Bank of America

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One person’s influence at the top of large organisations is overestimated. It is hard to transform a company with hundreds of thousands of people. External forces, such as economic malaise or industry upheaval, are stronger. Nonetheless, the name on the chief executive’s door does say a lot about a company. In that vein, Bank of America’s choice of leader, in Brian Moynihan, is an uninspiring one.

In Mr Moynihan’s favour is that he knows the company and offers a smooth transition. But more of the same, in itself, suggests a lack of ambition and creativity.

True, BofA already has a solid strategy to pursue. But the new boss’s primary challenge is to make good on the purchase of Merrill Lynch. It is not clear that Mr Moynihan, a lawyer who has most of his experience in wealth management, with only a brief stint running investment banking, is the natural choice to do that. With a search committee divided on the merits of an external candidate, and seemingly struggling to attract even mid-tier names to the job, Mr Moynihan’s elevation is a safe but prosaic compromise. It also solidifies BofA’s position as a Wall Street outsider.

BofA’s board, then, has dressed the bank for the job it has, rather than the job it professes to want. But a selection process that is overly risk averse is more or less the norm for CEO appointments – which, for an industry that needs fresh thinking, is unfortunate. To the extent that Mr Moynihan’s appointment removes uncertainty, comforts investors or excites BofA’s rank and file, it is a good choice. But the bank’s performance for the next year, at least, will be determined more by the strength of economic recovery and the decision of regulators than the choice of incoming CEO.

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