A very Swiss execution: How Thiam got the boot at Credit Suisse

Credit Suisse Group chairman Urs Rohner (at right) and former chief executive Tidjane Thiam in a 2017 file photo.
Credit Suisse Group chairman Urs Rohner (at right) and former chief executive Tidjane Thiam in a 2017 file photo.PHOTO: REUTERS

ZURICH • It took Credit Suisse Group's chairman 19 meetings to woo Mr Tidjane Thiam, and one board meeting to say goodbye.

In a matter of hours last Thursday, the Swiss chairman of a Swiss bank put the Swiss back in charge, ousting the French-educated native of the Ivory Coast.

The boardroom showdown in Zurich capped an extraordinary run of public scandal and private feuding at the highest levels of the Swiss bank. It leaves the new leader, Dr Thomas Gottstein, with the task of brokering peace among executives and restive stockholders - some of whom are still calling for chairman Urs Rohner to follow Mr Thiam out the door.

In the end, the bizarre disclosures that engulfed Credit Suisse under Mr Thiam - executives spied upon, grudges among top managers - proved too much for the bank's board and an establishment that prizes discretion. A stock price that had declined by about 50 per cent during his tenure did not help either.

"We saw a deterioration in terms of trust, reputation and credibility among all our stakeholders," Mr Rohner said in an interview last Friday. He said the bank's reputation was particularly damaged in Switzerland, which accounts for about 40 per cent of the bank's pretax income.

The swift end to Mr Thiam's tenure could not be more at odds with his auspicious start at the bank. Mr Rohner spent months courting Mr Thiam before the star insurance executive joined in 2015.

He came with glowing credentials: Under his watch, shares of Prudential had tripled and Swiss newspaper Blick lauded him as the "Obama of Credit Suisse" shortly before he joined the firm.

With Mr Rohner's backing, Mr Thiam overhauled a bank that had been battered by a volatile trading business in the years following the financial crisis.

In the early days, Mr Thiam and Mr Rohner projected a united front. Mr Rohner, a Swiss lawyer, relied on his new hire to push through a deep restructuring that led to the loss of thousands of jobs and shrank the bank's trading business.

But there were signs of a rift early on after a huge trading loss in 2015, prompting Mr Thiam to publicly complain that he was blindsided by his traders. Mr Rohner took the position that Mr Thiam should have seen it coming.

Years later, a conflict between them brewed again over Mr Thiam's dispute with former international wealth management head Iqbal Khan. The two men were so close that they became neighbours in the upscale Zurich suburb of Herrliberg.

But their relationship soured as Mr Khan's success grew and he assumed the role of "crown prince" in a possible chief executive succession. Tensions between the two men erupted in an altercation at a party at Mr Thiam's house in January last year, prompting Mr Khan to complain to the bank's board.

The next month, Mr Khan was passed over for a promotion that elevated two of his colleagues to the executive committee. And by July, the wealth management star was quitting to join crosstown rival UBS Group. What happened next sparked an international scandal.


We saw a deterioration in terms of trust, reputation and credibility among all our stakeholders.


One of Mr Thiam's deputies, Mr Pierre-Olivier Bouee, hired detectives to follow Mr Khan - a development that became public after Mr Khan confronted his pursuers in downtown Zurich.

As the fallout from the scandal spread, a contractor who hired detectives for Credit Suisse took his own life, prompting a police investigation.

At a press conference in October, Mr Rohner apologised to Mr Khan and his family, while maintaining the board fully backed Mr Thiam.

Mr Thiam was absolved of responsibility in an internal probe, with the board blaming Mr Bouee for ordering the surveillance.

Mr Bouee had been a close confidant of Mr Thiam at three companies for more than a decade, yet his former mentor distanced himself. Referring to his colleague, Mr Thiam said publicly that he was not "sure you can describe him as a friend". Mr Rohner was displeased by that statement, according to a person familiar with his thinking.

The bank has struggled to contain the crisis ever since. In December, a second spying incident came to light, after it was reported that former human resources head Peter Goerke had been followed.

This episode was a turning point for Mr Rohner, as it indicated a pattern and left the bank unable to explain the spying. It also unsettled Swiss regulators, who have launched their own inquiry into the culture at the top of the firm.

After a dinner last Wednesday night, the board convened last Thursday for about eight hours of meetings in the make-or-break showdown.

The directors had already debated the spying and its consequences on several occasions, Mr Rohner said. So, by the time they met on a crisp and sunny morning in Zurich, most of the issues had been prepared in advance.

An expert in legal manoeuvres, Mr Rohner expedited the management change like any other board meeting. By early evening, his staff were already working on the announcement for Mr Thiam's resignation.


A version of this article appeared in the print edition of The Straits Times on February 10, 2020, with the headline 'A very Swiss execution: How Thiam got the boot at Credit Suisse'. Subscribe