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In an encouraging sign that corporate governance in America is only 99% myth, Bank of America (NYSE: BAC) CEO Ken Lewis was deposed from his role as chairman of the board. Walter E. Massey, the president emeritus of Morehouse College in Atlanta, will be his replacement.The vote was far closer than it ever should have been, most likely because of corporate cronyism and broker non-votes: 50.34% of shareholders voted to remove Lewis as chairman. A third wanted him kicked off the company's board of directors entirely.
It's amazing: Ken Lewis takes Bank of America from its status as one of the most powerful financial institutions in the world and brings it to its knees, avoiding bankruptcy with loans from the United States government. The share price tanks and lawsuits fly. Attorneys general are investigating the possibility the he misled investors about the Merrill Lynch acquisition.
And 50.34% of shareholders vote to remove him as chairman of the board -- a concentration of power that most corporate governance experts agree is bad, even at companies with competent executives. I wonder how many would have voted to remove him if he were charged with killing people on Craigslist. 50.39%?
The next question will be how long Lewis stays as CEO. The shareholders have sent a clear message that they don't like him -- and the markets have sent a clear message that he stinks. His credibility is completely shot and even if he is still a talented managers, he's so tainted that he's probably ineffective at this point.
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Reader Comments (Page 1 of 1)
4-30-2009 @ 8:07AM
Bruce said...
I really don't understand your completely negative attitude considering all that has been published about the government ramming things down bankers throats, both in the current and the past administrations. I wonder what percentage of the shareholders actually voted? Was it 2 or 3%? It's like saying that Mayor Daley in Chicago is a popular mayor because he got 80% of the vote in the last election. But what about the fact that only 25% of the eligible voters actually voted? Rather that calling him popular which he clearly is not, it would be much more appropriate to call him effective at his job, even if his administration including many immediate members of his family are constantly involved in corruption and ineptitude. Like Mayor Daley, maybe it is all just relative and Ken Lewis is the best there is available for the job. Maybe you as a writer live in some kind of fantasy world and would screw things up so bad if you ever even had chance at having some real responsibility. From the way you write I have the impression if you ever even had a paper route you would have delivered the papers late and to the wrong addresses. Let's get real in your commentary.
4-30-2009 @ 11:16AM
clikdawg said...
Aw, Zac's just sore 'cause he didn't beat the spread on the ouster margin -- and after Somebody (Geithner's my guess) leaked stress-test data to make BoA look bad before the vote and thus provide a little insurance for ol' Ken's demise.
That little play mighta boomeranged, huh -- causing a backlash that made the margin smaller than it might else-wise have been, as (Geithner or not) it was pretty obvious BoA was being gamed.
People don't like bein' messed 'round like that, and are apt to respond in knee-jerk fashion.
Better luck on the next bet, Zac!