Last Thursday, Maurice “Hank” Greenberg and incoming CEO Bob Willumstad met, perhaps a signal at some executive-level detente at troubled insurer AIG. As the Wall Street Journal noted this morning, such a meeting would have been unthinkable only a few months ago. Greenberg, who left the company in 2005 amid alleged accounting improprieties, has recently said AIG is in a “crisis” and is engaged in ongoing legal battles with the company. Willumstad, who joined the board back in 2006 as Chairman and was recently made CEO, told analysts soon after being named CEO (four days to be precise) that having a “more interactive relationship” with Greenberg was one of his objectives.
It’s easy to think that Greenberg is a distraction for the company—the visionary CEO stripped of his company, and identity, won’t let go of the firm he left behind. That’s a common scenario in companies where a CEO ran a firm well for decades—just look at Jack Welch’s recent comments on General Electric’s Jeff Immelt. But Greenberg is so much more than a distraction: As Chairman of Starr International, AIG’s biggest shareholder, Greenberg is unquestionably one of the people Willumstad, as Chairman and CEO, must listen to, and carefully. Conventional wisdom may say that former chiefs should fade quietly into the night. But Willumstad, who now runs a company whose shares have fallen 6% since he took over and whose former chief is also the largest stockholder, may be wise to ignore that tradition.
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