakes up this morning to life without the Bank of Ireland chief executive, as well as Aer Lingus chairman and former AIB chief Tom Mulcahy.

Current AIB boss Michael Buckley remains at the helm in Ballsbridge at the time of writing. But after a week without precedent in Irish banking, only fools rush in to predict what will come next in a sector where, once upon a time, its huge profits were matched only by the yawns of its observers.

Mr Soden’s reign, which until now had threatened to be so forgettable for its lack of imagination, came to an unforgettable end on Saturday after an extraordinary lapse of judgment in using his work PC to access inappropriate material on the internet.

Many observers had repeatedly questioned Mr Soden after he engaged in high-profile, kite-flying exercises after his arrival in Baggot Street in 2001. Suggestions of a merger with AIB and a poorly handled takeover approach to British bank Abbey National failed to go down well with the investment community.

However, nobody would have foreseen that the Soden story would end like this. The bank’s share price had performed poorly and few investors are likely to mourn his departure, but it offers critics another stick with which to beat the bank.

Mr Soden leaves with his reputation tarnished and will be left to reflect on the mouse trap that brought about his downfall. Perhaps the supreme irony is that the bank had severely restricted internet access for all staff at its headquarters until shortly before his arrival, fearing potential damage arising from misuse of the facility.

Mr Soden fell on his sword only because he broke the bank’s internal computer usage policy. Unlike the AIB/Faldor scandal, he did not break the law. But do not expect too many voices from the business community to condemn his choice of online viewing. If everyone walked the plank for viewing adult material, the choice of people available to fill our boardrooms would be greatly reduced and boards would soon be overrun with graduates just out of college. Ultimately, the buck stops with the board that had confidence in Mr Soden’s judgment, when it plumped for him as successor to Maurice Keane.

Mr Soden brought with him a formidable record, forged in major international banks like Citibank and National Australia, and expectations of a new dynamism to shake up Bank of Ireland. But he never shrugged off the feeling that he had failed to win the support of Baggot Street’s senior managers. And it showed.

Mr Soden gets little sympathy this morning and will be remembered as an uninspiring leader of a bank that needed inspiration. However he always gave the impression that his priority was working for the best interests of the bank and its shareholders.

His quick exit and the choice of words in his resignation statement echoed this. He felt the bank would be better off without him, did what had to be done, and did it swiftly. “I believe that leaders of organisations should be measured by the highest standards,” he said on Saturday.

His stated regret at bringing embarrassment to the bank and its staff, and his willingness to match his words with actions, do him credit at the darkest hour of his career. Meanwhile, over in Ballsbridge, the cleaners in AIB still see no blood on the carpet.

Three current executives face unspecified ‘disciplinary action’ even though their ‘tax issues’ were discovered during an investigation process that kicked off months ago. Fined? Suspended? Sacked? AIB won’t say. Past performance does not augur well.

Mr Buckley has toughed it out through a $700 million rogue trading fiasco and looks set to brush off overcharging and administrative scandals and allegations that his bank has an ingrained culture of malpractice. Last week’s statement from Mr Buckley gave the impression he was ‘happy’ that all this was in the past and nothing to do with him.

Two different banks, two different sets of problems, two different reactions. One has its PC rules and enforces them, even at the expense of its chief executive. The other has a seemingly endless series of scandals and a culture that saw top executives set up a company that broke laws. One chief executive walks. One stays.

It seems harder to lose the AIB top job than it does to get it.