In choosing Brady Dougan to succeed Oswald Gruebel in its top job, Credit Suisse was certainly taking a calculated risk. Not only does he hail from America, a country whose brash and often flamboyant bankers send shivers up the spines of the conservative Swiss, he was also, at 47, the youngest ever head of a global banking giant. But if the board had set out to write the resumé of their ideal candidate it might well have been a perfect match with Dougan’s.
Brady Dougan was born into a middle class family in the mid-Western state of Illinois. His father, a railroad radio dispatcher, moved the family to a small town in the coal mining belt south of Chicago when Brady was seven. He graduated from an accelerated programme at the University of Chicago in 1982 with a bachelor’s degree in economics and a master’s of business administration.
Even before he graduated, he was working a part time job in the banking industry. Once he left university, he joined the investment banking team in Bankers Trust Corporation, moving swiftly over to join a small group within the bank that was working with a new product idea called derivatives.
By the time he was 24, he had been moved to London and, from there, on to Tokyo, where he built the company’s bond underwriting division. He is reported to have learned to speak Japanese within a year, a remarkable achievement in itself. It is, perhaps, that willingness to totally submerge himself in the local environment that is his greatest asset. Dougan is the ultimate corporate political animal, able to make the right alliances, keep his head down and get on with the job.
While he was in Japan, he became friendly with Allen Wheat, another locally based Bankers Trust executive, and when Wheat moved over to Credit Suisse First Boston, as the company’s investment banking arm was then named, Dougan joined him. The two moved back to New York in 1993 where Wheat took over as President of CSFB, while Dougan was part of his top team, holding senior positions in derivatives, equities, debt and investment banking.
When Wheat was ousted in favour of an axe-wielding, cost-cutting executive from Morgan Stanley, Dougan managed to keep his head below the parapet and get a posting to Zurich, while many of Wheat’s other cronies lost their jobs. During his time in Switzerland, Dougan became a protégé of the company’s co-CEO, Gruebel, who is credited by many as having saved Credit Suisse from suffering the disastrous fallout that its Swiss rival, UBS has experienced in the recent global banking crisis.
Dougan’s alliance with Gruebel was rewarded with the top job in New York in 2004. His steady hand on the tiller at CSFB and his loyalty to the business over personal interest is seen by many as the basis for his subsequent selection to succeed Gruebel on the latter’s retirement. In a statement typical of Dougan’s work ethic, he told a University of Chicago audience in 2005, “I see the kinds of people who sometimes end up in leadership positions. The simple truth is that sometimes they’re more focused on their own success than that of the organisation. Today, that’s a losing proposition.”
As the announcement of Dougan’s appointment to the CEO’s office was made, the bank had just reported record fourth-quarter earnings of 4.67bn Swiss francs ($3.8bn). Six weeks after he took up his post, the global financial crisis unfolded. In some ways, he was lucky – Gruebel’s advice to clients to withdraw their funds from schemes run by Bernard Madoff, and his refusal to join in the sub-prime mortgage securities frenzy meant that the bank avoided the worst of the banking sector implosion.
Still, significant write-downs and a drop in income meant that Credit Suisse recorded record losses in 2008, the first full year of Dougan’s management. To add to his woes, the Obama administration is taking a hard-line position on the tradition of Swiss banking secrecy that enables foreign nationals to evade tax in their home countries, giving private banking clients the jitters.
Dougan, however, remains pragmatic. His programme of cost cutting and strengthening the bank’s capital position turned in a net profit of 2bn francs ($1.7bn) in the first quarter 2009, but he doesn’t think this is an indication that the good old days are back.
“The industry won’t be returning to business as it was,” he told the audience at a recent Swiss business lunch. “Without a doubt, the reputation of our industry has taken a beating. The financial industry will be under scrutiny from shareholders, regulators, clients and the public to address the issues raised by the crisis.”
His solution for Credit Suisse is to target new high-growth regions throughout the world. He has sights on the Far East, including Japan, China and Vietnam, where his address book and knowledge of local customs will be an asset. Rapidly developing economies in South America, such as Brazil and Mexico, are also on the list. “Credit Suisse must become the world’s premier bank, renowned for its expertise in investment banking, private banking and asset management,” he says.
An experienced distance runner, he brings a methodical approach to growth that will give the Swiss a degree of comfort, as will his intention to learn their language. “I’ve spent half my career outside the US,” he says. “The more involved you can get in a country’s culture – and that definitely includes the language – the better you can understand and become a part of it.”
He knows, however, that his plans for growth will be set against the backdrop of a world that eyes its banking fraternity with suspicion. He still believes that industry self-regulation, rather than heavy-handed government is the solution. Calling for greater transparency and understanding of sophisticated financial instruments and more effective assessment of related risks, without too much government intervention that might stymie innovation, he said, “It all comes down to discipline, focus and creative individuals.” All qualities that Brady Dougan has in abundance.