Should Mühlemann go?

Are Lukas Mühlemann's days at the helm of Credit Suisse numbered? Keystone Archive

Speculation is mounting that Lukas Mühlemann might step down from the helm of Credit Suisse, following a series of financial scandals.

This content was published on February 26, 2002 minutes

Credit Suisse (CS) Group has been beset by scandal and the mud is starting to stick to Mühlemann, who is both chairman and CEO.

Last week he said he would be stepping down from the board of an Argentinian bank - part owned by Credit Suisse First Boston - which is under investigation for money laundering and helping rich clients move their money out of the country illegally.

Mühlemann gave no answer as to why he personally was on the board of Banco General de Negocios (BGN), but his announcement coincided with media reports exposing his links with the bank, and the launch of investigation into ties between CS and BGN by Switzerland's banking watchdog.

Credit Suisse said it was "shocked and deeply concerned" about the allegations relating to BGN but could not comment further.

Latest scandal

The BGN scandal is the latest to afflict CS, whose investment bank CSFB has been accused of wrongdoing in a number of countries, including the United States, Japan and India.

Mühlemann has not been implicated in any of these scandals, but financial analysts have been concerned about the apparent lack of controls at the bank.

"I don't suppose Mühlemann knew anything about these dubious activities," said Hong Kong-based analyst, Marc Faber. "But it shows there was a certain culture at the bank in which people did things they shouldn't have done."

Faber told swissinfo that any boss would have his hands full dealing with such a vast financial services group, and that Mühlemann is probably overstretched.

"I know Mühlemann personally," Faber said. "He is a decent person and probably quite a good manager, but to run a group as large and diverse as CS is very difficult, and it's impossible for the CEO to be familiar with all the divisions and businesses."

Conflict of interest?

Faber's comments highlight another problem facing Mühlemann, namely his joint role as chairman and CEO of CS.

On Monday, Rolf Hüppi, who holds both positions at Zurich Financial Services, announced he was stepping down as CEO.

Hüppi was under far more pressure than Mühlemann - Zurich's share price has fallen by nearly 60 per cent over the past year - but markets are becoming increasingly uneasy about having the same person straddle both jobs, seeing the potential for a conflict of interest.

"I don't think it a desirable state of affairs in a corporation," Faber told swissinfo. "You should be either chairman or chief executive - not both."

William Hall, the Financial Times' correspondent in Zurich, takes the view that it is not necessarily a problem for the same person to be both chairman and CEO of a company, as long as there are controls on how much power that person can exercise.

"Some companies do very well with having the same person as chairman and chief executive. In the United States, being both chairman and chief executive is quite normal for big companies, but what you do need is strong boards of directors who actually can challenge the chairman," Hall told swissinfo.

Whether Mühlemann can weather this particular storm remains anyone's guess. In Faber's view, the CS boss is a "target at the moment, and rightly or wrongly somebody has to take responsibility so he may have to step down".

Faber acknowledges, though, that a Mühlemann's problems would seem far less severe if the stock market was performing well.

"In a bull market nobody cares. But in a bear market investors always look for somebody to blame."

by Robert Brookes and Jonas Hughes

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI certified by the Journalism Trust Initiative

Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at

Share this story

Change your password

Do you really want to delete your profile?