As I’m writing this blog post, J.P. Morgan shareholders are gathering in Tampa for their annual meeting. At the top of everybody’s mind will be the $2.3 billion in trading losses the bank fessed up to recently. As its CEO, Jamie Dimon, admitted, the blunder handed ammunition to proponents of new, complex regulations that would further limit certain banking activities.
The banking giant’s misstep has many facets and is already claiming casualties at the highest levels of Wall Street, but the most serious ramifications may be of the public relations variety. For a bank with a market cap of $142 billion, a $2 billion loss won’t be severely damaging. But it could spell big trouble if the bank loses profitable pieces of its business in the future as a result.
But you don’t need a recap from me. The Wall Street Journal has plenty of excellent coverage of the story. From a PR perspective, the most interesting thing will be how Mr. Dimon answers questions at the meeting. The Journal pointed out something that became abundantly clear in the wake of the crisis: “Dimon is not one to shy away from questions so be prepared for answers.”
SunTrust’s CEO Bill Rogers echoed the same sentiments in a Bloomberg television interview. (In the interest of full disclosure, SunTrust is a client of mine). In response to a question from the Bloomberg reporter, and after remarking light-heartedly that Dimon probably doesn’t need his advice, Rogers said that the CEO met the crisis “head on and I think that is what CEOs are supposed to do.”
I find it refreshing when top executives meet challenges boldly and with candor. Watch the proceedings in Tampa closely and measure Dimon’s responses against the Journal’s prediction that attendees will get real answers to their questions. My detractors might argue that the mistake was so big that he had to be candid, but I disagree. I’ve seen too many executives try to sugar coat irrefutably bad news.
In my opinion, Dimon knows that he’s talking to a smart audience and knows better than to talk down to them. Whether or not J.P. Morgan ultimately wins the regulatory fight in Washington, D.C., Dimon’s approach is a wise one and will earn him – and his bank – respect.
Do you think Dimon could have handled the crisis any better? Share your thoughts in the comments section below.