The number of companies without women represented on the board or executive team was astounding to me. Clearly there is work to be done.

Today, I’d like to talk about that work.

First by examining the backdrop of our current economic situation, then by exploring the implications of the new reality we find ourselves in, and finally by considering the impact of these circumstances on women–or perhaps it might be more accurate to consider the impact of women on these circumstances.

We’ve all heard plenty of economic commentary over the past eighteen months, with a variety of pundits offering their views. When I hear them, I’m often reminded of the words of that baseball player and philosopher (and yes, New York Yankee), Yogi Berra–who said “It’s tough to make predictions, especially about the future”.

So in that spirit, let me offer two predictions with great confidence:

First, as with all economic cycles, we will emerge from this economic environment and return to growth, and second, women will play a critical role in this emergence.

Now, I realize these predictions may sound simplistic–but the issues underlying them are far from simple.

While I see some promising signs, I don’t yet know exactly how our economic situation will unfold.

What I do know, is that our business landscape has changed dramatically.  And those changes have reinforced traditional needs and exposed others, all with implications for businesses today–and for the people who will lead them.  Before I get to those needs, let’s take a look at our current economic environment–but, from a very different perspective.

Let’s begin by talking about some real skyscrapers…no, not like those on your skyline here in Boston, but like some others that are not far from my home in Pasadena, California.

Giant Sequoias
One of the biggest news stories to come out of California this year has been the fires that have consumed more than 500 square miles of land across the state since the beginning of July.  Those fires have put some of California’s oldest and most beloved sequoia trees at risk–and, unfortunately, some have been lost.

The trees of Sequoia National Park are a marvel of nature.  Growing for some 2,500 years now, these trees often extend to more than 200 feet in height and can bear an estimated 11,000 cones.  In fact, the Park’s largest sequoia, the famous General Sherman Tree, is the most massive living organism on earth.  It stretches taller than a 27-story building–about half the height of the John Hancock Tower.

Interestingly, sequoia trees cannot regenerate without natural forest fires.  That’s because their cones grow high in the treetops and fall to the ground –but they will only open to release their seeds in the presence of intense heat.  Ironically, in burning off the underbrush, fires create the very conditions that enable new sequoia trees to grow.  Without fire, there can be no giant redwoods.

I mention this because something similar has been happening in our country for almost two years now.  Our economic meltdown has consumed so much in its path –jobs, careers, companies, industries …plans for retirement.

The heat has been intense.  And what has been left is an economic environment this country hasn’t seen in generations.

Ironically, the fire that has been our recession may have also created conditions for new growth.  The question is “have these conditions sufficiently burned off old ways of thinking along with old business practices”.

As an accountant, I believe that numbers tell a story, just as they have in the report JoAnn just shared.  So let me try to put the soundings I’ve heard together with the numbers I’ve seen to give you my impressions of today’s economy –and what may emerge from our new business landscape.

The Economy –A Cloudy Picture
We all know the story by now. In chasing higher yields, lenders abandoned long-held credit standards to approve millions of sub-prime mortgages, with the expectation that ever rising housing prices would improve the value of the underlying collateral and reduce risk.

But when property values began to decline rather than appreciate, all the models and attempts to engineer away risk failed, which, combined with extraordinary amounts of leverage, triggered a series of events that have touched the lives of millions of people in our country and abroad.  The result was an economic environment unlike anything we have seen in 80 years. While our recession didn’t morph into a depression, it’s important to remember that for many, the nest egg didn’t just crack, it broke–and that swift and sudden loss of great value seemed to leave nothing behind but a new sense of vulnerability.

Lately, however, we’ve seen headlines that have brought some glimmers of hope.

Globally, there appear to be encouraging signs –strength, actually, in Brazil, China, and India, and a return to positive GDP growth in France, Germany, and Japan.  Many economic experts, including our own economists at Deloitte, say that we’re at the “beginnings of a recovery.”

Is the recession over?

