Now that Ed Liddy has decided to quit his thankless job as a lightening rod for everyone seeking someone to blame in the AIG government bailout debacle, the big question becomes who in their right mind would want to sit in the hot seat he is vacating?

In case you haven't heard, Mr. Liddy announced that he would be stepping down as both chair and CEO of the beleaguered American International Group as soon as his board can find replacements.

Yes, I used the plural--replacements--because Mr. Liddy suggested (and the board wisely agreed) to split his two posts. That's perhaps the most important news here.

Ever since industry titan Maurice Greenberg resigned both key positions in the wake of an accounting scandal involving bogus financial reinsurance deals to artificially bolster AIG's balance sheet, I've argued that AIG--and every U.S. company--should have a board chair separate from the CEO who runs day-to-day operations to assure proper internal oversight and accountability. It's about time AIG got the message.

That said, in spite of my recent criticism of Mr. Liddy's bloated expense account, I have to hand it to the guy for coming out of retirement to take over AIG during such an overwhelming crisis. It was like being named captain of the Titanic right after it hit the iceberg--that being the company's reckless credit default swaps that threatened to sink the country's biggest insurer until Washington stepped in with a $180 billion life preserver.

Of course, even though Uncle Sam maneuvered to put the former Allstate executive in charge of the critically damaged AIG, that didn't stop government officials--particularly in Congress--from beating him like he was a pinata.

The media did its fair share of bashing as well--first about the luxurious retreats where AIG officials wined and dined top producers, then targeting the massive bonuses paid to many of those in the Financial Products unit that nearly destroyed the company, and most recently about the more than generous expense package for Mr. Liddy.

Still, Mr. Liddy did his job. He stabilized the company, provided credibility and leadership at the top, and began the long, arduous process of liquidating assets so that taxpayers might actually be repaid someday. And while not exactly riding the bus to work, he did work for an annual salary of $1.

The next chairman and CEO will likely get paid a more reasonable sum, but they will have to work their butts off to earn every penny. Indeed, whoever does become chair and CEO will face incredible challenges--not the least of which will be trying to run the company with Uncle Sam looking over their shoulders, and with new restrictions over executive compensation. Plus there are always press people like yours truly ready to pounce at the first sign of trouble.

Treasury Secretary Timothy Geithner made it clear this week that the federal government will be intimately involved with AIG for the foreseeable future, for better or worse. That is an enormous complication for AIG's new leaders to cope with. It's hard enough running a public company, with all the demands made by shareholders, regulators, analysts and the press. Having Congress, the Treasury and the White House poking their noses in your business as well is certainly not a positive recruiting point.

Still, this is AIG we are talking about. Any top insurance executive worth their salt would relish the opportunity to be the leader who restored AIG to its former glory.

Besides, a lot of the heavy lifting has already been done by Mr. Liddy. Insurance subsidiaries are rebranding and preparing for a spinoff and public offering to raise capital. And as the economy improves and the capital markets loosen, the organization's growth prospects should brighten considerably.

So, who will take over for Mr. Liddy? Your guess is as good as mine.

The company needs leaders with guts, gumption, vision, salesmanship and a very thick skin.

Got any suggestions?

Special Reports /

Who Will Take Over The Hot Seat At AIG?

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