Maor thwarted

Bank Leumi CEO's decision to withdraw her candidacy for her bank’s chairmanship is arguably her greatest contribution to this country’s economic well-being.

February 18, 2010 11:17
3 minute read.
galia maor meets 88 298

galia maor meets 88 298. (photo credit: Courtesy)


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Bank Leumi CEO Galia Maor is justifiably ranked among Israel’s foremost business community luminaries. Her talent and proven record of success are indisputable. Nevertheless, her decision to withdraw her candidacy for her bank’s chairmanship is arguably her greatest contribution to this country’s economic well-being.

To be sure, she didn’t do it voluntarily. Maor was left with little face-saving alternative since opposition to her candidacy was gradually marshaled from all corners of the civic, political and judicial arenas. Maor is ultra-powerful, and her backers hardly lacked clout. Hence, the fact that she could be foiled is no mean feat and a glowing badge of honor for our society. The unlikely coalition that blocked her upheld and bolstered no less than our collective propriety and financial hygiene.

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It was hardly self-evident that this coalition – informal and loose – would achieve its objective. The first to scream foul was Finance Minister Yuval Steinitz, who was raked over the coals for “political interference.” But his objection found an improbable echo at the opposite side of the political spectrum – with Labor MK Shelly Yacimovich. Watchdog organization Ometz soon joined, followed by the Movement for Quality Government in Israel.

Justice Minister Yaakov Neeman was the first to find fault with Maor’s candidacy on the legal plane. In his first important decision, new Attorney-General Yehuda Weinstein also nixed the candidacy. A final blow was delivered by Israel Securities Authority chairman Zohar Goshen, who contended that Bank Leumi’s own charter prevented Maor from nominating herself as a director. Maor argued she could do so by virtue of being a shareholder.

This was her technical bid to circumvent the two-year cooling-off period mandated by law before she could move from the executive post she held for the past 15 years to the bank’s directorship. The rule was imposed after the Treasury bailed out the country’s leading banks in the mid-1980s subsequent to their artificially inflating the value of their own stocks. Bank Leumi is still bound to these legal strictures.

Maor was technically merely seeking to be elected to the bank’s board of directors, yet it is from the directors’ ranks that the next chairperson is to be chosen. Incumbent chairman Eitan Raff is retiring next month. Maor was considered a shoo-in to succeed him, and her strategy was to skirt the cooling-off demand.

However, legal requirements for a cooling-off period are eminently reasonable. The board of directors is a supervisory body, tasked with, among other responsibilities, scrutinizing Maor’s current executive function. It is more than unseemly for someone to hop instantly from the top executive post to one that evaluates her just-performed duties on the managerial side of the operation.


There’s a reason the rule is on the books: to prevent precisely what Maor sought to pull off. Nobody is objective enough to examine his/her own work, nor should such patently impossible objectivity be demanded of anyone.

The conflict of interests here is inbuilt and unquestionable. Had Maor’s plan worked, she would essentially have installed herself as super-CEO in the guise of top director. This is similar, perhaps, to an outgoing prime minister appointing himself state comptroller. A giant bank – especially one in which the taxpayer still has such a large stake – is nobody’s private dominion.

When something as basic as the barrier between the supervisory and managerial branches of a crucially important institution is threatened, the public’s representatives would have been grossly remiss not to protest. We can be proud of a system that did not allow the barrier to be knocked down.

As a society, we need to be thankful that Maor was thwarted and that enough disparate forces were determined not to allow the travesty. What bothered her opponents wasn’t an inconsequential trifle. Had Maor gotten her way, it would have signaled that the law of the land applies only to some, and not to the higher and mightier.

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