Last week, we had some very welcome news here at home, with third-quarter growth of 3.5%, the best in two years and an end to four consecutive downward quarters.  Helped by the government’s “Cash for Clunkers” program and a tax credit for first-time home buyers, the numbers for auto and home sales have trended upward.

Unfortunately, there are other numbers that also continue to trend upward –unemployment, foreclosures, and the federal budget deficit.  Still, the mood is one of guarded but growing optimism.  We’re seeing some of that in our clients’ interactions with us, which range from more scoping exercises for new work to more commitments for new engagements.

There seem to be indications that consumers are beginning to emerge from their “bunker mentality” little more than a year after the crisis.  But with tight credit, consumers probably won’t be able to spend at levels significantly greater than what they earn.  As a result, this recovery will be different, and most likely will be led not by consumer but government spending.

There is so much to talk about with this economy.  But I think that what everyone wants to know is what will happen next –and, if, after this recession is over, we’ll go back to “business as usual.”

My response . . .

How can we? A new reality is upon us.

First, old “norms” have vanished, perhaps forever but at least until our memories fade and another bubble forms. For now, it’s hard to imagine expectations of ever-increasing home prices, minimal levels of personal savings, and incredible leverage employed by financial institutions.

Along with changing assumptions, we’re also now faced with changing realities. Globally, there are new competitive pressures.  China, for example, will soon become …the No. 1 English-speaking country in the world.  India has more honors kids …than America has kids.

Here at home, much is also new and emerging –an increased regulatory environment for most of our businesses–new ways of interacting with one another through social networking sites like FaceBook and Twitter–an increased influence of Generation Y, with its commitment to make the world a better place.

But there is change underway in our society that is even more fundamental.  And if you want to know what the new reality will look like in our country, you don’t have to look too far to see it up close and personal.

What Will the New Reality Look Like?
I serve on the board of Catalyst, Inc, a nonprofit research and advisory organization focused primarily on the advancement of women.

Earlier this year, Catalyst produced a short video to address the business challenges of the day. It told executives that there is an “overlooked yet effective solution to help you make your numbers, and she may be seated right next to you.”

Catalyst works hard to highlight one of our country’s most productive yet most underutilized business assets –women.

We –the people in this room, have known for years that there is great value in the leadership of women.  But that value will not be fully realized until we give the issue of gender in the workplace the full respect that it’s due.

Because gender isn’t a “women’s issue.”  Gender is a business issue that companies everywhere will need to address –and capitalize on.

But …when?

I’m hoping that the answer will be sooner rather than later.  Not because it’s politically correct, socially just, or the “right” thing to do.  Again, numbers tell a story.  For example, there should no longer be the excuse that not enough qualified women are entering the talent pipeline.  In a situation that has reversed itself over the past 40 years, women now represent the majority of college students.  Today, for those who graduate with a bachelor’s degree, 57 percent are women.

Now, couple that with some other numbers that should have everyone’s attention:

• Currently, age 62 is the median age for retirement in the U.S.
• This year, an estimated 10,000 Baby Boomers will turn 62 –each day.  And in the next 10 years, 43 percent of the working population will become eligible to retire.
• Furthermore, research conducted by Deloitte indicates that there will be fewer young people to replace retiring workers every year for the next 30 years.

While today the labor market may feel different, with these staggering labor shortages projected well into the future, businesses simply cannot afford to neglect the individuals of any demographic group …as employees –or, as candidates for future leadership.

The effects of a growing pipeline of educated women and a maturing workforce have leveled the playing field.  And, now, the greatest economic crisis in 80 years has tilted that playing field toward what Maria Shriver calls the “greatest social transformation of our time.”  For the first time in history, women now comprise a majority of the American workforce.

In her study released just a few weeks ago called The Shriver Report: A Women’s Nation Changes Everything, Maria Shriver reports that, today, nearly 40 percent of mothers are primary breadwinners who bring home the majority of the family’s earnings.  Furthermore, nearly two-thirds are breadwinners or co-breadwinners, bringing home at least a quarter of the family’s earnings.

