Wachovia’s decision to unburden Ken Thompson of his role as bank chairman was tentatively praised Friday as a move to give more voice to shareholders. However, some analysts expressed doubt that the change would make a difference.
The bank announced late Thursday that it was separating the positions of chairman and CEO, meaning that Thompson remains chief executive but will no longer run the board. Lanty Smith, the board’s lead independent director, takes the title of chairman.
Most companies have one person who fills the role of chairman and CEO. However, their ranks have been falling in the past few years as shareholders advocate for independent directors.
A board of directors is supposed to represent shareholders and monitor and advise the management. It’s hard to do that, they say, when the chairman is also the management.
Thompson has been under fire for decisions such as purchasing mortgage lender Golden West and trading in subprime-backed securities. His board has been criticized for approving those decisions.
Most of Wachovia’s directors are independent, meaning they have no material relationship with the bank. In 2007, the board met without Thompson three times, according to company filings.