Hapoalim agrees to reconsider CEO

Board bows to BoI pressure, says it will form search committee; but Keinan still leading candidate.

Shari Arison 248.88 (photo credit: Bloomberg)
Shari Arison 248.88
(photo credit: Bloomberg)
The board of directors of Bank Hapoalim announced Thursday that it would establish a search committee to choose a chief executive officer for the bank, yielding to strong pressure to do so by the Bank of Israel. In late April, the Bank of Israel issued a report rebuking Hapoalim's board and chairman Dan Dankner for not establishing a search committee to choose a new CEO and for taking less than an hour to discuss the resignation of Zvi Ziv and pick Zion Keinan as his replacement. The report also directed the board to take "immediate action" toward correcting its faulty conduct. Supervisor of Banks Rony Hizkiyahu froze the appointment of Keinan five days after he was given the job. After a board meeting Wednesday evening that lasted several hours, the bank announced Thursday that it would set up a committee, but that Keinan would continue to be a leading candidate for the post. Bank of Israel Governor Stanley Fischer told the Knesset Finance Committee last week that he had hoped that Hapoalim's controlling shareholder Shari Arison would replace the bank's senior management quietly, without a public airing of the controversy. "We are not the first country in the world in which the banking supervisor suggests to the controlling shareholders that the senior management should be replaced," Fischer said. "This is generally done quietly, and people are allowed to depart honorably. This was our hope, but it didn't happen." Bloomberg and Ron Friedman contributed to this report.