While change is often feared, it is not always a bad thing. This is especially true for leadership within organizations. New leaders bring with them fresh ideas that allow organizations to remain profitable despite the ever-changing market conditions that they operate in. Realizing this fact, the 91-year old banking veteran, Lazaro Brandao last month (October 2018) decided to step aside from his post of chairman at Banco Bradesco. His replacement, Luiz Carlos Trabuco is 25 years younger and has for the last nine years been serving as the president of Banco Bradesco. As such, it is likely that he will bring a more innovative perspective to the role of chairman.
No one can discount the leadership talents of Luiz Carlos Trabuco. He joined Bradesco as an inexperienced teenager in 1969 and never once looked out of place in the numerous positions he was assigned to over the years. The last nine years where he served as the bank’s president have particularly shown his aptitude as a leader, given the fact that the economic climate in that time has been far from conducive. As such, his appointment to the position of president is not only merited but also uncontestable.
The Bradesco group is currently too big to be served by a singular president and chairman. As such, the bank will have to a appoint a new president to take over from Luiz Carlos Trabuco. The responsibility of appointing the next president rests with the board, which appoints by way of voting. However, the new appointment is not expected to be announced until March 2018. Consequently, Luiz Carlos Trabuco will have to continue dispensing the duties of both the president and board chairman for the next few months. While serving in both capacities will no doubt be difficult, especially considering the fact that the bank is in a transitional period, Mr. Trabuco’s performance as president over the last nine years shows that he is more than equal to the task.
The changes currently happening at Bradesco will also see the new president have a slightly different mandate to that previously held by Luiz Carlos Trabuco. Previously, the bank president had a seat on the bank’s board. In fact, it is for this reason that Luiz Carlos Trabuco was nominated the vice chairman of the board in 2014 despite already being the bank’s president. However, with the bank continuing to grow into a financial giant, the executive responsibilities involved in making sure that it runs smoothly on a daily basis are becoming more engaging for the president. Consequently, it has been decided that the president will no longer need to be a member of the bank’s board. Further, to ensure that the removal of the president’s seat does not make the already small board smaller, it has been decided that the board will be expanded to be made up of more than the current eight members.
Under the guidance of Luiz Carlos Trabuco, the incoming president will likely have to employ unconventional methods to ensure the continued profitability of the bank. For the last two years, the underperformance of the Brazilian economy has placed great pressure on the margins of most banks within the country, including Bradesco. In fact, just a few months ago, the bank started scaling back on its extensive branch network coverage of over 5,500 offices to ensure that it remains in the green. Consequently, unless the Brazilian economy starts showing signs of significant improvement before March 2018, the incoming president will have to come up with innovative ways of sustainably growing the Bradesco brand.