Management: Bank of America
Introduction
The board of directors of any company is the group of appointed members whose work is to basically oversee the entire activities of an organization. Its powers are normally delegated by authorities outside itself but the matters pertaining its number of members, how they are supposed to be chosen and when they are supposed to meet are contained in a company’s bylaws. If the organization has voting members then they are the ones responsible for the board selection while the stock cooperation’s the board is chosen by the stakeholders. In non stock company which the members are non voting members, then the board is the supreme governor of the institution and the members can at times choose the board members.
The legal responsibilities of a board organization vary from one organization to another depending on whether it is public or private and the jurisdiction of its operation. The chairman of the board is nominated by the members of the board and this position is the highest in any organization. The duties of the chairman of board include: presiding over meetings of assembled groups like the share holders meetings, a representative of the company to the outside world and conducting the groups business in an orderly manner, in addition to all these, he advises the CEO.
The roles of the chairman of board will vary from one company to the next depending on the positions that are held but the major role is to link the external world to the internal organization and to drive the organizations’ long-range vision. In some companies, the chairman of the board may be holding the position of the company president and the CEO and in this is case this becomes a very powerful role. In some situations, the chairman holds just the role of the chairman. The chairman will serve as the company’s officers and in some situations ex officio members of committees. The bylaws of a company will dictate the role of the company’s chairman of board (Lafley, 2009). Another major role of the chairman of board is to call for the meetings of the shareholders to discuss issues pertaining general directions of a company especially if the board of directors is divided over a given issue. The chairman is generally responsible for the addition and omission of agendas during these meetings.
The board normally works hand in hand with the operations manager and normally this relationship is based on trust if the vision of the company is to be achieved and basically this leads to the exchange of information concerning the company’s health and the status key initiatives. This type of relationship reflects on the company’s confidence and it fosters transparency of the activities of the organization.
The structure of board of members at Bank of America
The bank boards are normally structured so as to create synergetic relationship between the board and the management so as to deal with policies that are not successful together with personnel and the board members. The Board works in hand with the management and the shareholders to achieve its objective, which is to be the most admired bank. An example of Bank of America board of director’s structure is discussed below. The board has a non-management chairperson whose main responsibilities are to set meeting and its agendas, ensuring flow of information about the banks to the directors and the supervision and the evaluation of both the management and the board of directors. The board of directors has a vice chair person (president) whose role is to manage the daily operations of the bank together with representing the bank in public functions. Bank of America top management has a role of positioning the company to compete in an aggressive banking sector (Harrignton, 2000). The bank continues to strengthen its relationships with investors by trying to understand their needs through setting up of long term goals and strategies to achieve the needs. For the last two years Bank of America has continued to show impressive performance both on the S&P 500 and the Dow Jones Industrial Average (Knox, 2001).
As the leaders of the bank, the Board and directors believe customers are the most critical assets of the bank and the key influencers of innovations, branding and creating partnerships. The CEO at Bank of America plays a key role ensuring that each of the bank’s divisions, that is consumer, corporate banking, investment management and international operations are aligned with the banks strategies to create a global bank that meets the interests of different customers. As a result of the financial crisis experienced in 2008, the Board decided to balance its members through incorporating non-executive directors whose role is to monitor the activities of the executive and also contribute to development of the banks long term strategy. The board ensures that the bank follows the best standards when it comes to ethics and corporate governance related to issues lending, mortgages and investment banking.
In conjunction with the chief operating officer (COO), the board ensures that appropriate risk management strategies, internal control systems are effective (Johnston, 2008). Above all, the reporting and compliance systems need to be put in place by the executives to ensure that there is quality assurance. At Bank of America, under the direction of the board and CEO, the COO is mandated to put in place strategies meant to accelerate growth in profitability as well as guide global operations. Directors in charge of risk, legal, operations and IT all work under the directions of the COO who ensures that there synergy in their operations. The global economic downturn led to Bank of America rethinking the role of the COO by adjusting the roles to not only deal with operational issues, but also the financial intricacies of banking. Thus the bank continue to promote an environment where the COO’s roles have become cross functional , especially when it comes to doing jobs that were hitherto left to the Chief Financial officer.
The stakeholders of any given organization include the customers, the supplies, investors, management, employees’ family and the communities around the organization. The most important of these are the customers and the investors. At the Bank of America, the investors, customers, suppliers and the community are the most important stakeholders. The board and management is now than ever before accountable to the most important stakeholder which is the American people since the after the financial melt down, it is public taxes that were used to bail out the bank. Other stakeholders like NGOs, activists, investors and consumers play a big role in shaping the Bank’s corporate strategy. These stakeholders are increasingly exerting their influence by pressurizing the bank to only do business with other firms that adhere to issues related environmental conservation, promotion of social justice and good business practices.
Conclusion
As the saying goes, the success of a company is measured by its important resource which is human capital. The role of the Board of directors, CEO and other directors in ensuring company success cannot be underscored. The same can also be said of the stakeholders that are served by the companies and these include customers, investors, competitors and authorities. In their efforts to achieve the bottom lines and a sustainable business environment there is need for a symbiotic relationship between the main players in the company. The Bank of America has realized the important roles played by the Board, directors and stakeholders in driving growth.
References:
Harrignton, J. (2009). The Organization’s Stakeholders: Resource or Obligation. Retrieved from
http://www.qualitydigest.com/magazine/2009/may/column/organization-s-stakeholders-resource-or-obligation.html
Johnston. M (2000). The Tumultuous History of the Bank of America. Chicago: McGraw Hill
Knox, J (2001). A history of banking in the United States. New York. Bantam Books.
Lafley, A. (2009). What only the CEO can do. Harvard Business Review. Hbr.org
