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Winter 2005 CalBusiness  
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Cover Story

A Banking Legend
The Haas School Honors former Bank of America and World Bank Chief A.W. 'Tom' Clausen with its Lifetime Achievement Award

By Thomas York

As a child in the 1930s, A.W. "Tom" Clausen sat with his Norwegian-born father and grandfather in front of the family radio each night after dinner to hear news about the rise of Hitler in Europe and the war in China. He listened well into the evening while the two older men discussed the grim events that plagued the planet.

This was Clausen's first taste of internationalism -- the idea that the world's nations become increasingly interdependent with each passing day. "Hearing about Europe, about the invasion of China by Japan, and about the world experiences of my father and grandfather hooked me on the international side of things at a young age," said Clausen. He has stayed true to this international perspective over the course of a four-decade career highlighted by stints as chairman and CEO of Bank of America, and a term as president of The World Bank.

In October 2004, the Haas School of Business named the 81-year-old Clausen its Lifetime Achievement Award winner in recognition of his private- and public-sector leadership in domestic economic affairs and the global economy. "Tom Clausen is a singular figure in the history of the banking industry, having long played a role on the world stage of international business and economic development," said Dean Tom Campbell. "He has a world view in all he does, but has never lost sight of the individual, especially those in need."

The lifetime achievement recognition is well deserved, according to long-time BofA Executive Barbara J. Desoer, MBA 77, and Haas School Advisory Board member. "Clausen's global perspective is even more critical today than in the past, given the growing importance of emerging economies around the world," said Desoer, who was Clausen's executive assistant in the late 80s. "And, he's always willing to share his experience and knowledge to help others resolve an issue or challenge."

After graduating from Carthage College in 1944, Clausen earned a law degree from the University of Minnesota. While waiting for the results of his bar exam, he took a part-time job as a bank vault clerk at Bank of America's Los Angeles main branch. "This was well before the cashless society," Clausen mused of his first job. "Trucks would back up to the cash vault and dump currency all over the floor. Then us gofers would sort it all out."

Clausen soon joined the bank full-time, and began his rise through the ranks. He became chairman and CEO at age 46 in 1970. Under his leadership, Bank of America emerged as the largest commercial bank in the country, with assets that grew from $25 to $120 billion, and financial interests in Europe, Asia, the Middle East, and South America.

In 1981, Clausen retired from Bank of America and headed off to run The World Bank as CEO. Once there, he discovered that getting things done in the scrutinized glare of the public sector was far more difficult than in the private sector. He recalled criticism he received for ordering the purchase of 50 trucks to haul food supplies during a devastating famine in Ethiopia. The world's nations had responded generously to appeals for food supplies, he said, but Ethiopia didn't have the means to move the food from ports to its parched interior where millions were starving. Critics thought the bank should be focused on improving infrastructure not purchasing mundane items like trucks. "They needed our help, and this was the best way to help," said Clausen. "It didn't make sense to leave food rotting on the docks."

When his term at the World Bank was winding down, BankAmerica's board came calling. The directors asked Clausen to return to the bank, which had plunged into financial crisis. More than $16 billion in overseas loans had gone sour, and rival First Interstate Bank was threatening a hostile takeover.

Clausen took on the challenge, recruiting new managers and, over a period of four years, reducing spending as well as restructuring the bank's troubled loan portfolio. In the process, he transformed a sea of red ink into black. In his last full year as CEO, the bank reported $1.1 billion in net earnings.

"Clausen has been a rock of stability and a beacon of inspiration for the international financial community," says Andy Rose, professor and director of the Clausen Center for International Business and Policy. "His leadership at both the Bank of America and the World Bank makes him one of those rare leaders who has demonstrated truly outstanding abilities in both the private and public sectors."

Though now retired for more than 14 years, the energetic octogenarian keeps regular hours at his old haunt, San Francisco's Bank of America building on California Street. He keeps his global perspective honed through work with with the Bretton Woods Committee, the Korea-US Wisemen's Council, and the Japan Foundation's Center for Global Partnership. He also participates in such influential economic and social organizations as the World Affairs Council of Northern California and the Asia Foundation.

Clausen has been a staunch Haas supporter since the late 1980's, when he and his late wife Peggy generously funded the Clausen Center for International Business and Policy. In addition to his important contributions to Haas, Clausen has funded the A.W. Clausen Center for World Business at his alma mater, Carthage College, and has also endowed two distinguished professorships at the University of California, San Francisco.

Sebastian Teunissen, executive director of the Clausen Center at the Haas School, said Clausen closely follows the center's activities and is eager to add his input. "He attends many of our conferences and lends his support wherever he can," said Teunissen. "He suggests speakers and puts us in touch with people that he knows — and he knows a lot of important people in business and politics."

Clausen believes that a global perspective is far more important today than yesterday! "You can't resist internationalism," he said. "You'd better get with it. You'd better know it. Because you're going to have to live with it — even more so tomorrow than today."

A Banking Legend: A.W.

"You can't resist internationalism. You'd better get with it. You'd better know it. Because you're going to have to live with it—even more so tomorrow than today."

— Tom Clausen

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