Governance as the First Line of Control
Governance is the quiet foundation of transformation, something often not celebrated in boardrooms, and sometimes treated as an administrative burden rather than a strategic advantage. Governance is control, the magic thing that turns ambition into resilience and leads the biggest, most prestigious institutions to succeed.
When I joined Credit Suisse in 2013, that felt like a sugar rush. For a professional shaped by Lean Six Sigma and continuous improvement, the changes were exhilarating, seen as a lifetime opportunity of working for a respected financial institution, a global bank, a complex enterprise bringing the opportunity of enabling discipline and clarity into one of the most competitive environments in the world. That looked to me like finally being in the right place, at the right time.
But time would soon show me things were different, and what seemed like the beginning of a promising new chapter was intertwined with a long, slow decline for the bank. Credit Suisse had long been a symbol of Swiss banking excellence. Since it was founded in 1856, it built a reputation for stability and discretion. The brand attracted wealth from all around the world, from European dynasties to emerging-market elites. For decades, the bank stood for continuity in an industry often defined by volatility, but that would soon change.
Cracks on the surface were visible in 2013, only a few years away from the 2007–2008 financial crisis, which had shaken the foundation of global finance. Credit Suisse, like many banks, survived, but its once-proud investment banking division was now a source of regulatory scrutiny and financial instability. That year, a memoir from Jordan Belfort published in 2007 became a movie with Leonardo DiCaprio, and The Wolf of Wall Street would become emblematic of the outsized profits in the boom years, showing a cautionary tale of unchecked ambition, greed, and corruption.
Investment Banking: Engine and Liability
To understand Credit Suisse’s governance crisis, maybe first we must take a look at investment banking. That’s not like the traditional retail banking with deposits, loans, and mortgages that most people have, but about raising capital, structuring deals, trading securities, and bonds in the stock exchange. Something thriving on the scale, leverage, and innovation of financial products. When it works well, it is the fuel for corporate growth, infrastructure projects, and global trade. When it doesn’t, it amplifies risk until entire economies tremble.
The subprime mortgage crisis was a textbook case, with investment banks packaging risky loans into complex securities, selling them globally, and insuring them with fragile financial instruments. When defaults cascaded, the whole system imploded. Credit Suisse did not suffer losses as much as Lehman Brothers or Bear Stearns, but it was still deeply entangled in this mess.
When I started there, the world was still adjusting with regulators being stricter, investors more cautious, and the reputations of certain financial institutions becoming increasingly more fragile. Credit Suisse’s investment banking arm now looked like a better-managed liability, but still a reminder of how playing without rules could bankrupt not only firms but even countries.
Credit Suisse’s other money engine was private banking and wealth management. This was not like investment banking, something for high-net-worth clients where the bank was advising them to preserve wealth, discreetly managing assets across jurisdictions, and a selling point for decades. Switzerland's financial secrecy has made it one of the world's top places to store cash, together with tax havens like Singapore, the Cayman Islands, Bermuda, and the British Virgin Islands.
All that discretion was murky and covered in darkness, and among UHNW (Ultra-High-Net-Worth clients, with more than USD 30 million in investable assets, were Russian oligarchs seeking to move fortunes into Western markets. There were African political elites accused of corruption and genocide in their home countries, and those were the kind of customers that Credit Suisse had. What they saw as exclusivity, regulators began to see as unethical complicity, so the very foundation of private banking became both a reputational and ethical burden.
This dual reliance on investment banking excess and private banking secrecy created an institution that was profitable in the short term but unstable in the long term. Governance structures that should have mitigated these risks were either absent, ignored, or undermined by an elite of bankers who saw no need to set guardrails, because all was profitable and acceptable.
The Dance of Chairs at the Top
Leadership reflected these contradictions with Brady Dougan, Chief Executive Officer since 2007, and one of Wall Street's most successful investment bankers. That guy symbolized both Credit Suisse’s ambitions and its blind spots, and the globalized risk-embracing culture that had brought both growth and scandal.
