Stalled CEO Search Betrays Power Struggle at Andersen Worldwide

It's odd to see such a conservative, buttoned-down company get so stymied in a messy political quagmire. But with its democratic election policyoone partner, one vote, majority rulesoAndersen Worldwide has been unable to choose its next CEO. Of course some might say that with 2,700 partners, the real surprise is that they're able to make any decisions at all. Much of the trouble, sources suggest, lies in the fact that the company is in "transition." Andersen Consulting, once a step-child to Arthur Andersen, is now of equal size and has surpassed the accounting firm in terms of revenueothanks in no small part to contracts with financial services institutions. And yet Arthur Andersen partners make up two-thirds of the board and are compensated on a scale equal to their higher revenue-producing colleaguesoa situation the Andersen Consulting partners areounsuprisingly osaid to resent. Although rumors have circulated that this inequity would lead to a corporate split, such a move is highly unlikely, sources say. Andersen Worldwide is actually looking to mend fences in a new strategic campaign, once called Andersen 21.The partners are organizing a "bipartisan" steering committee to plot the company's course into the next millennium. The hope is that once Andersen defines its new direction, the partners will feel comfortable choosing a leader. Talk about Irony; two years ago, former Bankers Trust president Eugene Shanks gets overlooked for the CEO post now held by Frank Newman, arguably as a result of the Procter & Gamble scandal caused by bank traders who failed, P&G claimed, to adequately disclose derviatives-related risks; now, Shanks has launched an enterprise risk management consulting firm. Though many say Shanks was a "scapegoat" for activities he had little or no way of controlling directly, the episode may have been a necessary precursor to the launch of Netrisk, his new company. After all, who better to take on the market than someone who is intimately familiar with risks gone bad? "It's kind of like going out there and getting hired guns," says one source. And the company is armed to the teeth. Among its notable hires is Dan Mudge, who had headed BT's global risk management for nine years. Mudge is now leading Netrisk's risk management group. So far so good: The company recently landed a financial services client, "one of Italy's largest banks." As for Shanks, he fails to see the irony in his new venture; he's just looking for his company "to be a leader in this enterprise risk management field." American know-how seems to appeal to Royal Bank of Canada's CIO search committee. The bank, which spends $600 million a year on technology, is rumored to have three Yankees on its shortlist. So what makes the IT professionals so appealing south of the border? One bank official intimated that slim pickins up north could be a reason. "There are excellent candidates here, they just may not be available for the job." One thing's for sure, though, Canada's consolidated financial services market makes for a lot of bank to manageoeven for an American. -bers tfn.com