Michigan National Corp. has formally cut the last of its ties to former chief executive Robert J. Mylod, elevating an outside director to chairman of the board.

Mr. Mylod, the embattled former chief executive of the Farmington Hills- based bank, stepped down as chairman last Wednesday. James A. Williams, a 53-year-old suburban Detroit corporate and real estate attorney, was elected to head the board.

Mr. Williams, chairman and president of Williams, Schafer, Ruby & Williams, has been on the Michigan National board since 1989.

Michael Moran, an analyst with Detroit-based Roney & Co., said that having a professional from the area head the board gives the perception the Australian-owned bank still has local ties. National Australia Bank Ltd. bought Michigan National last November.

"Clearly the decision-making will be made out of Australia. This is not your traditional chairman's post," Mr. Moran said.

Mr. Mylod had a rough ride at Michigan National. Some shareholders were highly critical of his management and demanded the bank be sold. Doug Ebert, a turnaround specialist, was brought in as president and chief operating officer in December 1993. Mr. Ebert replaced Mr. Mylod as chief executive when National Australia purchased the bank.

Mr. Mylod's separation from the $8.5 billion-asset Michigan National had been anticipated since the company announced its intention to sell.

Mr. Ebert said Mr. Mylod had moved from Michigan National's headquarters into private offices days after the acquisition was completed.

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