Corporate Governance and JPMorgan Chase
Richard (RJ) Eskow: The Price of Evil at JPMorgan Chase
You’d think shareholders would be up in arms at Dimon and the Board of Directors for mismanaging their bank so badly. And yet they’re all still in their seats, thanks in part to the way large corporations are allowed to manipulate their own corporate governance. Dimon is both CEO and Board Chair, an extraordinarily privileged position he was not asked to give up after the London Whale scandal.
And about that scandal: There are four things worth knowing about the Whale:
- The trades were illegal, according to all the evidence.
- Despite the bank’s bragging about its risk management model — which it publicized widely as a lure to investors — that model wasn’t followed by the London office.
- Jamie Dimon’s publicists and politician friends have burnished his reputation as “America’s best banker” – and he bypassed his bank’s org chart so that the London unit reported directly to him.
- His friends and publicists have also burnished his reputation as the country’s most ethical banker. As Henny Youngman used to say, How do ya like me now?
We’ve been all over JPMorgan Chase and Jamie Dimon for a long time. (See below for a partial listing), so we’re glad to see the public tide finally turning against the bank and its leader. One of the triggers for that shift was the Senate’s report on the bank’s trade, which is as damning in its own way as Rosner’s.