By Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance
FORTUNE -- Bank of America's stock is hitting new lows, it has received worse credit rating downgrades than its competitors, and a fresh shareholder lawsuit has hit the firm. If you were a member of the Board of Directors, what would you do?
I'm guessing you'd be doing something to figure out where the company should go from here.
Perhaps you'd begin by assessing how stakeholders view the company and what kind of a job Brian Moynihan has been doing, as he nears his two-year anniversary as CEO at the company.
A few items to consider:
Shareholders: The stock price is down 60% from January 1, 2010 through September 23, 2011 (during Moynihan's tenure), hitting new lows last week despite the fact that the bank announced new restructuring plans. By comparison, the S&P rose slightly and JPMorgan (JPM) is down by 30%. And, as mentioned above, a group of shareholders filed a lawsuit related to disclosure issues last week.
Employees: The bank plans to eliminate approximately 30,000 jobs (the size of a small town) as part of its restructuring plans. At the same time, Bank of America continues to hire new employees.
Management: Moynihan has recently removed several top executives and promoted two people to serve as co-chief operating officers, David Darnell to head the consumer division and Tom Montag to lead the commercial division. Montag has worked for both Goldman Sachs (GS) and Merrill Lynch and received some negative publicity during the Senate's probe of Goldman. Will the promotion of Montag instill confidence in institutional customers? Do you think they'll remember Montag's past?
Customers: During the past year and a half, the bank has been at the center of a foreclosure paperwork nightmare. It ranks low in JD Powers' ratings of overall satisfaction in retail banking. And a recent MSN Money-IBOPE Zogby customer service survey put Bank of America last with more than 40% of its customers rating its customer service as poor. Less than 1 in 10 surveyed considered the service they received at the bank to be excellent.
Bank of America has placed significant emphasis on customer service, according to a study of 2,160 companies globally by research firm Beyond Philosophy in which Bank of America had the 5th highest number of customer experience executives. But, according to Steven Walden, senior head of research at Beyond Philosophy, despite its staff commitment, Bank of America is perceived to "not provide a great customer experience, with a level of disorganization in terms of the customer experience itself." This is in contrast to other smaller banks, he says, where the leadership is focused and the banks invest in their staff (like Umqua, Huntington and TD Bank (TD)).
Although it was reported that Bank of America failed to make a Fannie Mae list of banks with satisfactory servicer ratings, Fannie Mae spokesperson Andy Wilson would not verify whether or not Bank of America had satisfactory scores, saying Fannie Mae was not releasing that information at this time.
Government: Bank of America has come under fire for the way it has handled foreclosures in the wake of the housing crisis, and just two weeks ago, it received negative attention related to a sale of mortgage servicing rights to Fannie Mae.
These are some of the issues, which have arisen on Moynihan's watch. The legacy issues of governmental, customer, and shareholder legal actions related to the Merrill Lynch merger and other aspects of the financial crisis should also be taken into consideration.
Putting the ball back in your court, as a Bank of America director, you authorized payment of $10 million in performance-based cash and bonuses in 2010 to Moynihan. For your service as a board member at the bank, you earn between $250,000 to $500,000 or more, depending on your duties and circumstances. And as a director, you do have more information than is publicly available, so who knows? Maybe you'd be patient and wait to let things play out.
On the other hand, after this review, you might convince some of your fellow directors it's time for more than just cost cutting. Perhaps it's time for some serious succession planning and coming up with a few assertive ways to shore up the company's sagging relationships.
Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (http://thevaluealliance.com), a board advisory firm.
Okay, now. Imagine you are Ken Lewis, who yesterday announced his decision to take early retirement from his position at Bank of America. No, go ahead. Take a deep breath and put yourself in his shoes. Nice shoes, huh? Sure. That comes with the job. Hey. Get your mind off your wing-tips and pay attention. You want to understand why Ken walked? Look at it this way:
Choice #1: Everybody is MOREBing - Oct 1, 2009 11:24 AM ET
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We all have to work for a living. The question is how much. On the short end of the scale there are immensely successful and wealthy business executives who consider being available by BlackBerry and cell to be work. "He's traveling," their assistants will say, or, if they're on the west coast, "I don't have him right now. Can he get back to you?" I think of Stan O'Neal, the MOREBing - Jun 3, 2009 9:59 AM ET
So we have our stimulus package. I don't think anybody truly understands where the benefits will truly be felt most immediately, but if the thing creates even half the number of jobs that the president thinks it will that will be a good thing.
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In the huge Bank of America (BAC) fiasco/bailout/tailspin, there are a lot of people at whom it would be tempting to wave a wobbly finger. Ken Lewis is taking a lot of heat, and it's not hard to see why. His decision to purchase Merrill Lynch back last fall is looking like the ultimate investment in a money pit.
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Don't tell me it's all rational, Bub. It's a big old Vegas casino is what it is, where the House rules. And I don't know about you, but I don't feel like the House these days. I feel more like the guy whose looking for the exit into some some smaller boutique establishment where things make a little bit more sense. But where the hell is the frickin' door?Bing - Jul 29, 2008 1:16 PM ET
Bing's Blog page has been officially blocked at work with a code of "Social Networking." It's all so unfair! A social network? Us? Could that be? Every day we have as serious a discussion of current business-related events as the facts warrant!Bing - Apr 9, 2008 11:39 AM ET
Our fearless leader is in Saudi Arabia right now, doing a variety of things including, I bet, making sure that the family positioning is well set-up for the days when he is no longer in the best/worst job in the world. His dad does that quite a bit. And, I believe, his brother, too, come to think of it. The whole Bush family is over there all the time, sometimes MOREBing - Jan 15, 2008 9:59 AM ET
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