Bank Hapoalim Chairman Yair Seroussi Expected to Step Down Early

Seroussi was entrusted with repairing ties between Hapoalim and the Bank of Israel.

Ofer Vaknin

Yair Seroussi, the chairman of Bank Hapoalim, the country’s largest lender, is expected to step down from his position in the coming months after seven and a half years in the post, even though his contract was due to run until next November.

Seroussi’s early retirement comes after it was revealed at the beginning of this month that the bank, without the knowledge of the Bank of Israel or most members of Hapoalim’s board of directors, paid enhanced severance pay of about 6 million shekels ($1.55 million) to a female employee of the bank who claimed that she had been sexually harassed about 10 years ago by Zion Kenan, who himself stepped down as Hapoalim’s CEO on August 1.

The decisive stages of dealing with the employee’s complaint were said to have been handled by Seroussi himself in consultation with legal counsel and a member of the board of the directors, Prof. Dafna Schwartz. The increased severance pay was made on the commendation of retired labor court Judge Steve Adler, who was appointed arbitrator in the case and ruled that the female employee had not been subject to sexual harassment. Since the matter became public, Seroussi has apologized to Hedva Ber, the supervisor of banks, for not informing the central bank.

“I apologized to the supervisor of banks and the board of directors for not informing them of the case. We will draw conclusions and cooperate with the Bank of Israel and the Israel Securities Authority in any examination that is carried out [on the case],” Seroussi told Channel 2.

Ber is expected to issue a report on the case in the near future. The Bank of Israel would only state the following: “The banking supervisor’s examination [of the case] has not concluded, so any comment on the findings of the examination would be in the nature of speculation.” Bank Hapoalim declined to comment.

Seroussi, who in the past was a senior Finance Ministry official and a member of the boards of a number of companies, and also established the Israel office of the American investment bank Morgan Stanley, was appointed chairman of the Bank Hapoalim board by the bank’s controlling shareholder, Shari Arison. The appointment came at the recommendation of the governor of the Bank of Israel at the time, Stanley Fischer, now vice chairman of the U.S. Federal Reserve.

Seroussi’s appointment was aimed at restoring stable labor relations after the unsettled period during which Danny Dankner was Hapoalim chairman. Dankner was forced out by Fischer and the supervisor of banking at the time, and Seroussi was entrusted with repairing ties between Hapoalim and the central bank.