According to the report, this fundamental reset of our economy will drive a fundamental reset of the workplace.  And I see that reset in favor of not just women but everyone who needs to cope with the demands of today’s workplace.

To meet this new reality, Maria’s report calls for all of the things that women have needed for years –more flexible work schedules, comprehensive child care policies, redesigned family and medical leave, and equal pay.  And I’m proud that she has recognized Deloitte as her report’s “model employer.”  In doing so, Maria cited such innovative programs as Mass Career Customization, our approach to talent management that provides a flexible lattice organization with far more options than “up or out.”

The New Reality –An Array of Needs that Women Can Meet
The new reality is that today’s business landscape demands what women have proven they can provide. How will women influence this new reality?  I submit that there are two important areas to consider–their presence and position in the economy, and their proven success in governance

Let’s start with their presence and position in the economy. Take the classic business challenge of forging greater connections to clients and customers.  Of course, women have the skills and talent to do that.  But they also have a natural affinity working to their advantage.  Because, today, there’s a greater chance than ever before that the clients and customers that businesses need to connect with are women.

The changing face of business belongs to women –and not just because of women’s recent emergence as the majority of the U.S. workforce.  According to various reports, women also control more than half of our nation’s wealth.  Today, women wield purchasing power in excess of $14 trillion.  There are many clever names for this in today’s media, such as the “Sheconomy” or “Womenomics.”

Personally, I prefer to call it what it really is –power.

Think about it.  Women are nearly half of all U.S. shareholders.  Women buy half of all computers, more than half of all cars, and are responsible for a whopping 83 percent of all consumer purchases.

A few years ago, Deloitte recognized the changing face of business and wanted to better understand how women executives choose professional services providers.  In fact, 91 percent of our partners, principals, directors, and senior managers that we surveyed have pitched to women clients.  To help our people better understand gender differences among clients and potential clients, we worked with Marti Barletta, founder of The Trendsight Group, an organization focused on marketing to women. Using her research, we created our “Women as Buyers” workshops.

The insights we gathered on the purchasing behaviors of women are helping our people speak an important language–one that is helping us make the personal connections that build Deloitte’s most important offering–trust.

While the power of women in the economy is clear, their contributions in the executive suites and board room are equally compelling. Several recent studies–from Catalyst, and most recently, Pepperdine University–have documented this value, and the findings of these studies are impressive.  Across various financial measures, companies with women on their boards or in the C-suite reported returns that were consistently greater than those of companies that exclude women from business leadership.  In fact, in many cases, the returns were far greater.

(Would somebody please remember to mention this to those 30 companies in the survey without women in their boardrooms or executive suites?)

The returns associated with women and the diversity of thought they bring to leadership positions have been so persuasive that just last week, a Swiss company announced plans to create a new investment fund.  You may have read about the Women’s Leadership Fund.  Based in Zurich, Naissance Capital will begin this fund in January by investing in companies whose boards include women.  Naissance said that it created the Women’s Leadership Fund after several studies indicated that greater diversity and independence of opinions helps companies do better.

That linkage is also crucial to meeting another need that was exposed by our financial crisis –that of greater vigilance in risk management.

Women play a vital role by helping ensure that issues debated in the board room or C-suite are approached from many different perspectives. Women can provide greater role in risk management by providing an equal but different voice–one that generates better dialogue, a richer set of ideas, and a more creative playbook of alternatives.

With our economy ringing a loud wake-up bell, demographics clearly pointing to increasing opportunity for women, the extraordinary economic power women hold and their demonstrated positive contributions as leaders and board members,I’m convinced there has never been a better time for women to thrive in business and leadership.

Will they?

It depends …on you, and others like you.

Your ongoing efforts will move the numbers and change the results of the Boston Club Census report–in fact they may be the only thing that can. But if we leave it to others, if we try to embrace hope as a strategy, if the commitment falters, years from now we may be still talking about numbers that are discouraging.

