Bank of America’s board is in flux, with four new directors set to come aboard next year. On the surface at least, all four are independent, but that didn’t stop analyst Richard Bove from leveling some criticism.
“These are the type of people banks want on the board, and they tend to be sycophants, who go along with whatever [bank management] tells them,” Bove said to TheStreet.com.
More specifically, he believes “the directors in general lack expertise in technology and capital markets, which is where he believes the future of the institution lies.”
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.
It may be premature to pronounce them all spineless and it might be wise to give them some time to earn that reputation—or not. But I have noted that the new director nominees lack experience in the financial services industry. I would add that some academics have found a positive correlation between performance and independent directors with industry experience, but no correlation between performance and independent directors with no industry experiences.
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