Brady pleaded guilty in a U.S. court in 2014, admitting to helping clients evade taxes, without flinching. The case ended with a $2.6 billion fine and the acknowledgment that governance had failed at the highest levels. Dougan had a nice agreement with the Bank, because he never shared which of his clients evaded taxes. He survived the fallout, but Credit Suisse’s credibility was fatally weakened. One day, I came back from work, and my son asked, “Daddy, what are you doing at work?” to which I answered with a smirk, “Dad works for criminals”.
One year later, a respected outsider from the insurance industry became the new CEO. His name is Tidjane Thiam. He started at McKinsey from 1986 to 1994, held senior roles at Aviva and Prudential, and today he helps to strengthen governance on the board of directors of one of the largest communication groups in the world. Before joining Credit Suisse, he pointed out a bias that prevented him from working for financial institutions in France, which divided opinions. Some thought he was bold and courageous, led by a strong ethical code, and others thought he was reckless and ungrateful to a protective system that nurtured him.
Whatever the case, the Ivory Coast trailblazer was hired in 2015, implemented a three-year restructuring program, evolving the bank’s target operating model to a simplified, wealth-management-centric business, moving away from a large investment bank. That helped Credit Suisse to achieve its highest profits in 2018 since the decade started.
Not long after that, he was involved in a power struggle, deemed “not Swiss enough,” and pushed to resign in 2020. During one meeting with the Credit Suisse Board, he asked: “Who do we have to get rid of? The one who creates the problems or the one who solves them?” A few hours later, the board of directors answered his question by showing him the exit. Between 2013 and 2015, I saw the Bank’s struggle with the power-mad and the unethical, but I had big hopes that even after my departure, this would be sorted with the new CEO. Regardless of his efforts, the culture remained fossilized, and the structures unchanged until the bank collapsed. Governance was widely adopted, but without a true leader to drive actions that were more spoken than it was practiced.
The endgame came in 2023, when UBS, Credit Suisse’s longtime rival, acquired the bank in a forced deal brokered by Swiss regulators. The price was humiliating: CHF 3 billion, a fraction of the bank’s former market capitalization, which had exceeded CHF 25 billion in 2015.
For those who remembered the financial crisis, the parallels were striking. In 2007 and 2008, governments forced stronger institutions to absorb weaker ones. JPMorgan Chase took on Bear Stearns, Bank of America swallowed Merrill Lynch, and Barclays acquired Lehman’s U.S. assets. These were not mergers of strategy but rescues born of necessity. Credit Suisse’s absorption into UBS followed the same logic, showing that the bank was no longer viable on its own.
Governance failures can be brushed under the carpet, but they don’t stay hidden for too long. That’s the kind of thing that keeps piling up silently until responsible action is unavoidable, quite often in the form of collapse or absorption.
Governance as the First Line of Control
What does this mean for digital transformation? That governance is not bureaucracy, a compliance exercise, or a box-ticking ritual which happens before every audit. Governance is the first line of Control, the system that ensures transparency, accountability, and sustainability.
In Credit Suisse’s case, governance failed to control the excesses of investment banking, failed to impose transparency on private banking, and failed to reform leadership culture. The result was predictable, with a once-proud institution becoming a distressed asset. For leaders in any industry, governance must be embedded at every level: In strategy, to ensure ambition is balanced with accountability. In operations, to ensure processes are transparent and consistent. And finally, in culture, to ensure ethics and fairness guide decisions. Without governance, transformation is fragile, but when it’s used well, the transformation becomes durable.
At a certain point, employees believed themselves to be part of an institution that represented the pinnacle of finance. But beneath the surface, they were engulfed on a stage where ethics and governance had already failed. The collapse of Credit Suisse is not just a banking story, but a governance tale with a reminder that control mechanisms are not about imposing rules to restrict growth, they care about long-term strategy and are all about sustaining growth.