Parsons to the rescue

The toughest job in America went to an African-American Tuesday.
Richard Parsons has stepped out of the frying pan into the fire as new chairman of Citigroup.
President Obama’s plate of crises looks tame by comparison.
But Parsons will bring the same kind of confidence.
He’s been down this path before.
As I wrote in Success Secrets of Black Executives 17 years ago, African-Americans generally rise to positions of responsibility when major institutions are in crisis.
Parsons took over Dime Savings Bank before emerging as the survivor in a tangled executive web at AOL Time Warner.
Citigroup, now splitting into two, as we recommended in a recent blog, has a similar bubble to the AOL Time Warner conglomerate, although from different sources.
In common is the inflated balance sheet from intangible and apparently unsubstantiated assets.
AOL was worth more than the established businesses of Time Warner, basically because some analysts said so.
Nobody really knows yet what Citigroup has been basing its capitalization on. Taxpayers are on the hook for upwards of $300 billion of “troubled assets.”
Like Obama, Parsons primary asset is the ability to restore credibility.
He could probably replay the Obama inaugural address to his shareholders.
But to his credit, he’s turned two companies around already. So he’s likely to get enough time to deliver the harsh medicine needed to turn Citigroup into a leaner, more responsible company.
It appears to indicate that the presence of the Obama administration makes African-American executives seem more valuable.
It has to play on their mind that the biggest shareholder and regulator is now led by a community oriented advocate of working people.
Parsons has also found the time to pursue the revitalization of Harlem, particularly the Apollo Theatre, and be active in institutions like Howard University.
It works to the benefit of the new President to have someone whose advice he values at the helm of a company which potentially could be the biggest economic timebomb in the economy.
My bet is that both will succeed, because their experiences give them the resilience and judgment to make good choices.
My piece in the New York Society of Security Analysts October newsletter seems to be prescient, as bigger companies begin to respond to the lead of the new administration.


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