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Citi mulls board revamp

January 23, 2009 17:38 IST

Battered Citigroup is considering restructuring its board after the departure of long time members Kenneth Derr and Franklin Thomas in the wake of criticism of its ability to supervise its executives and strategy, says a report.

UK daily Financial Times, quoting people close to the development, said, "Citigroup is to revamp its board with the departure of long-standing members Kenneth Derr and Franklin Thomas following criticism of its ability to supervise the troubled company's executives and strategy".

The report, attributing to insiders, noted that Derr, a former chief executive of Chevron and Thomas, who used to run the Ford Foundation, could announce their retirements next month.

Meanwhile, Citi announced that former chief executive of Time Warner Richard Parsons would soon become the chairman.

Parsons succeeds Win Bischoff, who became Chairman in December 2007.

Vikram Pandit-led Citi has posted losses for five consecutive quarters and recently announced its decision to split the entity into two separate businesses -- Citicorp and CitiHoldings.

Moreover, the US Federal government has already pumped in $45 billion into the battered company apart from guaranteeing over $300 billion worth of its assets.

"Investors, governance experts and regulators are believed to have put pressure on Citi to get new blood on its board, which has long been criticised for the large number of former and current chief executives and the long tenures of some of its members," Financial Times said in a report published online.

"They argue that such a make-up can build a bias towards supporting the chief executive," the daily added.

According to the newspaper, the retirement age of the directors of Citi is 72 year but last year, Thomas, who was 73, was given permission to serve another year.

Derr, who sits on the influential nomination and compensation committees of the board, turns 72 this year. Neither would be given an extension in 2009, the report said quoting people close to the situation.

"Other directors, such as the 70-year-old Michael Armstrong, a former chief executive of AT&T, the telecom group, are also believed to be considering stepping down from the board," it said.

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