At Bank of America, McGee oversaw an effort to boost credit-card lending after the 2006 acquisition of MBNA Corp. That responsibility was removed in 2008, when credit card oversight was handed to Bruce Hammonds. The bank now has the largest percentage of defaults among big U.S. credit-card lenders.
Minneapolis, MN (PRWEB) October 6, 2009
Bob MacDonald, former CEO of Allianz Life of North America and financial services contrarian, sharply criticized the hiring of Liam McGee as the new CEO of the Hartford Financial Services Group, saying the move elevates outsourcing to a new and dangerous level.
Writing in his blog, http://www.bobmaconbusiness.com, MacDonald claims the Hartford board, unable to identify a qualified internal candidate or find an experienced prospect from within the insurance industry who was willing to accept the job, was forced to "outsource" the future of Hartford Financial to an unemployed banker who has no knowledge of either Hartford or the insurance industry.
"Challenged to find a replacement for the disastrous leadership of the exiting CEO Ramani Ayer, the Hartford board struggled to identify a qualified internal candidate. It became evident to the board that the Hartford executive management cupboard was bare," MacDonald charged.
"Any executives with a modicum of talent had long since deserted the leaky ship and found dry ground elsewhere," he said. "In all likelihood, those in senior management who remained were either not talented enough to solve the problems of the company or were themselves part of the problem."
Stymied in their effort to find an internal replacement for Ayer, says MacDonald, the Hartford board outsourced the search to headhunters and charged them with the responsibility of finding a qualified CEO candidate from within the insurance industry.
According to published reports, MacDonald blogged, the headhunters were able to identify a number of highly-qualified individuals with strong industry experience. "But unfortunately, the interest level in becoming Hartford's CEO was apparently inversely related to the qualifications of potential candidates. The more qualified the individual was, the less interest they expressed in the Hartford top job. "It was reported that the Hartford board had more turn-downs than an actuary looking for love on eHarmony," said MacDonald.
With no one inside the company considered qualified and no qualified person in the insurance industry willing to take the job, apparently the Hartford board decided the only thing they could do was outsource the CEO job to someone with no knowledge of Hartford and no experience in the insurance industry.
"Stuck with the runts of the litter to pick from, they hired Liam McGee, an unemployed banker who was forced out of Bank of America in a management shakeup in August. Worse," said MacDonald, "McGee has never run his own company and knows nothing of either the insurance industry or Hartford."
MacDonald said the hiring of McGee was an oddity that didn't go unnoticed by other industry observers. MacDonald quotes Bloomberg.com reporter Andrew Frye as saying, "At Bank of America, McGee oversaw an effort to boost credit-card lending after the 2006 acquisition of MBNA Corp. That responsibility was removed in 2008, when credit card oversight was handed to Bruce Hammonds. The bank now has the largest percentage of defaults among big U.S. credit-card lenders."
Brian Howlett, an equity analyst for Standard and Poor's was quoted by MacDonald as saying, "We view positively what appears to be McGee's ambitious plan to turn around Hartford. But we somewhat question Hartford's choice of McGee, since he lacks any experience in the insurance industry."
Is this the best that Hartford could do? Apparently so. But as the old saying goes, "Beggars can't be choosers." So, when the Hartford board of directors found themselves with a challenge for which they had no answer, they went where most weak management groups go. They outsourced the problem to an unknown and now hope for the best. But, all may not be lost. After all, MacDonald said, Mr. McGee had at least two qualifications the other candidates lacked: he needed the job and he was willing to take it.
Bob MacDonald was formerly CEO of ITT Life, wholly-owned by The Hartford. He founded LifeUSA, which he sold to Allianz SE in 1999 $540 million and became CEO of Allianz Life of North America. Since 2002 MacDonald has headed CTW Consulting, LLC, a vehicle for offering his experience and unique approach to management and corporate culture development.