The board of Société Générale sofar has declined to act on an offer to resign by chairman and CEO DanielBouton, according to news reports. The New York Times, quoting one directorfrom the 15-member board, said: “The captain remains on the boat” but it isunclear whether “the captain or the boat will sink first.” France’s secondlargest bank has reported losses of $7.1 billion, the result of actions thebank alleges by 31-year-old trader, Jérôme Kerviel.
The decision by the board to keepBouton at the helm “baffled some people in the United States and Britain,”according to the Times [link to story], “where sound corporate governance wouldmost likely have dictated his departure. But the decision seemed to be drivenby board and worker interests, rather than the coziness that is common amongFrance’s political and business elite.” The FinancialTimes, quoting another unnamed director, who said, “If he [Bouton] leads usthrough the crisis, there is no reason why he should go.”
The bank’s board appointed one ofits independent directors, Jean-Martin Folz, the former chief executive of PSAPeugeot Citroën, to head a crisis surveillance committee made up of independentdirectors. The committee is to supervise an internal inquiry into how Kervielwas able to allegedly gamble with as much as 50 billion euros of the bank’smoney without the knowledge of his bosses. The FT reports the committee is toissue a report as soon as within a month.
The bank said it had also hiredthe auditing firm PricewaterhouseCoopers to assist the committee.