“We mustn’t have cold feet”

Governance - 3/19/2016

Ariane de Rothschild is a woman of character and among the innovators of the financial industry. The Edmond de Rothschild Group, which she heads, has wide-ranging operations in numerous countries including the bank in Geneva. She became CEO a year ago and is not afraid to speak her mind, a rarity in the plush milieu of Swiss banking.

​Your bank has just reported its 2015 results. How would you assess them?

They were good. Assets under management reached an all-time high of CHF 114.8 billion for our Swiss hub, up nearly 5%. The net inflow of fresh money totalled CHF 8.2 billion, also a record, and client funds within the Group as a whole amount to nearly CHF 163 billion. The consolidated net profit of Edmond de Rothschild (Suisse) came to CHF 56 million and our capital ratio worked out to 31%, well above the legal minimum. In the current context, this was a fine performance that illustrates the drive of our sales force, the relevance of our product offering and the commitment of our teams. Last year I became CEO two days before the Swiss National Bank scrapped its euro/franc floor rate and introduced negative interest rates. That was my welcome present!

How did your first year go?

It’s one thing to be a director and quite another to be chief executive. During the first quarter I took charge of each of the business segments directly to understand their functions and get to know their management teams. There’s a lot of work to be done between the Geneva, Paris and Luxembourg hubs and the challenges they face are very different. It was like climbing Mount Everest. Halfway through 2015 I started forming a team around me. By the end of the year we closed the book on the US tax dispute by paying a $45.24 million fine. I had our defence taken over by a new lawyer three months before the deadline because I didn’t like our roadmap. As a Geneva-based entity, we had opted for retrenchment behind Swiss law, which exempted us. But this choice fell on deaf ears at the US Justice Department, so I preferred to make a fresh start on other premises.

You like highly uncertain conditions, don’t you?

Yes, but what I really enjoy is building a team and infusing it with a state of mind. My executive committee exudes a blended atmosphere, not just warm and close like a family but also highly competitive. I’m very demanding but I also like us to have a good time together. We work hard and we celebrate our successes heartily. It’s unusual to operate this way in Switzerland.

How have you changed the group’s corporate culture?

We have been goaded on by the unforgiving markets and the demands of competitiveness. We simply had to step on it. When I arrived at the Bank, it was described to me as a "Sleeping Beauty". The aim is to turn it into a beauty of a bank and I’m thrilled by the transformation! Edmond de Rothschild is an extraordinary brand but I’ve seen that there can be a gap between how the brand is perceived and the reality behind it. This happens to other companies in other sectors as well. Take the word "survival", for example. In our Group it used to be misinterpreted. Those who want to survive don’t just sit there, like a bowl of cherries. Staying in the game is the result of anticipation and a large appetite for risk. Without innovation, we regress.

What have you changed in the life of the group’s teams?

At the start I would come in on Sundays, which surprised the security guards. But one can’t sustain that kind of pace. For your teams you need to show that, even if you have everything, you can’t rest on your laurels and that our values should be to make an impact and be committed. The banking industry shouldn’t be a cold, distant place. I myself have always felt a passion for it. I’d like to see things done passionately. "Soft inside" isn’t my strong suit. That’s the way banks have traditionally managed their clients’ affairs. We are a jointly responsible team; that’s an important concept in banking. We need to encourage the personal drive of each team member.

How do you work?

I am very close to my direct teams and don’t have much use for protocol. People aren’t always used to this. I have meetings and phone calls with my teams nearly every day on all matters. I like to see people face to face. I also believe in open discussions with employees at lower levels, because in our line of work there’s a high risk of being sealed off in an aloof chain of command. To challenge your teams you have to meet with them. I like getting down to the nitty-gritty of a subject, arriving at a decision that everyone will accept and then putting the right person in charge of handling the problem.

How does all this sit with your husband Benjamin? You could well be a unique couple in that one of you owns the company while the other manages it.

We used to talk a great deal, at the beginning, but now I only refer to him on strategic matters. We have to find the right "feel good" areas for each of us. He doesn’t like to get involved in everyday business; that’s not his cup of tea. Personally I’m the exact opposite: I’m uncomfortable if I can’t take a hands-on approach. He is more detached and I like to press ahead. We’re complementary.

You are in a legal battle with your French cousins to ensure that all the branches of the family use the Rothschild surname with a first name. How is the case progressing?
The proceedings are running their course. In a world that requires clear signals, we have to assert the identity of each branch. Naturally Benjamin is alongside me in this battle because it’s his name.

You have four daughters aged 13 to 20. How do you foresee handing down the business?

In families like ours, where the parents are very busy, the children watch you. They make judgments and tell you, "I could never get into your line of work". But then, gradually, they come back to you and say, "Actually, I’ve thought about it some more…." I take a benevolent and amused view of my daughters’ judgments. With four children who have grown up in environments so steeped in business and complexity, I would be very surprised if at least one of them doesn’t take an interest in finance. I myself grew up in this type of environment, so of course I project.

