CEO debacle at Danske Bank draws warning from shareholders

Danske Bank A/S has once again lost a chief executive, ushered out under yet another cloud of scandal. Denmark's main shareholder group says the question now is whether there's such a thing as a qualified CEO with a perfectly clean record.

The biggest Danish bank stunned investors when it revealed it was parting ways with Chris Vogelzang, its third CEO in as many years. The 58-year-old is leaving Danske after becoming the subject of an investigation tied to his former employer, ABN Amro, and its alleged failure to live up to antimoney laundering laws.

Mikael Bak, the head of the Danish Shareholders' Association, says Vogelzang's departure is "regrettable." He also says it's possible that the modernday "code of ethics, in a way, makes it difficult to recruit top managers."

"It's good for society that the ethical judgment is tough," he said. "But when it becomes so tough that it limits the number of candidates for top managerial positions, it may become problematic from a shareholder's point of view."

Shares in Copenhagenbased Danske slid for a second day, with their 3.8% decline putting the bank at the bottom of the Bloomberg index of European financial stocks.

Danske's board chose Vogelzang back in 2019, after a drawn-out and difficult process. The bank, which is itself being investigated in the U.S. and Europe for its role at the center of a vast Estonian laundering scandal, had fired Thomas Borgen as CEO in late 2018. Efforts to get Danske's chief financial officer promoted to the top job backfired when the Danish regulator said he wasn't experienced enough.

An interim CEO was then kicked out after he got caught up in a separate scandal. Vogelzang was thoroughly vetted, according to Chairman Karsten Dybvad, whose predecessor was ousted for failing to prevent Danske's laundering scandal. "We really looked into everything at that time. We were very careful." So news of the Dutch criminal investigation was a "surprise," Dybvad said by phone.

Denmark's financial workers' union said Vogelzang's departure was "disappointing." Danske's staff "are now being exposed to yet another [leadership] change," Chairman Kent Petersen and Danske Bank's union representative, Kirsten Ebbe Brich, said in a joint statement.