Sunday, June 07, 2009

Bank of America Hires 4 Guys Who Know What They are Doing

Bank of America (BAC) announced that four new guys were going on the board who knew what they were doing. That does sound good. Unfortunately it also sounds very new. The new board members are Donald E. Powell, a former chairman of the Federal Deposit Insurance Corporation; Susan Bies, a former member of the board of governors in the Federal Reserve System; D. Paul Jones Jr., a former CEO of Compass Bancshares, and William Boardman, a former executive at Bank One, which is now a part of JPMorgan Chase.(JPM)

What no one seems to be discussing is just what are the qualifications for becoming a board member in general and of a financial institution in particular. Everyone wants the grey hair wisdom. Few companies got it. Next question is what are the qualifications to keep your seat on the board. Everyone looks to the CEO but barely knows the board. Those guys are the ones truly in charge. There is too much back room closed door dynamics that shareholders cannot assess.