Now, I was going to step down as the CEO in May. This was in March of 2005. I was going to step down as CEO, stay as chairman to make sure the transition to a new leadership team would go smoothly, but I stepped down from the whole thing. Spitzer forced me out as CEO and I decided not to stay as chairman.
What happened after that?
The new CEO abandoned all of the risk management controls that we had — literally abandoned them — and discontinued the staff meetings that we had on a Monday morning, that brought everyone, the key people, together. We knew exactly what was happening on a daily basis.
They lost control. If you read the book, which you did, there is a statement from the auditors who went to the then-Acting Chairman Bob Willumstad, and said, “The current management can’t run the company.” They did nothing about it.
The article Exclusive Interview with Former AIG CEO Hank Greenberg: How AIG Went Off Track originally appeared on Fool.com.
Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: Long Jan 2014 $25 Calls on American International Group.
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