You have a reputation as a mould-breaker…

(Laughs) Well it’s not deliberate!


Of course not, but what makes you tick?

I’ve thought a lot about this. Actually I abhor received wisdom. It makes me shudder. Growing up in Africa and Latin America as a member of a European minority surely heightened my awareness. That kind of situation enables you to get to know wonderful people and cultures because you have no prejudices. We are all forever being put into moulds and I hate that.

You didn’t convert to Judaism?

No, because I’m not a religious person. For me there would be moral obstacles to considering a conversion. I prefer to follow my own lights and not plunge into a process that wouldn’t be right with regard to those who believe. My daughters will therefore be free to make their own choice.

Did «being put into a mould» start during your career in trading?

Yes. I was one of two women in a team of 80 traders. We had to wear black, ankle-length skirts. If I put on a beige one, I was admonished. They called me "Frenchy" and my over-runs were more easily accepted. But working in a trading room is so intense and competitive that all differences are erased. I loved the sensation that we were all equal before the markets. At first they were a nightmare and I’d say to myself every evening, "I’m going to die here." But then, one day, you make a really good deal or two and the team congratulates you profusely.

How do you feel today in the Swiss financial industry?

I travel so much and am so absorbed with our Group’s other hubs that I don’t see it a lot. But Switzerland is a country with enormous strengths because of its stability, solid economic base, constancy and highly skilled working population. Moreover, the end of banking secrecy will revitalise the industry, despite the painful transition from an offshore to an onshore market. But we have everything it takes to manage. I feel like a special case here, because of my background. I’m close to Tidjane Thiam, the CEO of Credit Suisse. He’s brilliant, politically incorrect and in a league of his own. He often tells me I’m the blond and he’s the black of Swiss finance. That makes us laugh. Those who underestimate him ought to beware, because he’s a man who will achieve his ends.

What changes can figures such as you bring to the industry?

In our bank people are ready for change and willing to write a new story. We mustn’t have cold feet. The Swiss financial industry is small and that also makes it more responsive. We are working to bolster diversity within our Group. In three years we have instilled parity between men and women throughout the organisation, including on the executive committee. We have different nationalities at all levels of decision-making, people with highly international backgrounds and experience in all walks of life. For example, our head of human resources is of Belgian and Italian descent and, before joining us, had a remarkable career spanning not only several countries but also positions in the manufacturing and luxury sectors. This is enabling us to leave behind the traditionally ingrown culture of finance and move towards an approach based on team-building and individual development. The paradox is that Switzerland has such an international blend of people and that you don’t often see this in our sector.

Politically Switzerland seems to be tuning inward…
That is regrettable. Switzerland has always welcomed foreigners and it should cultivate the tradition. For companies it is crucial to stay competitive and thus to be able to attract the best talent available.

Some say Geneva is in decline. Do you see it that way?
Decline isn’t limited to Geneva or Switzerland: our system is reaching its limits. Politicians should manage public affairs as if they were running a company, i.e. dynamically, but we’re still at a stage where they call on us at the last minute to provide money to a given institution. That’s neither efficient nor sustainable. Governments need to set up public-private partnerships (PPPs) that align interests and pool skills. The private sector has a lot to bring to bear here because, unlike public agencies, it can’t run up deficits. Such partnerships are criticised but they have much to contribute. Geneva has everything. It deserves to be governed with a dynamic vision. In Europe we create numerous PPPs in the infrastructures segment. It’s a model that works well and needs to be expanded further.

Philanthropy and business are moving ever closer together. We can see that both are progressing whereas politicians hang back. Our family’s Foundations have social bonds, for example, that we are "importing" into the bank. For me this is an innovative way to nurture the future economy.

What is the next mould you plan to break?

People who talk about making a social impact should just do it. The road to tomorrow lies in managing from an all-encompassing perspective. We are working with the University of Geneva to fund a philanthropy chair. We already fund one on social entrepreneurship at the ESSEC in Paris. We have to incorporate social impact into our business thinking.

Proust’s questionnaire

- What is the wallpaper on your mobile phone?

- My daughters’ dog wearing sunglasses

- Who is your personal hero?

- Mohamed Yunus because of his monumental impact

- Someone knocks at your door at midnight. Who could it be?

- A friend in need

- What was your last moment of sheer happiness?

- Waking up, like every morning

- Last night with someone who didn’t realise the urgency of the matter

- Who is your favourite artist?

- The Chinese painter Chu Teh-Chun

- What is it like when you feel depressed?

- I’m very Nordic, a tortured soul. I go through moments of deep, dark introspection that can last for days.

- How would describe our times?

- Violent, terrible, fascinating and demanding, because each of us has to give all we have to build a better world.

- What is your favourite music?

- Blaring rap, every morning, old school and East Coast. It’s a carry-over from my days in New York.

My four key dates are the days my daughters were born.