Watchdog: Dankner Can't Keep Corner Office

When Danny Dankner retires as vice chairman of Bank Hapoalim's board of directors in two weeks he will also have to pack up his personal effects and move out of the office next door to CEO Zvi Ziv. This was agreed between Dankner and the central bank Supervisor of Banks Yoav Lehman.

Dankner's office shares part of the seventh floor of the bank's headquarters with Ziv's, including a common administrative services area. Anyone entering Ziv's office must pass the entrance to Dankner's office through the common space.

Lehman demanded that Dankner resign because the supervisor is against controlling shareholders acting as paid chairmen and vice chairmen of banks. The policy is to distance controlling shareholders from close contact with managers to avoid potential conflicts of interest between the owners and the bank.

Last week Bank Hapoalim announced that Dankner would be appointed to the board of directors of the subsidiary Poalim Capital Markets, which handles the banks non-financial investments. Dankner will continue as a director at the bank as well as on various committees including the credit and wages committees.

According to the agreement, the bank will now build a new office for Dankner on the seventh floor but distant from Ziv's office.

The supervisor of banks has in the past two years pushed the policy of putting distance between bank directors and bank managements. Lehman would like to emphasize the role of the directors as supervisors of management, and that of managers running the bank day-to-day.

This policy has included a prohibition against directors approaching managers directly on business initiatives, on matters related to specific clients, or on specific investments.

The instruction mandates that these questions may be raised only through the chief executive officer.