May 19 (Bloomberg) -- Citigroup Inc. Chairman Richard Parsons relinquished some of his duties at the third-largest U.S. bank by assets after revamping the board of directors over the past year under government pressure.
Parsons, 62, gave up his role as head of the board’s nomination and governance committee last month, according to Citigroup’s website. Diana Taylor, a former New York banking superintendent who joined the board in July 2009, took over leadership of the committee, which sets corporate governance policies and identifies director candidates.
As head of the nomination committee, Parsons led the bank’s recruitment of eight directors following the bank’s $45 billion government bailout in 2008. With Taylor’s appointment, four of the board’s six committees are now headed by the recruits. Parsons, who remains a member of the nomination panel, said in an interview that he has no plans to step down as chairman of the board.
“It’s time for the new guys to step up,” Parsons said. “I want to get some of the new blood that we’ve brought on, new perspectives, new talents, new skills, more actively involved in the management of board functions.”
The appointment of Parsons to head the nominations committee in July 2008 coincided with the bank’s decision to make him lead director, replacing fellow board member and former Alcoa Inc. Chairman Alain Belda. Six months later, New York-based Citigroup appointed Parsons as chairman after Win Bischoff resigned.
Citigroup’s board has been criticized by shareholder advisory groups including Glass, Lewis & Co. for failing to provide adequate oversight in the years leading up to the bailout.
The bank became 27 percent owned by the U.S. Treasury Department, and faced government pressure to revamp its board to purge long-serving members and add new ones with more banking experience. The recruits under Parsons include former banking executives Jerry Grundhofer and Michael O’Neill and former Mexican President Ernesto Zedillo.
John Deutch, a former Central Intelligence Agency director who served on the Citigroup board for 14 years, said when he stepped down earlier this year that “there should be a complete turnover” of long-serving directors, and that they should “rotate off in an orderly fashion.”
Parsons, Belda, Dow Chemical Co. Chairman Andrew Liveris and Rockefeller Foundation President Judith Rodin are the only remaining board members who served in the years leading up to the credit crisis.
In September 2009, Parsons, a former Time Warner Inc. chairman, accepted a part-time advisory role at buyout firm Providence Equity Partners Inc., and he keeps an office there.
Taylor, a former investment banker, was superintendent of the New York State Banking Department from 2003 to 2007, an appointee of former Governor George Pataki. After stepping down, she joined Wolfensohn & Co., a New York-based private investment firm. She is the companion of New York City Mayor Michael Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP.
Parsons said it was his idea to promote Taylor to head the committee.
“Diana is perfect for this role, given her background, her extensive knowledge of our industry, from a regulatory perspective as well as a participant,” Parsons said. He also cited her “receptivity with the rest of her fellow directors.”
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