Does Jamie Dimon know it all?

Jamie Dimon, CEO of JPMorgan Chase, testifies before the House Financial Services Committee on Capitol Hill in Washington on June 19, 2012.
AP Photo/Jacquelyn Martin

(MoneyWatch) As shareholder groups like CtW Investment and Glass, Lewis & Co. battle to separate the CEO and chairman's job at JP Morgan (JPM), Jamie Dimon continues to fight them off. Even though Citigroup (C) and Bank of America (BAC) have split what everyone knows are two impossible jobs, Dimon apparently doesn't think he needs help. That alone should be a warning sign.

If we have learned anything from the financial crisis (and the jury's out on that), it is that, in financial institutions, the risk is in the people. Where else could it be? People are engines that drive decisions and implement and monitor investments. Without the people, there is no business, so of course the risk lies there.

And just like any other productive machinery, those people have limits: physical, cognitive, imaginative, intellectual limits. Few companies are run as though this were true and very few bankers like to acknowledge it. Deals continue to get done during all-nighters even though sleep deprivation quickly and clearly undermines intellectual capacity. Managements continue to drive and reward multitasking, even though it's inefficient and exhausting. And strategists still believe in complexity and outsourcing even though both are implicated in all industrial accidents (of which the banking crisis is merely the biggest).

No matter how sophisticated the algorithms and spreadsheets, all business is human. Which means it is susceptible to error, even by Mr. Dimon. At any other level in an organization, insisting that you didn't need oversight or support would be regarded as poor leadership and arrogance.

Dimon is justly praised and respected for the intelligence with which JPM went into and got out of the CDO market. Having invented many of these products, the Morgan bankers understood how they worked far better than those who copied them. And that insight made their bank a great deal safer -- and saner -- than its competitors. But no one, not even the charismatic Jamie Dimon, is perfect. And no one should ever believe they know it all; insisting that they do merely proves that they do not.

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    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on