The authors analyze the impact of governance structures on the performance of public banks by comparing an ambitious but ultimately failing Landesbank (WestLB) with a more prudent and so-far successful Landesbank (Helaba). By applying a multi-theoretical perspective, they find that the governance of these banks differed remarkably in terms of processes, which may explain the different fate of these Landesbanken to a large extent. While both banks suffered a major crisis in the 1970s, the owners of Helaba learned their lesson and set up a governance structure characterized by strict control and monitoring mechanisms. They also upheld the commitment to a public mandate. At WestLB, this commitment was dropped and the governance structure left management with a very high degree of autonomy.