Consolidated Bank chief saga leaves CBK, board with egg on their faces

I stumbled across what I describe as the top ten (allegedly true) job interview candidate bloopers that were shared by HR professionals.

Number 10: The applicant rented a billboard, which the hiring manager could see from his office, listing his qualifications.

Number 9: Candidate specified that his availability was limited because Friday, Saturday, and Sunday was ‘drinking time’.

Number 8: A job applicant came in for an interview with a parrot on his shoulder.

Number 7: The applicant put up posters of himself in the company parking lot.

Number 6: The applicant had prepaid Chinese food delivered to the room during his interview.

Number 5: The job candidate explained an arrest by stating, ‘We stole a pig, but it was a really small pig.’

Number 4: Once an applicant’s friend came into the interview room and asked, ‘How much longer?’

Number 3: An individual applied for a customer-service job, and when asked what he might not like about the job, he said, ‘Dealing with people.’

Number 2: Someone once blew her nose and lined up the used tissues on the table in front of her.

And the Number 1 craziest interview story is coming up. Last month the local media had a few reports about the appointment process of the proposed CEO for Consolidated Bank. It would be perhaps quite useful to first reflect on this high-ranking role.

The CEO of any bank is the ultimate guardian of that institution’s reputation, which he or she would undertake to guard jealously and assiduously.

Banking is all about reputation. The customer wants to place her hard-earned money in a place where it will remain safe. The customer will also occasionally want to borrow from that good institution, well aware that she has a moral and legal obligation to repay that loan as and when it becomes due.

The bank’s reputation is, therefore, one which invites no doubt whatsoever that deposits will be kept safely and that loans (which are financed by those deposits) will be aggressively monitored and collected as and when they fall due.

The CEO, therefore, cuts the image of that man (or woman) who is in complete control of the ship that is sailing across the chasm of financial greatness. In theory.

What happens in practice is another story altogether. It is a well-known industry secret that bank CEOs are some of the highest leveraged individuals in the country on the strength of their pay slips and “future bonus earnings”.

Who is the (asinine) credit manager who can say a career limiting No to a temporary overdraft request or a term loan application with incomplete security perfection from the CEO?

Unless the central bank inspectors or external auditors specifically a) ask to see borrowings of key senior management and bank directors, and b) know exactly where to look for the unspecified and often hidden temporary overdraft accounts and long-overdue term loans, this often goes unreported and unmonitored in banks with poor internal controls and board supervision. Which is not rare within the Kenyan banking industry.

So when the media reports that the successful candidate for the role of CEO of a local bank received an alleged credit score of “Poor” or 413 on a scale of 200-900, we should immediately sit up and pay attention.

The Central Bank of Kenya requires anyone who will take on an executive role at an institution that it regulates to fill out a form to determine whether they are fit and proper for that role.

The form, titled ‘Criteria For Determining Professional And Moral Suitability Of Persons In Control of Institutions Licensed Under The Banking Act,’ is a comprehensive — and even invasive — seven-page questionnaire that asks for everything save for your golf handicap.

From facts as random as social club memberships to the more topical past employment history and current financial borrowings, the CBK form takes a potential executive through the wringer and spits out a thoroughly scrutinised individual who ostensibly has the “professional and moral suitability” to lead a bank.

Accompanying this form should be clearance from a credit reference bureau, references from previous employers and the ubiquitous certificate of good conduct from the Criminal Investigation Department.

It is, therefore, nothing short of a train smash that a) the CBK gave the green light for an individual with a poor rating from a credit reference bureau to be considered as having the professional and moral suitability to be in control of a bank.

It is noteworthy that Consolidated Bank was created as a result of an amalgamation of nine insolvent banks that had been taken into statutory management by the CBK in the late 1980s and b) that the appointing authority, which would be GOK represented by the Treasury Cabinet secretary as the majority shareholder, would, despite the information about a poor credit reference report, continue to consider said individual as CEO of an institution with a painful history.

The previous CEO and his team have worked extremely hard to redefine Consolidated Bank as an upcoming Kenyan-bred retail and SME bank, thus shedding a lot of its original amalgamation history in the years of slow but steady growth and good performance.

This whole tragedy is topped up by the allegations that some of poor credit ratings emanated from Consolidated Bank itself from whom he had borrowed loans that remain unpaid to date.

This sordid saga is nothing short of embarrassing to the board of the bank, the banking supervision unit of the CBK and ultimately the Treasury Cabinet secretary.

It demonstrates that moral suitability is a shifting target for as long as it can be made to suit a candidate of choice in an extremely morally sensitive industry like banking.

Which then brings me to the Number One job interview blooper. Candidate said “I know that I owe this bank money, but as CEO I’ll have enough power to write it off in the future.”

[email protected]. Twitter: @carolmusyoka