Wells Fargo & Company has announced that Elizabeth “Betsy” Duke will succeed Stephen Sanger as independent chairman of the board, a result of shareholder displeasure over the company's recent scandals.
According to a news release, Sanger, along with long-serving directors Cynthia Milligan and Susan Swenson, will retire from the bank at the end of the year. These changes are in addition to the earlier appointment of two new independent directors this year, Karen Peetz and Ronald Sargent. The Wells Fargo board expects to name up to three additional independent directors before its 2018 annual meeting.
“The changes announced today reflect a thoughtful and deliberate process by the board that was informed by the company’s engagement with shareholders and other stakeholders,” Sanger said, "as well as the board’s annual self-evaluation that was conducted after the 2017 Annual Meeting and prior to its typical year-end timing."
Duke will become chairman of the bank's board on January 1, 2018, and Sanger will assist in the transition until his retirement. Duke, a former member of the board of governors for the Federal Reserve System, has served on the Wells Fargo board since January 2015 and as vice chair since October 2016.
“Betsy was the unanimous choice to lead the board as it continues its focus on strengthening oversight and rebuilding the trust of shareholders, customers and other stakeholders,” Sanger noted. “Her broad understanding of the financial system and markets, combined with years of main street community banking experience, make her the ideal chair to work with the rest of the board and Tim Sloan as Wells Fargo [& Company] (WFC) continues to move forward.”
Last year, Wells Fargo faced a huge news scandal after it was found employees in the retail banking units had opened fake accounts using clients' information. The scandal resulted in a record fine and the ousting of key executives, including the CEO. Just this month, the company announced a bigger investigation into the scandal, raising the possibility for a “significant increase in the identified number of potentially unauthorized accounts."
As part of the board’s commitment to refreshment, Wells Fargo also made several changes in board composition, including the election of a new independent director, Juan Pujadas, a retired principal of PricewaterhouseCoopers (PwC) LLC.
In addition, the company continues to focus on the recruitment of new directors who will complement the overall mix of skills, experience and perspectives on the board.