Chairman Urs Rohner is leaving amid massive criticism of his oversight of the Swiss bank. Major shareholders share blame in looking on for far too long.

As Urs Rohner wraps his ten-year tenure of the Zurich-based bank, he was blasted as being «more than asleep at the wheel» by Credit Suisse's second-largest shareholder, Harris Associates' Dave Herro, in the «Financial Times». The «nonsense and poor oversight» are due to end when Rohner hands over to António Horta-Osório on Friday.

The Swiss lawyer is leaving in ignominy: Credit Suisse tapped shareholders four times in nine years, held fast to investment banking risk-taking despite several huge accidents, pleaded guilty to conspiracy in the U.S. after retreating from the offshore market more slowly than rival private banks, and is currently being roiled by $4.7 billion in losses from Archegos as well as a $10.1 billion line of supply chain funds with collapsed Greensill.

Signing Off Listlessly

Herro and other major shareholders like the sovereign wealth funds of Qatar and of Norway, Saudi Arabia's wealthy Olayan family, Blackrock, Dodge & Cox, and Silchester have not done well on their investment. Under Rohner, Credit Suisse's stock has shed more than three-quarters of its value and currently trades under 10 Swiss francs. 

Though investors are fuming that the Swiss bank is reneging on two-thirds of last year's payout due to the Archegos and Greensill hits, there is no genuine opposition to the measure. This is emblematic of the listlessness with which the board has signed off on wherever Rohner has led them over the last decade.

Emboldened By Vacuum

The Olayans, Credit Suisse's longest-standing backers, haven't stood a direct representative since Aziz Syriani left in 2013 and Qatar's Jassim Bin Hamad J.J. Al Thani left four years ago. More vocal directors either left in disillusionment (Alexander Gut) or ran into term limits (Noreen Doyle).

At the same time, Rohner stocked the board with a disparate group including Seraina Macia, an insurance specialist, former investment banker Kai Nargolwala, ex-Deloitte executive Joaquin Ribeiro, and Ana Paula Pessoa, a Brazilian former media executive. The lack of checks and balances led to a vacuum that emboldened Rohner and management through big bonuses, massive write-downs, dilution of shareholdings – until now.

Entwined Interests

The heavyweight investors as well as some ultra-rich individuals were behind last week's emergency $1.9 billion infusion. Qatar came to Credit Suisse's rescue during the 2008/09 crisis, and the bank the emirate 380 million Swiss francs ($415 million) in coupons every year on that injection, until three years ago.

Blackrock, which holds just over four percent plus options for another one percent, is in a similarly entwined position: the U.S. asset manager and Credit Suisse teamed up just before Greensill imploded to build and distribute sustainable financial products together, as finews.com reported. 

Board Overhaul?

Credit Suisse had sold $16 billion in exchange-traded fund activities to Blackrock back in 2013, and the bank elected two years ago to use the U.S. firm's Aladin technology for its own fund business. Separately, Credit Suisse has done a series of real estate deals with Norges over Zurich office space (Uetlihof) and with Qatar over London real estate its investment bank uses. 

None of these shareholders stand as a board representative at Credit Suisse. The 13 current board directors of Credit Suisse – Rohner, deputy Severin Schwan, Iris Bohnet, Christian Gellerstad, Andreas Gottschling, Michael Klein, Shan Li, Macia, Richard Meddings, Nargolwala, Pessoa, Ribeiro, and John Tiner – took home 11.1 million francs for their work last year, just one percent lower on the year.

Hopes now rest on Horta-Osório, who as currently a CEO is likely to be a far more hands-on chairman than Rohner, a gifted trial lawyer who in 17 years with Credit Suisse was never quite able to shake the idea that he wasn't a banker. The «FT» reported that Horta-Osório believes Credit Suisse's board should be overhauled. 

Katharina Bart contributed reporting