Appointment of Kenneth Chenault as CEO
In January 2001 Chenault claimed the top position at American Express (one of the best known symbols of U. S. capitalism, then with yearly sales of $25 billion). Though, by then, the prospects for African Americans in corporate America had seemed dismal. At General Electric, for example, just one of the top twenty business units was led by an African American. Only two other African Americans headed Fortune five hundred companies: Franklin Raines was the CEO of Fannie Mae, and A. Barry Rand was the CEO of Avis. John O. For his part Chenault did not dwell on racial issues.
He understood the social significance of his appointment but wanted people to judge him based solely on his performance. Early in his tenure as CEO Chenault sent the message to Wall Street that he had not been completely prepared for the job. After announcing record earnings for 2000, several months later he shocked investors with news of a $182 million write-off on some surprisingly risky assets in the company’s money-management division, American Express Financial Advisors. Chenault consequently reduced the company’s junk portfolio from 12 percent to about 8 percent and decreased the risks of other investments, a first major achievement.
A Brief Biography of Kenneth Chenault. Chenault was born in 1952 in Hempstead, New York, an affluent suburb of New York City. His father, Hortenius Chenault, was a dentist and his mother, Anne, a dental hygienist. From the time Kenneth was a child, his parents encouraged him to excel in intellectual as well as athletic pursuits. As a boy, Chenault eagerly read the biographies of great men, both black and white, and he grew up with similar expectations for himself. While attending a highly regarded private school in Garden City, New York, Chenault excelled academically and was elected president of his class in high school.
He then enrolled at Bowdoin College in Maine, one of the country’s finest liberal arts institutions, and from there went on to Harvard Law School, where he earned his degree in 1976. After graduating from Harvard, he had his choice of many employment opportunities and at first followed the expected path by joining the New York corporate law firm of Rogers ; Wells. It was not long, however, before he was tempted by the theory and practice of business, and in the late 1970s accepted a position at the Boston-based business consulting firm of Bain and Company.
There he was involved in the research and design of business strategies for some of the largest corporations in the country, thus acquiring an extensive knowledge of all aspects of the business world while also making important contacts with business executives. During his tenure at Bain and Company, Chenault apparently decided that he was more interested in business than in the abstract complexities of business law, and in 1981, when he was offered a job at American Express, he accepted the challenge and began a new career at the company’s headquarters in New York City.