Eli Lilly adds new board member Kimberly Johnson, the COO who helped lead Fannie Mae out of the US housing crisis
It’s been an ugly couple of weeks for Eli Lilly’s C-suite after former CFO Josh Smiley was shown the door for sending “inappropriate messages.” In the fallout from that scandal, Lilly could be excused for looking to mitigate some of its risk — and Fannie Mae COO Kimberly Johnson joining the board could help on that front.
Johnson joined Fannie in 2006, months before the wheels came off the US housing market. The mortgage financier was roughed up in the fallout from that crisis and implicated as one of the institutional players that loaded up on bad-money subprime loans with the government’s backing. In fact, the firm’s derivatives portfolio hedging those balky mortgages may have added even more fuel to the fire.
Starting as a vice president of capital markets, Johnson’s fortunes rose in the aftermath of the crisis until she eventually took on the position chief risk officer in 2015 and then chief operating officer — the role she currently holds — in 2018.
Working at the center of the housing market’s collapse and helping the rebuild gave Johnson a unique viewpoint on risk mitigation that Lilly is likely hoping to co-opt.
“We now see ourselves as the centerpiece of the entire ecosystem around housing, which gives us a different sense of responsibility,” Johnson said in an interview with Forbes in 2018. “Following the crisis, we are no longer trying to win exclusively for us, but we are trying to win for everyone. Generating more accessibility to homeownership, creating better living communities, and ensuring that the entire ecosystem is functioning better are superior games to win than just being successful and pumping out more mortgage-backed securities.”
Prior to her 15-year stint at Fannie, Johnson worked for nearly six years as a director of fixed income sales at Credit Suisse and before as an equity trader at D.E. Shaw.
“Kimberly brings a strong background in technology, governance and global risk management strategy, as well as significant financial experience,” CEO David Ricks said in a statement.
Johnson’s appointment also makes good on Lilly’s diversity pledge in the aftermath of 2020’s calls for racial equity across Fortune 500 companies. Johnson, a Black woman, is one of the few females in chief operating officer positions at the nation’s largest firms.
In that same interview with Forbes, Johnson reflected on her rare position of leadership and what it said about women’s ability to lead a major company.
“With the roles that are seen as non-traditionally female-oriented, it does not have to be male or female characteristics that define how we do our jobs,” she said. “I learned this at multiple places, including the derivative space, hedge funds, investment banks, and even in risk. Ultimately, it all comes back to people as everything we do is done through people. If companies can figure out how to connect the people to the work, all sorts of avenues will open up.”