Bank of America adds four more directors
Bank of America has appointed four new independent directors to its boards, in anticipation most likely that some current directors will step down before the 2013 proxy season.
The new directors are Sharon Allen, former Deloitte chairman; Jack Bovender, former HCA chairman and chief executive; Linda Hudson, president and CEO of the U.S. subsidiary of defense contractor BAE Systems; and David Yost, former CEO of pharmaceuticals company AmerisourceBergen. The board now has 16 members, though that will decline as people step off within a year.
"Bank of America shareholders will benefit from the global perspectives, diverse insights and depth of experience these leaders possess," said Bank of America Chairman Charles O. Holliday, Jr. in a statement.
"They have a range of expertise in leading large, complex organizations, some in highly regulated industries with global businesses, that will enhance the board of directors."
I will assume that they are suitably independent, though their relationship with CEO Brian Moynihan should be checked. The one thing that stands out, however, is that none of them have financial services industry experience. Some academics have suggested, in order to explain the weak link between board independence and performance, that independence is not enough.
One study has found a positive correlation between performance and independent directors with industry experience but no correlation between performance and independent directors with no industry experiences. While none of the new candidates have industry experience, several existing director do. Charles Rossotti, however, is nearing the 72 year mandatory retirement age. The other independent with industry experience, Robert Sculley, is only 62. Still, with the new additions, the percentage of directors with direct experience running a major financial company is even smaller. It will be interesting to see who steps off the board next year. -Jim