Karen Peetz has tough advice for bankers struggling to adapt to the harsher regulatory environment. “People really need to get it through their thick heads that it is here to stay. You have to adjust your operating model and get on with it, versus fighting, fighting, fighting.”
That’s vintage Peetz, who has honed the art of managing-and leading- through times of change. After the 2008 financial crisis, she played a key role in helping the government execute its Troubled Asset Relief Program. Then she guided her alma mater, Pennsylvania State University, through a devastating period, taking over as chairman of the board of trustees during the Jerry Sandusky sex abuse scandal. And now Peetz is helping reform the controversial tri-party repo market.
Peetz was promoted to president of BNY Mellon, overseeing global client management and regional management for Europe, the Middle East and Africa, Asia and Latin America. She also has responsibility for human resources and BNY Mellon’s treasury services business, two areas in which she has particular expertise, having been personally involved in both over the course of her career.
Peetz, who has been in banking for three decades and at BNY Mellon for the past 15 years, was the company’s first female vice chairman and has sat on its executive committee since July 2007.
Peetz, who led BNY Mellon’s financial markets and treasury services group before her promotion in January, says big problems require new thinking and a good-sized serving of humble pie.
“It really took our industry a long time to realize that the game had changed,” Peetz says. “We need humility as leaders, because we haven’t done everything right. Many of our actions precipitated the financial crisis, collectively, and we have to take responsibility.”
“Culture is at the core of the industry’s future,” Peetz says. “When I think of how I was trained … that’s what we do: risk management. But we, as an industry, got away from training people properly as they come in the door. If you don’t build that culture of risk, this is the kind of thing that happens.”
To that end, BNY Mellon is creating a virtual university with six separate areas of learning, from sales and client service to risk and compliance to professional development. Peetz says the idea for the university-dubbed BKU, the firm’s ticker symbol-came from Chairman and CEO Gerald Hassell, who asked her to spearhead it.
“Then she guided her alma mater, Pennsylvania State University, through a devastating period, taking over as chairman of the board of trustees during the Jerry Sandusky sex abuse scandal. ”
“Guided” is an extremely generous word. Ms. Peetz’s affirmation on behalf of Penn State, in her capacity as Chairwoman of Penn State’s Board of Trustees, but without authorization by the Board (and therefore in violation of the Board’s Standing Orders), that Penn State had in any way enabled or facilitated Jerry Sandusky’s activities gave the NCAA the excuse it needed to slam Penn State with the kind sanctions it reserves for the most dishonest and corrupt athletic programs; sanctions that the Commonwealth Court recently opined were illegitimate.
In addition, Peetz then failed in her obvious duty to tell the NCAA that she had no authority to speak on behalf of Penn State, and then ignored her obvious duty to evaluate Louis Freeh’s report to uncover the numerous defects and outright dishonesty in its content.
Her fellow Trustee, Kenneth Frazier, shares responsibility for the consequences to Penn State because he also affirmed the Freeh Report’s contents. Frazier later lashed out in a racially charged tirade against an alumnus who challenged this course of action.
I don’t know how Peetz does things at her bank, but she is not respected at Penn State, and she is no role model for taking responsibility in a crisis. Even though the Commonwealth Court hinted very strongly that the sanctions are not legitimate, Peetz voted with Frazier and other problem Trustees to continue to support them. This prompted State Senator John Yudichak to say that personal agendas, and not the well-being of Penn State, were driving the Board’s actions.
You need to better research Karen Peetz’s contribution to managing Penn State’s crisis. She couldnt have been more irresponsible and remiss in living up to her fiduciary responsibilities. Check the facts, not what she or her staff sent you.
You need to check your facts about the PSU board contention. Her lack of leadership is what caused 400 million in damage to The university and counting. Her promise of transparency and that by 2014 the scandal would be a distant memory are the but of many jokes …
I don’t know if Ms. Peetz is an excellent banker. Perhaps she is. She was, however, an exceptionally poor leader of Penn State’s Board. This is becoming more apparent as time passes. The lack of fiduciary leadership of the entire board was recently referenced in a Pennsylvania Commonwealth Court decision.
One thing is sure. Ms. Peetz has a penchant for the ill-considered declarative statement. The above article has her quoted in typical fashion. In the case of Penn State she noted that the entire Sandusky affair would have been forgotten by 2014. We haven’t forgotten Ms. Peetz.
A person with as great a predilection for the binary statement as she has should resign with similar braggadocio from Penn State’s Board. Today would be a good day to do so.
I’m surprised you would do a feature on Karen Peetz. She has no soul and she has proven terrible at fulfilling her fiduciary duties in the past. I suspect that she’ll ultimately be sued (successfully) for dereliction of her fiduciary duty and possibly defamation of character for her role in the Sandusky scandal. As a power player on the BoT at Penn State, she “succeeded” in turning the Jerry Sandusky scandal into a PSU scandal and in the process did her very best to direct all the blame to others to ensure that the media wouldn’t ask the obvious question – Just what the heck was the executive committee of the BoT doing all those years with dozens of financial dealings with the Second Mile, Jerry Sandusky’s charity? She and other BoT power players seemed willing to sacrifice the reputation of PSU and tens of *millions* of dollars of PSU’s funds to avoid any scrutiny themselves. She was horribly wrong in her prediction that the Sandusky scandal would be long forgotten by everyone by 2014. One has to wonder how much she, or BNY Mellon, paid for this puff piece.
Your statement that Ms. Peetz guided her alma mater through a devastating period is a matter of opinion. The current opinion offered by the Commonwealth Court in Pennsylvania is that the Board of Trustees under Ms. Peetz’s leadership was derelict in its fiduciary duty to the University for unquestioningly accepting the sanctions placed on PSU by the NCAA, which obviously overstepped its authority. In addition, the Board’s handling of the Sandusky scandal was named the #1 PR disaster for two consecutive years.
As an alumnus of Penn State, I have yet to see Peetz and her cohorts on the Board lead with this humility she refers to. On the contrary, the Board has refused to admit they made any mistakes and are using University money to pay consultants to demonstrate how wonderful they are.
Granted, Ms. Peetz took over as Chairman. Then she began to disregard her fiduciary responsibility to her Alma Mater and lead them, through her unwarranted and unapproved acceptance of the Freeh Report, into the NCAA sanctions. Quite a feat for someone with such touted leadership qualifications ! Her guidance has put PSU into the very unenviable position of having to make excuses and apologies for an episode that could have taken a much better course. Her panic at the first signs of pressure from the media and her abandonment of the core principals of the University speak volumes to HER character and understanding of true leadership. I believe her actions will, for a very long time to come, have negative repercussions on the Board she led, the University as a whole and to the Community she left hanging in the breeze !!!