GRC News Roundup: Proxy Advisor Calls on Bank of America to Split CEO, Chairman Roles

by CCI @ 2009-04-17 Compliance News, Financial Compliance, General Interest, Governance

It is Friday, and we have not done either of our weekly news or blog roundups yet, which means it is time for both. Also, make sure that if you have not read the two new feature articles posted this week that you give them a glance:

The Conflicts of Interests in Financial Services by James Bone
Risk Intelligence: Best Practices in Risk Management and Corporate Governance by Mike Fuchs

Additionally, you may have noticed the new header at the top every post page announcing some special offers from the Wall Street Journal, MarketWatch, and Barron’s. CCI has established a partnership with all three to provide some really great subscription deals for our readers. Make sure you take a look if you are not subscribed to them already. We obviously appreciate your willingness and excitement to trust CCI for a portion of your GRC news and information, but there is nothing quite like having those comprehensive resources at your disposal any time you want them. Here are the links again for your convenience:

And now, some titles, excerpts, and links for some pertinent GRC news stories from the past few days:

Bank Of America Holders Should Split Chairman, CEO Roles

Proxy Governance said it thinks the board of Bank of America Corp. (BAC) is doing its job, but the proxy advisor said shareholders would be better served by voting to split the chairman and chief executive roles.

The firm has also spoken out in recent days against several Citigroup Inc. (C) directors, saying some of the incumbent directors “failed in their responsibilities” and further changes are needed to restore the faith of shareholders and regulators.

Proxy Governance highlighted Chairman and CEO Ken Lewis’ role in the merger between Bank of America and Merrill Lynch, saying it wasn’t sure why Bank of America, which “clearly held the upper hand in these negotiations,” felt it had to agree to a deal in the span of one weekend, “particularly amid such uncertainty in the financial markets.”

It also recommends shareholders withhold votes on lead independent director O. Temple Sloan Jr. and Thomas Ryan, chairman of the corporate-governance committee.

It called the fact that Lewis was concerned enough to consider calling off the deal worrying, but said adding a $118 billion government backstop for losses nullifies much of the uncertainty about the risks.

Proxy Governance said if Lewis served in the chairman’s role only, it would recommend that shareholders withhold their votes against him at the company’s upcoming annual meeting on April 29 – but said as CEO his role is to act decisively on opportunities.

>>>read entire article on the recommendation that Bank of American split the CEO and Chairman roles by Kerry E. Grace at Dow Jones Newswires

BofA investors urged to oppose 2 board members — (Reuters UK)

Pressure mounts to break CEO and chairman roles at Bank of America — (Daily Finance by AOL Money & Finance)

Don’t vote for 2 BofA directors, firm advices — (Charlotte Observer)

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The Conference Board Says Corporate Directors Should Prepare to Avoid Shareholder Activism, as the Financial Crisis Intensifies Proxy Demands

The Conference Board Governance Center issued today a report providing board members with a checklist of issues they should consider addressing in their relations with shareholders and, in particular, how to avoid a costly and disruptive battle with an activist investor.

It is the fourth in The Conference Board series of reports on the oversight role of the board of directors in the current economic crisis.

“With corporate valuation declining and an economic and political environment favorable to change, this proxy season is witnessing a new wave of investor demands,” says Matteo Tonello, Associate Director, Corporate Governance at The Conference Board in New York and co-author of the report with Damien J. Park. “In particular, due to the liquidity problems facing many corporations, there is a clear shift from the financial-oriented activism campaign aiming at cash extractions to new initiatives pursuing strategic, operational, and governance-related corrections.”

>>>read entire press release from The Conference Board

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Wall Street Still Find Ways to Hire Foreigners

Some big U.S. banks that have received billions of dollars from the government are shipping some of their newest recruits overseas in order to comply with a federal law that restricts their ability to hire foreign workers for U.S. jobs.

Although some financial firms have rescinded job offers to such prospective employees, J.P. Morgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley are offering international jobs to foreign students whom they have recruited from U.S. colleges and graduate schools. The new hires are being sent to global financial centers like London and Hong Kong.

The overall numbers affected by the restrictions are small, but the moves represent the banking industry’s latest effort to deal with what they consider to be untenable consequences of the Troubled Asset Relief Program.

>>>read entire article by Robin Sidel at the Wall Street Journal

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The McGraw-Hill Companies to Enhance Corporate Governance Provisions

Harold McGraw III, Chairman of the Board, President and Chief Executive Officer of The McGraw-Hill Companies, Inc., (NYSE: MHP) announced today that following discussions with shareholders of the matters to be acted upon at the Annual Meeting of Shareholders to be held on April 29, 2009, he recommended to The McGraw-Hill Companies’ Board of Directors that the Corporation eliminate its classified Board of Directors and the requirements in the Corporation’s Certificate of Incorporation for supermajority votes to approve certain corporate actions.

>>>read entire press release by McGraw-Hill

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Tags: bank of america, corporate governance