The multibillion-dollar question:  Who’s minding the shop at CIBC?

Leslie Rahl has an impressive resume’.  She’s founder and president of Capital Market Risk Advisors, a firm that, in its own words, has “played an integral role in the evolution of hedge funds, derivatives, structured securities and risk management for more than 15 years.

Ms. Rahl has given 35 years of her life to high finance, 19 of them at Citibank, including nine as co-head of Citibank’s Derivatives Group in North America where she pioneered the development of the swaps and derivatives business.  She graduated at MIT and its Sloane School of Management.

So she sounds like a perfect, if late, addition to Canadian Imperial Bank of Commerce’s board of directors.  Ms Rahl joined the board in May of this year, so don’t blame her for the bank’s most recent cock-up.  But what about the other members of the board, and in particular the risk committee Ms. Rahl sits on? What burden of responsibility should they shoulder for CIBC’s latest costly blunder?

CIBC says its board is meant “to supervise the management of the business and affairs of CIBC.  The quality and independence of the directors, as well as adhering to high ethical standards, are critical to fulfilling the board’s oversight obligations.”

Ms. Rahl did speak about risk in general.  Her advice to directors:  “Ask tough questions.”  One hopes her appointment is more than window-dressing, that it shows the bank is serious about the mandate it givers the board.  She has those credentials, after all.  But you need more than that, apparently, Ms. Rahl is also the chair of the risk committee over at Fannie Mare – a lender whose subprime writedowns might go as high as $14- billion (U.S.), according to Barron’s.

December 31, 2007