4.2 Group dynamic behaviour
Lehman Brothers
An example of group dynamic and emotional boardroom behaviour was exhibited by one of
the most prominent banking personalities, Dick Fuld, CEO of Lehman Brothers. In forming
his executive committee in 1996, “Fuld quickly instituted an ‘on-the-team-or-off’ mentality
at Lehman” (Fishman 2008). This behaviour had striking similarities with Irving’s findings
(see above). A colourful description of Fuld’s behaviour is provided by Andrew Gowers,
a former editor of the London Financial Times, who in 2006 joined Lehman Brothers
in London as head of corporate communications. Gower described him as a “textbook
example of the command-and-control CEO” who “inspired great loyalty and on occasion
great fear” (Gowers 2008). Describing Lehman being “at war” in the market, Gowers said
“his ferocity could be intimidating, his eyebrows beetling over his hard eyes, his brutally
angular brow appearing to contort in rage. Even when in a relatively upbeat mood he
seemed to take pleasure in violent imagery.” The most revealing aspect of Gowers’s article
is his assessment of the operation of the board. “Here was a corporate governance structure
almost pre-programmed to fail: an overwhelming CEO, a top lieutenant (Joe Gregory)
eager to please and hungry for risk, an executive team not noted for healthy debate and a
power struggle between two key players. Furthermore, the board of directors was packed
with non-executives of a certain age and woefully lacking in banking expertise. It is small
wonder that Lehman was so ill-equipped to recognise and adjust to the changes in the
environment that were dramatically signalled by the collapse of Bear Stearns in March
this year.”