Bank of America, which has been directed to bolster its capital position following the rigorous tests, has appointed four new directors to its board.
The financial services major's top management has come under fire for the entity's precarious position, which even led the shareholders stripping Kenneth D Lewis of his board chairmanship in April.
The appointment of the four new directors is effective from June 5, Bank of America said in a recent statement. Currently, the board strength stands is 20.
Former member of the Board of Governors of the Federal Reserve System Susan S Bies, and retired executive of Bank One Corporation and Visa International William P Boardman are among the new directors. Others are former Chairman and CEO of Compass Bancshares D Paul Jones and former Chairman of the Federal Deposit Insurance Corporation (FDIC) Donald E Powell.
After the stress test results were announced on May 7, the Federal government gave time till June 8 to the entities to submit their capital plans.
"As part of the 30-day planning process, firms will need to review their existing management and Board in order to assure that the leadership of the firm has sufficient expertise and ability to manage the risks ...," said a joint statement from the Treasury, Federal Reserve, FDIC and Comptroller of the Currency on May 6.
Meanwhile, the appointments come within weeks of Bank of America's two directors — Temple Sloan and Robert L Tillman — resigning from the board.
While Sloan resigned from the board with effect from May 26, Tillman resigned as a member of the board, effective May 29, 2009. "His decision to resign was not as a result of any disagreement with the Corporation or its management," the financial institution said in a regulatory filing to SEC.
Prior to the resignation of the two directors, the bank's board strength stood at 18.
"The new directors bring a wealth of experience in financial services from a variety of perspectives. Their participation will make our board even stronger as we move our company toward achieving its true potential," Bank of America Chairman Walter E Massey said.
Last month, the US government asked Bank of America to raise $34 billion in fresh capital in the event of the current economic turmoil turning worse in the coming months.
While Bies would serve on the Asset Quality Committee of the board, Boardman is expected to serve on the Corporate Governance Committee of the Board, BofA said in a regulatory filing to the SEC. Also, Jones would serve on the Asset Quality Committee of the board and Powell on the Audit Committee of the board.
