Bank of America Corp (NYSE:BAC)’s vote expected to take place on the Sept. 22 has been embraced by a majority of investors with a high expectation of changes in various items. The central issue that several large shareholders are persuasive to have changes on is the Company’s Management whereby Brian Moynihan has combined roles of Chairman and Chief Executive. The prevalent question is whether Mr. Moynihan should remain in service for the two roles.
The combination of roles for Mr. Moynihan has been running notwithstanding a 2009 shareholder vote to distinct the positions. However, most of the investors seem to be settling on the same opinion. While some of them feel that the longest-tenured directors should exit from the board, others want to see new blood on the board’s governance committee.
For the longest time possible, the chairperson issue has been under the firm defense of Bank of America Corp (NYSE:BAC)’s board. Nonetheless, according to the bank’s general counsel, Gary Lynch, through the coming vote, shareholders will be able to speak out their mind and the board will have to abide.
Jonathan Finger, a partner at Finger Interests Ltd, says that directors who have been on the board for over ten years should make room for new people. There are speculations that the bank could attempt to make a director’s change, either in response to a vote or before one. But bank representatives have not given any commitment to the speculations.
While some big investors are a likely vote in the bank’s favor, more activists’ investors are likely to vote against. Before Mr. Moynihan became CEO, regulators had issued an order to the bank to add financial experts to the board. However, some of them have since left.
In defense of the board, Tom Brown, who manages the hedge fund Second Curve Capital says that the board is very active. Additionally he contends that Mr. Moynihan has the required experience hence the roles need not to be separated.
Meanwhile, Mr. Moynihan argues that the board members have a strong set of skills with banking experts in different areas. He further states that the bank has since evolved from the financial crisis experienced earlier on.