Leumi’s new chairman: Breaker of glass ceilings

1. More than one local glass ceiling was broken yesterday with the appointment of Dr. Samer Haj-Yehia as chairman of Bank Leumi (TASE: LUMI). “The Jerusalemites”, senior government officials, particularly at the Ministry of Finance, who have become accustomed to a smooth transition to plum jobs in the banking system, were routed.

The fact that Dr. Haj-Yehia is an Israeli Arab has also made a considerable crack in the ceiling. Haj-Yehia was not appointed because he is an Arab, unlike the case with senior civil service appointments, since no requirement of affirmative action for non-Jews applies to Bank Leumi. Nor was he chosen despite being an Arab, proof of which is that there was no ambivalence about his selection. Ethnicity was not a consideration – a very good thing, and about time too.

2. Of the twelve members of Bank Leumi’s board of directors, four competed for the chairmanship, which meant that only eight directors could participate in the first round of voting. Had there been another round, ten could have voted.

Here are the numbers of votes received by each candidate: Ohad Marani – 1; Shmuel (Muli) Ben-Zvi – 1; Yitzhak Sharir – 1; Samer Haj-Yehia – 5. A decisive result. Haj-Yehia swayed most of the directors – and they have sat and worked closely together for a long time, clocking up many joint hours, and all of them subject to the same pressures. They know him well.

3. Haj-Yehia’s term as chairman of Bank Leumi will last four and a half years. Not nine years, as with his predecessor David Brodet, and not fourteen, as with Brodet’s predecessor Eitan Raf. Under the Bank of Israel’s Banking Supervision Department’s guidelines, a director of a bank can serve for nine years. Haj-Yehia has been a director of Bank Leumi for four and a half years. He will be chairman until his nine years are up.

4. The Bank Leumi board’s choice yesterday evening also signals the bank’s future direction, by skipping a generation. Brodet, who was once director-general of the Ministry of Finance, is retiring at age 75. The candidate thought to be Haj-Yehia’s closest rival, Ohad Marani, also a former director-general of the Ministry of Finance, is 64. Samer Haj-Yehia is 49. The board made its choice with an eye to the future, to totally digital banking.

5. Haj-Yehia had a flourishing career in the US. He returned to Israel when he was Vice President of Financial Engineering at Fidelity Investments. He was also an outstanding lecturer at MIT, Harvard, Hebrew University, and the Interdisciplinary Center, Herzliya, and an expert consultant on financial markets, regulation, and financial technology. He told his friends: “My children reached the age at which I had to decide either that they would be Americans, or that we would return to be part of the family in Taybeh.” So he returned. To Taybeh. To the big family.

6. Haj-Yehia faces several immediate tasks. The first is to choose a CEO, someone to fill Rakefet Russak-Aminoach’s large and successful shoes. The choice has to fit in with the bank’s goals and the challenges it will face in the coming years, while at the same time ensuring continuity, following a series of departures from the bank’s senior management in recent years.

Then there is the critical matter of improving customer service. The banks, under regulatory guidelines and with the aim of cutting costs, have closed many branches and left behind many affronted and bewildered customers.

Thirdly, the next CEO will have to be capable of grooming potential successors, to ensure future management continuity, under the close direction and supervision of the chairman and the board.

A fourth challenge is digitalization, which will be crucial to banking. Leumi is strong in this area, but the world is moving forward fast.

Then there are the bank’s overseas branches in the UK and the US. How can Leumi extract value from them? A decision has to be made on whether to sell them, or issue shares in them, and whether to expand them.

Published by Globes, Israel business news – en.globes.co.il – on July 1, 2019

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