During Bank of America’s third-quarter earnings call Wednesday, CEO Brian Moynihan found himself fielding questions from analysts on the bank’s decision earlier this month to make him chairman of the company.
On Oct. 1, the bank’s board amended the lender’s bylaws to remove a requirement for an independent chairman. The requirement had been in place since shareholders voted in 2009 to split the CEO and chairman roles during Ken Lewis’ tenure.
Moynihan, who was asked by two analysts about the decision Wednesday, said the bank’s board is committed to having good corporate governance.
“I think we have a strong board as a team, with various people with various skills and background, and that diversity really helps us,” he said.
The bank’s decision to name Moynihan chairman surprised some analysts and investors, who say separating the roles of CEO and chairman provides better oversight of a company’s chief executive.
The trend among large banks is to have CEOs who also hold the chairman title. Citigroup is the only large U.S. bank to have separate CEO and chairman posts.
Across corporate America as a whole, splitting the roles has become more common. According to executive search and consulting firm Spencer Stuart, 45 percent of S&P 500 companies had separate chairmen and CEOs last year. That’s up from 23 percent a decade earlier.
“There’s several corporate governance experts who say it’s better to have those two roles split and others say it doesn’t matter,” analyst Mike Mayo told Moynihan on Wednesday. “Do you know what the regulator view is on that? Because you’re going from what some consider a preferred corporate governance approach, splitting the CEO and chair role, to now combining them.”
Moynihan said regulators want boards of public companies to have experience, diverse membership and to be engaged.
“And we have a good board ...,” Moynihan said.
In addition to naming Moynihan chairman, the board elected Jack Bovender Jr., a Bank of America director since August 2012, the board’s lead independent director.
The bank previously had a lead director when Lewis held the CEO and chairman positions.