The state treasurers of Connecticut and Illinois cautiously praised Wells Fargo after the scandal-ridden bank's board of directors on Dec. 1 amended its bylaws to require an independent board chairman.
Days earlier, Connecticut's Denise Nappier announced that the $30 billion Connecticut Retirement Plans and Trust Funds, of which she is principal fiduciary, and Needmor Fund, a Toledo, Ohio-based family foundation, had filed a shareholder resolution calling for such a move. Illinois Treasurer Michael Frerichs co-filed the resolution along with shareholder activists UAW Retiree Medical Benefits Trust, and Hermes EOS.
Pending formal submission of the bylaws change to the Securities and Exchange Commission, the investors expect to withdraw their shareholder resolution.
"Like a house built on shifting sands, however, this good work will be for naught if we don't have a solid foundation and put a framework in place for the board that will prevent a repeat of Wells Fargo's transgressions," Nappier said. "I look forward to speaking with Chairman [Stephen] Sanger on the work that lies ahead."
According to Frerichs, Wells Fargo's move would benefit those with an interest in the company.
"While this is an important step forward, we need to continue to encourage companies to do the right thing for the right reasons."
Several state and municipal issuers have sanctioned Wells Fargo after revelations that thousands of bank employees opened accounts for bank customers without their permission, charging additional fees to customers and generating performance incentives for staff.
Wells Fargo paid a $185 million settlement to the Consumer Financial Protection Bureau two months ago and chief executive John Stumpf resigned.
