By replacing Chuck Noski with Bruce Thompson in the spot of chief financial officer, Bank of America is marching down a path last trod by Lehman Brothers.
Noski was brought in less than one year ago after a long and distinguished career in the management of some of America’s greatest companies—Northrup Gruman, AT&T, United Technologies, and Hughes Electronics. He is a member of the American Institute of Certified Public Accountants and Financial Executives International, and is a past member of the Financial Accounting Standards Advisory Council of the FASB and the Standing Advisory Group of the Public Company Accounting Oversight Board. He’s served on the boards of ADP, Microsoft and Morgan Stanley.
Basically, this guy is a stalwart of corporate America with almost unparalleled experience as a chief financial officer.
His replacement is not an accountant—he’s an investment banker.
Thompson has an MBA from the University of Virginia’s business school.
Prior to working for Bank of America, he spent the majority of his career at the securities firm Kidder, Peabody & Co. In 1996, he joined Banc of America Securities as a junk-bond salesman. From there he rose through the capital markets hierarchy to eventually become the head of Global Capital markets in July 2008. Last year, he was named chief risk officer for the bank.
In other words, Thompson is loyal soldier for Bank of America with deep roots in the culture of bond sales and trading. A very, very different animal from Noski.
Bank of America is not alone in appointing an investment banker and company loyalist to run its corporate finances. JPMorgan Chase last year appointed Douglas Braunstein as CFO. Braustein had run JP Morgan’s investment-banking operations in the Americas and was heavily involved in the acquisitions of Bear Stearns, Washington Mutual, and—much earlier—Capital One.
Wells Fargo recently put Tim Sloan—another MBA with no accounting experience—as CFO.
But there’s a far scarier precedent for Bank of America: the appointment of Erin Callan as CFO of Lehman Brothers. Callan was not an accountant—and had never worked in a corporate finance department.
Her appointment is now widely seen as a major misstep--perhaps a fatal misstep--for Lehman.
“In retrospect, it is easy to see the error of her ways for taking the job and of Lehman’s management for appointing her. What public company, of the size and stature of Lehman, in trouble already, can afford to have a CFO who is not an accountant? Have we not seen what happens when a CFO has no interest or aptitude for GAAP?” Francine McKenna, who blogs at Re: The Auditors, has written.
Now we’ve got three of the nation’s largest banks with non-accountants as chief financial officers. What could go wrong?
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