Interests of charitable trust may differ from that of co: JP Morgan chairman & CEO Jamie Dimon
MUMBAI: JP Morgan is the world’s most valuable bank, and its chairman and CEO Jamie Dimon is the longest serving chief of a large global bank. In an interview with TOI, Dimon speaks of what it takes to run America’s largest bank and his definition of success.You completed two decades at JPMorgan this year. What does it take to run a bank successfully for two decades? Is it a conservative approach?I took over Bank One in 2000 which effectively took control of JP Morgan, so it has been closer to 26 years. I consider myself conservative, but banking always involves risk. Good risk-taking is analytical, not guesswork: assess competitors, costs, capital, liquidity and stress scenarios.You need to know the details, study the data and be honest about results. Success is not just profit; it’s about customers, products, execution and how you compare with the best. Have curiosity, courage and grit, and tell the board more about what went wrong than what went right. That is how you improve.
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When you’re already the most valuable, largest bank, how do you measure success as a CEO?Ultimately, value matters, but a good company is more than profit. Are you retaining, hiring and training good people and building a culture of openness, curiosity and ambition across technology, products and systems? Maximising profit means little if products, systems or compliance fail and regulators are unhappy. You have to judge the whole business.We’re seeing a lot of leadership changes in India. What should the objectives be for a CEO? Should it be just shareholder returns and customer satisfaction, or should it go beyond that?It is about the whole institution: products, services, systems, people, culture, ethics and compliance. In India, that means serving clients while meeting govt and regulatory expectations. If a new system strengthens the business for 20 years, build it even if it hurts near-term profits or the share price. We also measure market share, competition and customer satisfaction because all three matter.You introduced initiatives to help redevelop Detroit. Do you think that large institutions like JPMorgan should go beyond their role in just banking and look at benefiting society? And what’s the best structure for doing good?Absolutely. It is part of our job. In India, we look to help lift the country through how we operate, serve our clients and raise capital. Since 2019, we’ve raised and provided clients with more than $84 billion in capital and credit. And since 2015, we have contributed more than $90 million in donations and helped more than 100,000 young people develop skills and access careers through our partnerships with nonprofits.A healthy company helps clients and lifts society, and philanthropy must also deliver results. In Detroit, we made a multiyear commitment covering jobs, skills and healthcare, bringing all our businesses together. We learned from it and now apply the model in other cities. For CEOs, lifting society means doing both the commercial and philanthropic work.In Detroit, we had a great leader in the mayor who said, “I’ll work with anybody who helps me.” He didn’t say, “I’m not going to speak to business. I’m not going to speak to philanthropy. I’m not going to speak to civil society.” He got everyone to the table to address basic needs such as housing, street lights, ambulances, policing, taxes and schools. He asked for help, acted on it and changed the city.A lot of business houses in Europe and in India, like the Tatas, have a structure where they are owned by charitable trusts, and that’s the route used to do good. Do you think that is the right structure for doing good?I’m not saying it’s always bad. A company should be run properly, and the interests of a charitable trust could be very different from the interests of a company. A company has got to be healthy and vibrant and have proper governance. A structure like that sometimes works against that.I have seen boards in big American companies that are more obsessed with how they look than whether the company is building great products. And that is bad not just for the company, but for society. If the company isn’t healthy and vibrant, if it has the wrong goals, then it’s bad for jobs, capital formation and the country. So you’ve got to be quite careful with something like that.I understand what you are referring to, and, to be clear, I think the world of Chandra. He’s done an extraordinary job in creating value for the foundations. Corporate governance is critical for a successful economy and its companies, and if changes are needed to corporate structures, they should be made.When I walk into the boardroom, I ask the questions: “What’s the right thing to do for the company, its clients and the community?”When do you think the Fed rate hike will start hurting and put stress on businesses?At this point, it doesn’t, but at some point it will start to put stress. I don’t think the short rate is that important; I think it’s more about the 10-year rate. I don’t think one more 25-basis-point rate hike would do it. I’m very sympathetic to those facing stress, but I don’t put that in the systemic category.
