The all-American cult of the imperial chief executive was bolstered today when Brian Moynihan won a vote to remain both chairman and CEO of Bank of America.
The bank’s shares fell 1.27 percent after the decision.
The best corporate governance separates the two roles. The CEO is the head of management, accountable to a board of directors overseen by an independent chairman, representing shareholders — in the best of circumstances, stakeholders, too.
An independent chairman and board hold the CEO and management accountable. They even — how quaint — prevent the good ole boys/girls club on the compensation committee from awarding outrageous pay to the top. That’s the way it’s supposed to work.
And indeed, BofA shareholders passed a resolution in 2009 requiring an independent chairman for this troubled TBTF institution, which paid $70 billion in fines to settle lawsuits for behavior arising out of the financial meltdown — and might have faced worse had the Obama administration applied the rule of law to the banking industry and Wall Street. Among these was a record fine for knowingly selling toxic subprime mortgages to investors.
But in the fall of 2014, the board quietly revoked the bylaw and named Moynihan both chairman and CEO.
The move, along with the bank’s missteps, caused a shareholder revolt — and not merely among the usual nuns and do-gooders. The New York City Employees’ Retirement System, the Illinois State Board of Investment, Ferguson Wellman Capital Management and the powerful Calpers, the California Public Employees’ Retirement System all wanted the jobs split.