Ken Lewis isn’t just the embattled chief executive of Bank of America Corp., he’s the last of a breed: a BofA director with North Carolina ties. Not long ago, the board of the Charlotte-based bank had a healthy representation from its home state. When Lewis became CEO in 2001, seven of 17 directors lived or worked in North Carolina.
The Tar Heel influence waned as the bank’s assets waxed. A year ago, its proxy listed four North Carolinians on the 16-person board. Between April 1 and June 10, three resigned or retired, whittling the contingent down to Lewis, a Mississippi native whose Tar Heel roots run only as deep as his time with the bank — much of it spent working in other states. “Bank of America is now a global company,” spokesman Scott Silvestri says, “and as such, it’s got directors from a wide geographical area.”
Many have strong ties to the Northeast. After BofA bought FleetBoston Financial Corp. in 2004, seven of its directors were added to the board, giving it 19. Six remain on what is now an 18-director board, including former CEO Charles Gifford. The pre-Fleet BofA contingent has dwindled to two: Lewis and Walter Massey, former president of Morehouse College in Atlanta. Massey took over as chairman after a shareholder revolt stripped Lewis of the title at the annual meeting April 29. Massey joined the board when BofA, then NationsBank, bought San Francisco-based BankAmerica Corp. in 1998.
“The bulk of the political power resides with the people who were FleetBoston people,” says Tony Plath, associate professor of finance at UNC Charlotte. “They’ve got the numbers on the board, and they’ve got, I think, the loudest voice on the board in Gifford.” Houston money manager Jon Finger, who helped lead the shareholder uprising, says the changes, including four new directors, will make the board more independent. He would like Lewis to step down but admits he’s not pressing as hard these days. Plath says it wouldn’t take much for the hue and cry to resume. “If they come out with bad Q2 numbers or there’s an earnings surprise or if there are any more losses in their real-estate book, I think Ken is probably gone.”
Silvestri says BofA is committed to keeping its headquarters in Charlotte. Others aren’t so sure. If Lewis leaves, the board, with its Northeastern nucleus, might not wait long to move top management to New York, where BofA has offices, Plath says. “Anything can happen. We are not at the bottom of this crisis yet. It is important for North Carolina and for Charlotte to remain vigilant and make sure that we shine our shoes and comb our hair and tell the board at Bank of America we’re just a darned good place to have a headquarters.”