1.

Why do you think it was important for Sanford Weill to stay on as Chairman of the
Board after Charles Prince was picked as the new CEO?
Mr. Charles Prince was chosen by Mr. Sanford Weill to be his successor because he knows
his capabilities, and he believes Mr. Charles Prince will follow the same strategies he had put
in place. Therefore, it was important for Mr. Sanford Weill to stay on as the Chairman of the
Board to guide and aid Charles Prince in his new mission and make sure the strategies that he
has put in place are executed fully to achieve aggressive growth, a large number of
acquisitions and high year-to-year earnings growth.

2. Why did three top-level employees at Citigroup want to leave after two years with
Prince as CEO?
Prince made significant revisions to how Citigroup operated, as mentioned in the case. His
emphasis was on improving the organization's credibility, creating improved corporate
controls, and focusing on ethics. Since there was a conflict between policy and market
results, it is also likely that the reforms did not please Robert and Majorie, and the new
internal controls curbed their independence. Furthermore, Prince was going in the opposite
direction where the two employees. So, they would have decided to leave since they would
not have wanted to change themselves or how things have worked. There is also a possibility
that these two workers may have a history of some immoral aspects of operating.

3. Why do you think there were multiple ethical problems at Citigroup when Prince
took over as CEO?
The ethical problems happened when Prince took over the CEO position due to several
violations in professional ethics and ethical code of conduct when Weill was CEO. These
ethical problems began when Citigroup did not separate its financial analyst functions from
its role as an investment bank. Also, Citigroup had to address government probes in England
for its aggressive strategy related to bond trading. Due to Citigroup employees' unethical
activities, they lost their private banking license in Japan. Federal Trade Commission also
accused Citigroup due to misleading customers in its consumer lending unit. All those ethical
problems were conducted due to the absence of an ethical code of conduct. All these reasons
can reflect on Prince's decisions to make the strategic change and spend half of his time
focusing on culture and value issues.