Leaders Show Unforgivable Ignorance in OKB Deal
Every person to have ever served on a community non-profit board knows they have accepted responsibility for the health and welfare of the organization, and fiduciary responsibilities. Such responsibilities are not just implied but required by law for board members of a public company.
To that end, the board and stockholders of Old Kent Bank have been very successful, ultimately providing $1.5 billion in new wealth created in Grand Rapids. Unless, of course, community residents deign to leave town in the wake of a public display of incredible ignorance. Indeed business is taking heed.
—According to Securities and Exchange Commission documents, OKB incurred tremendous costs in technological upgrades to remain competitive with larger national financial institutions moving into West Michigan. Thorough analysis showed the on-line banking and other tech costs could not be amortized or recouped.
—Had OKB officers and board members with legal responsibilities not created a plan (ultimately to seek a suitor) the institution would certainly not have sold for so grand a price.
—Old Kent has acquired dozens of smaller banks over the past several years, eliminating up to 30-50 percent of the institutions’ employees. Surely it is no less distasteful a reality whether in Grand Rapids or northern Illinois.
—OKB deliberately sought a suitor it — and the community — believes to serve Grand Rapids as closely as OKB might have. Fifth third has demonstrated for nearly 30 years similar goals, achievements and community partnerships. Its President and CEO George Schaeffer Jr. told the Business Journal, “A stronger community leads to a stronger bank.”
—The “reductions” were expected to be 20 percent, and in fact stand at 16 percent.
—Stockholders in Fifth Third’s hometown of Cincinnati believe the board paid too much and have complained. OKB employees benefited from the deal especially in stock holdings or 401-K earnings.
—The $1.5 billion in real money and new wealth in the Grand Rapids metropolitan area benefits every neighborhood, every neighborhood store and may likely find its way into new community investments.
The merger of the two entities should be applauded for its forethought and success. What can not be applauded — or tolerated — are the deliberate acts of feigned ignorance among public officials lured to front page comment by a textbook display of unethical “journalism.” The daily newspaper has betrayed the West Michigan community, its readers and leaders with deliberate sensationalized “reports” which neither explain, educate (or entertain), and leave most all pertinent facts from stories. This was an opportunity to educate and for every such missed opportunity in this era, forgiveness is impossible. The failure belongs to city “leaders” as much as the paper.