In an encouraging sign that corporate governance in America is only 99% myth, Bank of America (NYSE: BAC) CEO Ken Lewis was deposed from his role as chairman of the board. Walter E. Massey, the president emeritus of Morehouse College in Atlanta, will be his replacement.
The vote was far closer than it ever should have been, most likely because of corporate cronyism and broker non-votes: 50.34% of shareholders voted to remove Lewis as chairman. A third wanted him kicked off the company's board of directors entirely.
It's amazing: Ken Lewis takes Bank of America from its status as one of the most powerful financial institutions in the world and brings it to its knees, avoiding bankruptcy with loans from the United States government. The share price tanks and lawsuits fly. Attorneys general are investigating the possibility the he misled investors about the Merrill Lynch acquisition.
And 50.34% of shareholders vote to remove him as chairman of the board -- a concentration of power that most corporate governance experts agree is bad, even at companies with competent executives. I wonder how many would have voted to remove him if he were charged with killing people on Craigslist. 50.39%?
The next question will be how long Lewis stays as CEO. The shareholders have sent a clear message that they don't like him -- and the markets have sent a clear message that he stinks. His credibility is completely shot and even if he is still a talented managers, he's so tainted that he's probably ineffective at this point.
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