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Hidden Costs of the Citi Succession

Vikram Pandit, former CEO of Citigroup, 2009.

Vikram Pandit, former CEO of Citigroup, 2009. Photograph by Daniel Acker/Bloomberg

It came as quite a surprise when it was announced earlier this month that Citigroup Chief Executive Vikram Pandit was leaving his position, effective immediately. Pandit’s tenure at the bank came during challenging times for the financial industry, and though some were disappointed by the bank’s performance under his leadership, there was evidence that Citi was finding its way forward from the recession. Even if the decision to force Pandit out was a good one, the way it was done shows the failure of a leader to understand the potential collateral damage caused by the way a decision is made and carried out.

Over the past two weeks, details surrounding Pandit’s departure have started to appear. The developing narrative suggests that the board chairman, Michael O’Neill, carefully orchestrated Pandit’s ouster. Over a period of several months, O’Neill worked on board members, sowing seeds of discontent with Pandit’s leadership and Citi’s progress. He deftly built a coalition that was enough to overcome any remaining support for Pandit. Pandit was reportedly summoned to O’Neill’s office and given the choice of resigning immediately, resigning at year’s end, or being fired without cause.