# At last, Citi’s board takes over

1 Opinion October 18, 2012 Financial News ![Roy C. Smith](/sites/default/files/styles/246w/public/assets/images/uat_025572.jpg?itok=Kn4Ckx0s) By Roy C. Smith, Kenneth G. Langone Professor of Entrepreneurship and Finance and Professor of Management Practice > Many investors would think that this was an insupportable condition, and important changes would have to be made for the bank to recover.

**In a normal bank, a CEO transition is announced in advance, the board forms a search committee and the incumbent stays on until a replacement is found.**

On Tuesday, the Citigroup board, chaired by Michael O’Neill, announced the resignations – effective immediately – of chief executive Vikram Pandit and chief operating officer John Havens, a day after they had presided at a conference call announcing another round of lacklustre quarterly results.

The quarter was most affected by the sale of a further 14% interest in Morgan Stanley Smith Barney at a surprisingly low valuation that required a $4.7bn pre-tax write off. This was unpleasant, but not unexpected.

Pandit’s main contribution to Citigroup is its strategy to divide into two businesses – Citicorp, a global bank, and Citi Holdings, a junk yard of misbegotten investments – and to liquidate the latter as soon as possible. Five years later, Citi Holdings still accounted for 9% of the Citigroup balance sheet, but $3.6bn in losses.

Read full article as published in [Financial News](http://www.efinancialnews.com/story/2012-10-18/citigroup-vikram-pandit-board-comment?uniquekey=508008ba9a0c1-109328).
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