My readers are also my witnesses. From the start, I never had any illusions about banks. “It is almost certain that they will prefer someone else over me,” I wrote in this column two months ago. “Who wants to bring into the inner circle a total stranger who is not ‘one of our own kind’?”
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“I have no intention of receiving any fee whatsoever for my time,” I also wrote, “not one shekel. Whatever remuneration I will receive I will donate to my favorite charities. I want to be sure that I will not enslave myself for any consideration of personal pleasure or comfort. My independence is very dear to my heart and I am asking to be chosen on that basis.”
Had I known what I know today, it is quite possible that I would not have been so hasty. At the time, I had not the foggiest notion what bank directors make. Today, I know much more. A friend phoned me and asked me whether I had already been told what I was relinquishing; he pressed me to guess how much they earn.
I provided him with my guesstimate. My friend told me I was very far off. “You should know that they make ten to 15 times the amount you suggested,” he said. “You have lost earnings of half a million shekels annually, and a director who sits on many boards can make close to a million.”
Suddenly, it dawned on me: The banks lure their directors with huge salaries and then train their monkeys to see no evil, hear no evil and speak no evil. That is the pattern of behavior of all those who make money from money – that is, from our money. One side offers its udder and the other sucks the milk. One side is the cow and the other is the calf. The question is which side’s appetite is stronger. By contrast, guardians who offer their services free of charge are dangerous creatures and must be driven away because they are simply “unsuitable.” They are the weak link in the food and feeding chain.
The blunders recently made by Bank Leumi were not in the financial area but lay in a weakening of its moral and ethical sensitivity. It lacked accountants who could see the overall bank account, which is more than numbers. It lacked lawyers who could correct the arrangement by which bank customers pay a fee for each line in their bank statement. We saw the powerlessness and myopia of the bank directors who, instead of leaving a lasting impression on the bank’s functions and history, became merely rubber stamps.
We were never able to discover the difference between a bank director and a bank director “who represented the public’s interests.” What public do bank directors in the latter category represent and how do they protect it?
All those who are close to the pot of gold dip their hands to indulge themselves. Israel creates tycoons who support one another. The owners, the chairmen and the chief executive officers generously reward their directors so the directors won't prove stingy when it comes time to raise the value of bonuses.
Why should the institutional shareowners be worried about being generous at our expense? After all, their own day will eventually come. If all the grains of sand are entitled to enjoy the feast of the righteous in the hereafter – the flesh of the leviathan and the wild ox – their rewards have been bestowed upon them by heaven.
That’s the way it goes, my friends; they simply deserve to be richly rewarded. Only if directors are divested of all the benefits that are currently reserved for them can there be a proper balance between the corporate interests and those of the public at large, without whom there are no banks, no cash and no need for bank directors.
Here is a brief, imaginary excerpt from the minutes of the old-new board of directors at its first meeting: “Mr. Chairman, I have a question: Why do Bank Leumi’s CEO Rakefet Russak-Aminoach and chairman David Brodet, Bank Hapoalim’s CEO Zion Kenan and chairman Yair Seroussi, Mizrahi-Tefahot Bank’s outgoing CEO Eli Yones, Israel Discount Bank’s CEO Reuven Spiegel and chairman Yossi Bachar, and First International Bank of Israel’s CEO Smadar Barber-Tsadik and chairman Rony Hizkiyahu earn between NIS 200,000 and NIS 700,000 a month? Why, for crying out loud? You mean they won’t agree to come into the office for ‘only’ NIS 100,000? And if they do not receive incentive pay, does that mean they won’t really put an effort into their jobs? Is greed a hereditary or acquired trait for adult men and women? When does your appetite increase? When your stomach swells, or perhaps your head?”
These are questions that are unsuitable for any self-respecting board of directors. Now all of you understand how correct the selection committee was in its choices.