JPMorgan Names Two to Board, Creates Lead Director Role
JPMorgan Chase & Co. (JPM), the bank that incurred a $6.2 billion trading loss last year, will elect Linda B. Bammann and Michael A. Neal to its board and named Lee R. Raymond as lead independent director, giving him more powers.
Raymond, formerly presiding director, will have authority to call meetings at any time, approve agendas and add agenda items, and will guide the board in considering the succession of chief executive officers, New York-based JPMorgan said today in a statement.
Investors in May rejected a proposal to split the chairman and CEO roles, which advisory firms such as Institutional Shareholder Services said would improve oversight. The bank said today that the board will hold executive sessions without company management at every regular board meeting, make members available to meet with major shareholders and won’t rotate the lead independent director position every year.
Bammann and Neal are “proven leaders and will bring outstanding, risk, finance and management experience to our board,” Chief Executive Officer Jamie Dimon said in the statement.
Goldman Sachs, the fifth-biggest U.S. bank by assets, last year staved off a shareholder proposal to split the roles of Chairman and CEO Lloyd C. Blankfein by agreeing to appoint an independent lead director. James J. Schiro, the former CEO of Zurich Financial Services AG and PricewaterhouseCoopers LLP who joined Goldman Sachs’s board in 2009, was named to the role in April 2012.
JPMorgan, the biggest U.S. bank by assets, expects to elect Bammann to the board on Sept. 16 and Neal will join in January after he retires from his current position, according to the statement.
Bammann, 57, was chief risk management officer under Dimon at Bank One Corp., where he was chairman and CEO, from 2001 until it was acquired by JPMorgan in 2004, and then she served as deputy head of risk management until leaving the company in 2005, according to the statement.
She became a director of Freddie Mac after it entered government conservatorship in late 2008 until July of this year. She was chairwoman of the board’s business and risk committee, according to JPMorgan.
Neal, 60, is vice chairman of General Electric Co., which he joined in 1979, and intends to retire at the end of the year. He was chairman and CEO of the GE Capital subsidiary from 2007 until June.
Ellen V. Futter and David M. Cote, both members of JPMorgan’s risk committee, stepped down from the board in July after they narrowly won re-election in May. They overcame opposition from some shareholders after the $6.2 billion trading loss last year exposed risk-management failures. The retirements left the bank with nine board members, including Dimon.
Bammann will join the risk committee, which came under scrutiny after a JPMorgan trader, dubbed the London Whale because of the size of his positions, made the wayward bet on credit derivatives. Cote, 61, CEO of Honeywell International Inc. (HON), and Futter, 63, president of the American Museum of Natural History, had never worked at a bank or as financial risk managers, Bloomberg News reported in May 2012.
Fellow risk committee member James S. Crown, 60, president of Henry Crown & Co., hadn’t been employed in the industry for more than 25 years. Former KPMG International Chairman Timothy Flynn was added to the board and risk committee last year.
JPMorgan is contending with criminal investigations of its energy-trading and mortgage-backed securities operations. The firm also faces U.S. probes of its anti-money-laundering safeguards, foreclosures, credit-card collections and the London Whale debacle.
The bank has made bolstering regulatory compliance and internal controls its priority this year, Dimon, 57, has said.
“We’ve taken some of our best people and we’ve given them command-and-control authority, we’ve staffed them up, and we’re going to fix every single last” problem, he told investors at a June conference.