Wells Fargo adds new directors in latest post-scandal remake of board

Wells Fargo announced Wednesday the addition of three new directors to its board, the latest leadership changes at the bank as it deals with a raft of scandals.

The new directors, who will join the board Jan. 1, are former Kellogg Co. executive Celeste Clark, Theodore Craver, former CEO of electric utility Edison International, and retired MetLife executive Maria Morris.

Wednesday’s move comes in the wake of departures announced this year of some long-time directors, including chairman Stephen Sanger, who served during the years when a massive sales scandal was unfolding at the bank. Since revelations of that scandal in September 2016 Wells has disclosed problems in other businesses such as auto insurance and home mortgages.

In a statement Wednesday, Betsy Duke, who in August was named Sanger’s replacement effective Jan. 1, said the composition of the board has been changed significantly to be responsive to shareholders, enhance oversight of management and create value for shareholders.

Duke said the latest changes come after the board’s annual self-evaluation conducted this year and also followed feedback from shareholders and others.

The San Francisco-based bank, whose largest employment hub is in Charlotte, has continued to shake up its board this year.

In August, Wells announced the retirement of Sanger, a director since 2003, and two other directors who had served since the 1990s. Sanger had received a low 56 percent of votes cast by investors when he was re-elected at the bank’s annual shareholders meeting in April. Some other directors also received tepid support, in a sign of dissatisfaction following the sales scandal.

Wells has pushed to repair its reputation since the scandal, in which regulators accused the bank’s employee of creating fake accounts to meet aggressive sales goals. But it keeps stumbling.

This year it disclosed charging customers premiums for auto insurance they did not need, a practice that in some cases may have also contributed to vehicle repossessions. Also this year Wells disclosed improperly charging customers to lock in mortgage interest rates.

The three new directors will be independent, a label that applies to directors who aren’t Wells employees or who meet other criteria, such as not having specific financial ties to the company.

CEO Tim Sloan is the only non-independent director.

Wells said Wednesday’s move fills the vacancies created by Sanger and the other two directors whose retirements were announced in August: Cynthia Milligan and Susan G. Swenson.

So far this year, Wells has named named six new directors, giving it a total of 16 directors come Jan. 1 once the previously announced retirements take effect.

Clark is a principal of Abraham Clark Consulting, a health and regulatory policy consulting firm, according to her Wells Fargo bio. She is also retired senior vice president of global public policy and external relations and chief sustainability officer for the food giant, Kellogg. She sits on the board of directors of The Hain Celestial Group and Omega Protein Corp.

Craver served as served as chairman, president and CEO of California-based Edison International from 2008 to 2016. He’s also a board director at Charlotte-based Duke Energy, where he chairs the audit committee. And he sits on the Federal Reserve Bank of San Francisco’s Economic Advisory Council.

Morris is retired head of the global employee benefits business of insurance giant MetLife. She is also a member of the board of directors of data firm S&P Global.

On Wells Fargo’s board, Clark will serve as a member of the corporate responsibility committee. Craver will sit on the audit and examination committee. Morris has been named to the risk committee.

This story was originally published November 29, 2017 at 11:47 AM with the headline "Wells Fargo adds new directors in latest post-scandal remake of board."