Ido Dissentchik, external director at Bank Hapoalim (TASE: POLI), had some hard things to day about the critical article TheMarker published about the conduct of directors at the bank, regarding the ouster of chairman Shlomo Nehama. He was quick to point out where TheMarker has erred. TheMarker, re Dissentchik, had not even understood how the Bank Hapoalim board of directors operates. He then went on to list our mistakes.
For instance, he wrote in his piece "The phone never rang": Shlomo Nehama and the bank's controlling shareholder Shari Arison "met Wednesday for a long-scheduled routine meeting, not to hammer out the details of Nehama's resignation".
He continues: "The question of Nehama's future happened to arise during the meeting and the two agreed to announce his impending departure."
Ah. We are to understand that the resignation of the chairman of the biggest and most important company in Israel was received at the spur of the moment by one woman, who owns the bank - Arison.
"The directors were not surprised," Dissentchik continues to correct TheMarker's version of events: "Arison called each one early in the morning and informed them of Nehama's departure."
No question about it: notice of a few hours before the announcement was made public, that Shlomo Nehama was leaving, and doing it right before a board of directors meeting, is the right and proper way to advise the directors that the most important person at the most important bank in Israel is leaving.
"Arison also told them over the phone she would ask the directors to appoint Danny Dankner as chairman. The time for a proper discussion of his successor is when the apposite regulatory permits are in hand," Dissentchik teaches.
Definitely, that's how the board of directors should learn about the choice of the new chairman. It is also the amount of attention that it should devote to the candidacy of the new chairman.
"During its discussion, the board of directors verified that there was no connection between Nehama's disengagement from the bank and anything that happened at the bank itself, his performance as chairman or the way his did his job and fulfilled his duties for the bank," Dissentchik writes, and hastens to share his opinion about Shlomo Nehama's performance as chairman of Bank Hapoalim: "The directors believe that Shlomo Nehama was an exemplary leader."
If that's what the directors think, then why did they accept his ouster by the owner, especially as it seems like little more than a moment's decision?
The weight of a word
" Danny Dankner is an excellent appointment," Dissentchik pats on, "?There is no need for a search committee, when the board knows the candidate so well and believes he is absolutely worthy of the position." The Companies Law rules that the chairman of a board shall be elected by the board. The word 'elected' indicates that the board should be weighing, considering, debating and finally, deciding.
But on the Bank Hapoalim board, according to Dissentchik, none of these existed. The directors chose the person that the bank?s owner suggested. According to Dissentchik's testimony, clearly the planned discussion of Dankner's candidacy (once the Bank of Israel is on board) is pointless. Dissentchik clarifies that the directors were certain ahead of the event, before any discussion, that Dankner would be the chairman.
"There may have been a tidier and calmer way to make this change, but it is impossible to cast even the smallest doubt on the right of the controlling shareholders to determine who heads the board of directors that runs the asset they own."
Not so. Doubt can be and should be cast. The Companies Law states that it is directors' duty is to the company they run, not to its controlling shareholder. The controlling shareholder may appoint the director, which places them in a situation of discomfort when opposing the controlling shareholder. But the law requires them to oppose the controlling shareholder if they believe he's making a mistake.
It is Shari Arison's right to rule who will manage her bank, which the Banking Law also states. But that does not contradict the right and duty of the board of directors to ascertain that appointments at the bank are being made properly, and for the greater good of the bank.
In this case, there is one controlling shareholder. She has no partners any more to hold her back. She apparently reached an impulsive decision to replace the bank's chairman, though according to the inquiry by the board of directors, apparently there were no material reasons behind her decision.
Her decision threatens to destabilize the most important business institution in Israel, but the only one who could check the controlling shareholder is the board of directors, which is the body that chooses the chairman. But it didn't so much as peep.
"As far as the external directors go, who Dagan says 'maintained silence' - ? (the writer) was also not accurate regarding Ido Dissentchik, who certainly commented; and Yair Orgler also participated in the discussion. Minutes were taken by a stenographer. Dagan was correct in reporting that Amir Barnea spoke during the meeting." Barnea spoke thusly: that replacing the chairman was a foolish decision by the controlling shareholder. What did Dissentchik and Orgler say? Dissentchik doesn't tell us. All we can do is try to guess.
Supervisor probing Shlomo Nehama's hasty departure from Bank Hapoalim, by Ram Dagan, TheMarker
The phone never rang, by Ido Dissentchik, Hapoalim
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