(August 23) – “After taking charge of reeling Bank One Corp. in March, Jamie Dimon vowed to cut $500 million in pretax expenses by reviewing every spending decision and driving down employee numbers through attrition,” writes Amy Merrick in today’s Wall Street Journal.

“Tuesday, the company said that President Verne Istock, a board member who was Bank One’s acting chairman before Mr. Dimon’s appointment, has volunteered to retire along with five outside directors.”

“Though the company stressed that the retirements were voluntary, Mr. Dimon, the chairman and chief executive, had said that he regarded that board as ‘very large.’ At 19 members, it was larger than those at such bigger banks as Citigroup Inc., Chase Manhattan Corp. and Bank of America. After the retirements, the number of directors will stand at 13.”

“Mr. Dimon, the 44-year-old former president of Citigroup who is known as a turnaround specialist, said in an interview that the board has been under review for about a month and a half, and that most people thought it would be better to have a ‘smaller, more nimble’ panel. He dismissed talk about possible tensions, saying, ‘From the day I’ve been here, each and every one has been terrific and supportive. Whatever went on before, I never saw any of it myself.’ “

“Mr. Istock, 59 years old, said in the interview: ‘With Jamie in this position [settled into his CEO role], it was an appropriate time for me to retire.” He said of Mr. Dimon: “He has the organization in place; he has the objectives in place; now it’s time to see if he can execute.’ “

“The Bank One shakeup says as much about corporate America’s views on directors as about the bank itself. The sizes of boards of directors in all industries are increasingly being trimmed. ‘Academic studies confirm that in the U.S., boards that are larger — over 13 or 14 — underperform, net of everything else,’ said Michael Useem, director of the Center for Leadership and Change Management at the University of Pennsylvania’s Wharton business school. ‘My own forecast is that boards will begin to become smaller, not larger, over time.’ “

“The retirement of Mr. Istock resolves what some outsiders had viewed as a potential conflict within the management ranks. Mr. Istock, who had spent 37 years with Bank One and its predecessor companies, had been chief executive of First Chicago NBD Corp. when the then-named Banc One bought it in October 1998. He stayed at the company, becoming the No. 2 executive to Bank One Chief Executive John McCoy in October 1999, when earnings shortfalls and troubles at Bank One’s First USA credit-card division began to rock the company, leading ultimately to the resignation of Mr. McCoy in December. It was after a lengthy search that Mr. Dimon was hired to succeed Mr. McCoy.”

“Mr. Istock served as acting chief executive after Mr. McCoy’s resignation and made no secret of his desire for the job. Former First Chicago executives at Bank One felt some resentment about the value of the Bank One stock they received in the merger declining precipitously after the earnings troubles struck last year. Some observers believed that that resentment could prove to be an obstacle as Mr. Dimon attempted to push forward.”