Hank Greenberg has resigned from AIG’s Board of Directors (last Wednesday), but the disarray within AIG continues. This marks the final separation of Greenberg from the company he led for decades and built from a small international insurer to a global force.
It appears that he was “estranged” well before the final resignation, as AIG was evidently withholding financial information from Greenberg. The resignation comes on the heels of the May 31 restatement of earnings by AIG, lowering net income over the last ten years by $3.9 billion (ten percent of total earnings).
Internal sources indicate there is a lack of decisiveness prevalent in AIG and the AIG companies that was previously unheard of. American General has switched target markets and market emphasis several times over the last year, leadership changes that appeared to be in process are now in limbo, and some underwriters at the AIG companies are unsure what they should be writing at what price.
Some confusion is always present in even the best-run companies, as communication through multiple layers and multiple individuals with disparate agendas is unclear at best. However, the extent of the issues at AIG indicates a larger problem. Perhaps the autocratic style that was so successful for the company for four decades is to blame, and/or politics is taking the lead over productivity as individuals scramble to position themselves while the sands shift under them.
What does this mean for you?
If you work at AIG, keep the faith. There are lots of very talented, highly motivated people at AIG, and barring unforeseen criminal indictments of the enterprise itself, the company will survive and prosper. It would be easy to say keep forging ahead and ignore the tumult around you, but probably more intelligent to suggest you keep reading the tea leaves. Unfortunately, so much of success in big companies is based on politics not productivity.
Jun
13
