Shareholders at Bank of America were able to carry a vote to separate the roles of CEO and Chairman of the Board of Directors. This is a very encouraging sign. Although separating the roles is not sufficient to guarantee superior performance or governance, it allows the board and management to concentrate on their distinct roles, avoids conflicts of interest, and permits the exercise of comparative advantage between executives and directors.
The less encouraging news is that the Board Chair is a college president. Academic institutions are not known for transparency, effective cost management, providing value for their student customers, or for maximizing returns. However, it is possible that the new Chair is someone who can bring a fractious board together into an effective governing unit.
If CEO Lewis is in fact a good operating executive, he is now free to concentrate on what needs to be done on the business side, and he can leave all the other issues to the Board Chair. He should be thankful and he should be relieved. If he and his supporters take the move in the wrong way and look on it as a "vote of confidence," then he will lose his focus and probably needs to be monitored closely by the board.
Some measures for shareholder non-binding "say on pay" resolutions were defeated, but there are a few green shoots in this proxy season.
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