Citigroup's chairman on the hot seat

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For years, shareholders have been asking boards to step up and aggressively confront management on key performance and other issues.

In the case of Citigroup, critics of the management ostensibly got what they wanted when Chairman Michael O'Neill ousted then CEO Vikramn Pandit in a clumsy power play that earned lots of negative press for the board. O'Neill also hand-picked Pandit's successor, Michael Corbat.

While the CEO is place, it would appear that the real puppet master at the bank remains the chairman. Reuters puts it bluntly: "O'Neill, 66, is effectively running Citigroup."

That may be an overstatement, but you can bet that he has the upper hand in the always tricky chairman-CEO relationship. But is O'Neill qualified to run a global bank of the scale and complexity as Citigroup? Citigroup once considered O'Neill as a candidate to run the bank but ultimately decided that he didn't have right experience, as he had only managed small banks in the past. He was, however, deemed qualified to serve on the board, even as chairman.

"It remains far from certain that O'Neill can use the methods he has previously used to turn Citi around. It not only dwarfs Bank of Hawaii but is also seven times as large as BankAmerica was in 1997, when O'Neill was that bank's chief financial officer. Citigroup is also vastly more complicated and has been exiting businesses for years."

Can this work? The stock price over the next year or so will tell all. If the bank flounders, people will be second guessing a lot.

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