Bank of America Corp. (BAC:US), the second- largest U.S. lender, named four new directors including former Deloitte LLP Chairman Sharon Allen to replace board members who will reach or exceed retirement age by next year.
BAE Systems Inc. Chief Executive Officer Linda Hudson, 62, Jack Bovender, 67, who led HCA Inc., and R. David Yost, 65, who was CEO of AmerisourceBergen Corp. (ABC:US), are also joining the board immediately, the Charlotte, North Carolina-based bank said today in a statement. The appointments of Allen and Hudson double the number of women on the panel.
Bank of America CEO Brian T. Moynihan is adding to his firm’s board as directors Donald Powell, Charles Rossotti and Virgis Colbert approach or exceed the retirement age of 72. D. Paul Jones, former CEO of Birmingham, Alabama-based Compass Bancshares Inc., retired in May. Jones and Powell were among four directors appointed in 2009 amid regulatory pressure to improve governance after U.S. bailouts of $45 billion.
“The people they’re adding are very much your typical directors -- large-firm CEOs,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware and a Bank of America shareholder. “That suggests the bank is falling into a more normalized operating environment, which isn’t a bad sign.”
In June 2009, then-CEO Kenneth D. Lewis revamped Bank of America’s board with a former Federal Reserve governor, an ex- chairman of the Federal Deposit Insurance Corporation and a pair of former bank CEOs. The risk committee of JPMorgan Chase & Co. (JPM:US)’s board came under fire this year for not having enough expertise in the industry after the bank, the largest in the U.S. by assets, lost at least $5.8 billion on bad trades.
The pick of new directors from non-financial firms may mean that Bank of America’s nominating committee “doesn’t think that the board’s highest priority is obtaining input or fresh perspectives on banking issues,” said Jonathan Macey, a law professor at Yale University in New Haven, Connecticut. “This corresponds to the public perception that the Bank of America culture is one that does not lack faith in their own abilities.”
Allen, 60, has served as chairman of audit firm Deloitte from 2003 to 2011, leading governance and succession planning, Bank of America said. She was the first woman in that role. The addition of Allen and Hudson means women will get a larger voice on the lender’s board, which swells to 16 members until the retiring directors leave next year.
Hudson, who was appointed in 2009 as president and CEO of BAE Systems, the U.S.-based subsidiary of BAE Systems Plc (BAE) in London, was the first female to run a major U.S. defense company, Bank of America said. She has held various defense and aerospace positions over her 40-year career.
Bovender served as chairman and CEO of Nashville, Tennessee-based HCA Inc. (HCA:US), the largest for-profit U.S. hospital operator, from 2002 to 2009, Bank of America said. The North Carolina native is vice chairman of Duke University’s trustees and leads its audit committee.
Yost served as CEO of AmerisourceBergen Corp., a drug distributor to health-care providers and pharmaceutical firms based in Chesterbrook, Pennsylvania, from 2001 to 2011, the lender said.
“The management team will benefit from the addition of these directors and their unique skills and leadership qualities,” Moynihan, 52, said in the statement.
Each new director will be granted restricted stock and cash awards on Sept. 1, the bank said in a regulatory filing.
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