This book sets out to be about the pitfalls of the state as the shareholder of a universal bank, but it turns out to deal much more with ineffective boardroom dynamics that paralyze an organization. Subsequent supervisory boards and executive boards of ABN AMRO didn’t collaborate effectively, the authors explain, resulting in a hostile working environment that inhibited the bank in its development. The authors, two Dutch business journalists, wrote a shocking reconstruction of the last decade at ABN AMRO, starting when the Dutch state stepped in to rescue the bank in 2008 and ending today.
The main characters in the book are the subsequent chairmen of the supervisory board – Hessel Lindenbergh, Rik baron van Slingelandt and Olga Zoutendijk – and the CEOs Gerrit Zalm and Kees van Dijkhuizen. A major challenge for corporate governance in general is that as the chairman of a supervisory board you have to balance between being supportive and being confrontational. Subsequent chairmen at ABN AMRO didn’t find that balance, the book shows. Hessel Lindenbergh and Rik baron van Slingelandt proved to be too lenient, Olga Zoutendijk proved to be too confrontational.
Hessel Lindenbergh wasn’t able to get a grip on CEO Gerrit Zalm, the book shows. The CEO, a former Dutch Minister of Finance, treated his supervisory board as a parliament: show them respect, answer their questions and go your own way. Zalm was headstrong and remained elusive for his supervisors. When the chairman expressed his worries about his lifestyle – his heavy smoking and his daily whisky – Zalm didn’t change a thing; he kept smoking, even in his office, having disabled the sprinklers.
The members of the supervisory board informally complained about the CEO, about the lack of strategy and about the composition of the board, which was considered too weak. But they held back during formal meetings, being too much attached to keeping a positive atmosphere.
The distrust between supervisory board and CEO Zalm peaked over a public riot about salaries. Executive board members were promised a raise of their fixed salary to compensate for the ban on bonuses for a state-owned bank. The raise had already been postponed because of the political climate, but Minister of Finance Jeroen Dijsselbloem promised both Gerrit Zalm and the supervisory board that he would defend the raise in parliament this time. Just before the parliamentary debate about the topic, Dijsselbloem visited Zalm secretly in his office to ask him for a favor: to waive the raise again, because the political climate was hostile. Zalm refused; he even didn’t mention this visit to his fellow board members or his supervisory board. Dijsselbloem subsequently didn’t stick to his earlier promises and even said that the salary raise was immoral and a bone in his throat. His reaction shows a cultural abyss between business and politics: in business you honor contracts, in politics political sensitivity can make written contracts null and void. When Gerrit Zalm blamed the salary riot on the supervisory board in an interview, Van Slingelandt was livid. As a result, Zalm came under guardianship, got an official rebuke and could only talk to the press with explicit permission of the supervisory board. Eventually, the supervisory board decided that Zalm had to leave before the end of his second term. Zalm himself had hoped for a third term.
The book is mixed about the records of both Zalm and Van Dijkhuizen as CEOs. Zalm earned points for the integration of ABN AMRO and Fortis, thus building more stability; also for the high trust and safety in his team. But the authors note a limited buy-in for the corporate strategy, which was also considered too modest and uninspiring. The lack of a widely supported, ambitious strategy remained under Van Dijkhuizen, who was considered a nice guy but a weak leader according to letters from anonymous bankers to regulators and the supervisory board.
The relations between supervisory and executive boards deteriorated even more when Olga Zoutendijk became the chairman of the supervisory board. Zoutendijk was experienced as a banker in an Anglo-Saxon culture, thought that ABN AMRO was too slow and mediocre and was eager to make a difference. She had a confrontational approach, asked penetrating questions during formal meetings and kept pushing when executive board-members didn’t have answers that she deemed good enough. A crushing detail in the book: when she was speaking, executives apped pictures to each other of Cruella de Vil, the evil character in The Hundred and One Dalmatians.
The relationships between Zoutendijk on the one hand and Zalm and his successor Kees van Dijkhuizen on the other hand were downright bad. Zalm preferred to stay out of her way and referred to her as ‘that woman’. Van Dijkhuizen and Zoutendijk got an assignment from the supervisory board to work on their relationship during a joint visit to the World Economic Forum in Davos. They hardly did. They each had their own program and just once had a glass of wine together.
In the end there were too many complaints about the leadership style of Zoutendijk. Her fellow supervisory board members decided that she should be forced to leave. ABN AMRO got a new top team with Tom de Swaan as chairman and Robert Swaak as CEO. It is up to them to show that ABN AMRO is fit for the future.
The book unearths a wealth of details about how a large organization like ABN AMRO is run on a daily basis. The breathtaking speed of events makes it difficult to put the book away and makes it a joy to read. Having said that, the book might have benefitted from taking a step back, giving more context, and especially putting more meat to the bones of the main characters, not only in what they did, but also in who they are.
Ivo Bökkerink and Pieter Couwenbergh. De Staatsbank. ABN AMRO klem tussen ambtenaren en bankiers. Prometheus, 2020