The dust is still settling from Tuesday’s management earthquake at First Niagara Bank, in which its chief executive officer, John Koelmel, was ousted from his position in a rift with the bank’s board of directors. It was an unsettling development for several reasons, the two most prominent of which are First Niagara’s important role in the economy of Western New York and Koelmel’s significant influence as a passionately engaged civic leader.
Business is business, of course, and early reports indicate dissatisfaction by investors and the board with the bank’s performance. First Niagara’s stock price has suffered with its aggressive expansion program, particularly its acquisition last year of 1 million accounts from HSBC Bank.
It’s the kind of problem that can cause friction, and Koelmel wouldn’t be the first CEO forced out for that kind of reason. But those events are usually handled with greater aplomb than the sudden and unexpected expulsion of a chief executive. The soon-to-be-terminated executive is typically allowed to announce that he is moving on and the board thanks him for his service. That didn’t happen and the tactlessness of the dismissal raises questions of whether other factors are at work here.
Whatever those factors may be, it is important for First Niagara to find the leadership it needs to continue its role in the local economy. With Koelmel at the helm, First Niagara became a homegrown powerhouse, with 6,000 employees, and a fixture in Buffalo, where it moved its headquarters in 2009.
If Koelmel’s leadership was not what First Niagara needed going forward, Western New York has certainly reaped the benefits of his rising stature in the region’s civic life. Most prominently, he serves as chairman of the New York Power Authority, which is a player statewide but of special importance to Western New York.
He is also chairman of the Kaleida Health board, a position he has held for nearly three years. That, too, is a critical post, given the rapid development of the Buffalo Niagara Medical Campus, which includes several high-profile outposts of Kaleida, and the corporation’s prominent role in Great Lakes Health System, a combination of Kaleida, Erie County Medical Center, the University at Buffalo and the Center for Hospice & Palliative Care.
Koelmel also serves on the Western New York Regional Economic Development Council, where he is well-placed. In 2010, he worked to revive the Empire State Games, authorizing a $500,000 donation from the bank in hopes of drawing other donors.
Successful communities need people like Koelmel advocating for them. They are part of the necessary leadership package, and while Buffalo is blessed with many such private-sector leaders, including Robert Wilmers of M&T Bank, developer Howard Zemsky and Robert Gioia, president of the John R. Oishei Foundation, those men have been community leaders for many years. Koelmel is a relative newcomer to their ranks, and he is a powerhouse. We hope he stays here.
Western New Yorkers need to hope that First Niagara Bank finds the leadership it needs to remain a source of pride here and that Koelmel isn’t tempted away to another region. This one is happy to have him.