Will the New Reality Mean More Women Leaders?
Like democracy, business is participative.  And leadership requires you not only to participate, but to be assertive, too.  We’ve all heard that if you wait for someone to ask you to become a leader, you will never be one.  That’s true.  But women can demonstrate leadership and make others aware of their accomplishments without being a braggart or speaking in a loud voice.

Like the intense fires that enable the big redwoods to regenerate, many forces have converged and ignited to change our business landscape forever.

Your involvement, your engagement, and your behavior are crucial to our ability to capitalize on the “new reality.”

By supporting organizations such as The Boston Club and creating awareness among the business community of the challenge, opportunity and business value for increasing the number of women in leadership roles…

By mentoring those women who will follow you and who are looking for guidance and support as they navigate their own careers…

By casting a wider net when looking for individuals to fill important leadership positions, either in the executive ranks or the board room, and sponsoring women for these meaningful, challenging jobs…

Women can take major steps forward in becoming business leaders.

It may not be easy.  But I do believe that it is possible.

As everyone here today has proven, having women as business leaders is good business–and now is the time to make what is possible into your own new reality.

As you rise up the corporate ladder, it can get lonely up top. You are working ten-hour days, and every minute of your time is consumed. Where are you getting your coaching, your space for strategic thinking or your external stimuli? Most of your companies put money aside for some form of yearly training for each employee. But, as you approach the higher echelons of your corporation or organization, you’re expected to be the pro and the one training others. And so you should. But some of the best training you can offer a high-potential executive so that he or she becomes an even better role model or trainer-and an even more effective leader-is the experience of being a corporate director.

As leaders of any company, you are expected to lead you business in innovation and new strategic directions. You also need to ensure that you are growing the breadth and depth of your organization and therefore have a good succession plan and do so while providing good financial results and ethical oversight. These are the very same mandates for a board director. My guess is that many of you have to present to your boards. You learn from being on the other side how board members think and how they look at strategic decisions and investments.

We all need external stimuli in our lives. By being exposed to the different issues of another company, you find that the underlying themes are often the same. You learn about best practices and how others handle similar opportunities or challenges.

You also lead from watching and participating in the conversations of a group of highly successful and effective heads of organization, who come with different experiences and perspectives. Boards usually include members from different industries, functions, geographies, and increasingly, different cultures.

On top of that, the simple act of taking a day out of your day-to-day frenetic schedule gives you time to think and reflect, which makes you a better leader. Board service also teaches you to stay at the strategic level and not to micromanage those who should be doing the work.

Board service may also present you with a nice transition for retirement. When you retire from your thirty-plus year career, your mind doesn’t retire. Serving on a board allows you to stay involved in the business world or current issues of interest. You’ve just spent years of building expertise in your given area. It’s nice to be able still to share all that knowledge, perspective and yes, war wounds on behalf of shareholders in helping a company grow successfully. The remuneration is not bad either, but that is not why you should choose to do board service.

Some enjoy board service so much that after retirement they create a portfolio career around serving on a couple of boards. You will find that these same people frequently serve on not-for-profit boards at the same time.

All of this assumes that you are qualified to serve on a board. In order of desirability, the pecking order usually goes as follows: sitting CEO, recently retired CEO, CFO, president of a company, president or SVP of a large division (global is better), then a SVP or head of a desired function, such as marketing. Depending on the board’s needs, you will also see smaller numbers of members from the professional ranks of law, academia, or government (in the ladder, retired of course) and others.

Can board service be a good career enhancer? Absolutely. Serving on a board broadens your perspective and your experience. It exposes you to best practices all of which you can take back to your day job. It helps to season you as a leader. Along the way, you meet really interesting people and are exposed to challenging problems and exciting opportunities. It is not for the faint of heart. But it is for those who want to make a valuable contribution to growing our businesses and society. It can be ever so rewarding.

Rita Foley leads the Director Service Practice for Crenshaw Associates.

I realize that the IRS Commissioner has not customarily addressed the NACD’s corporate governance conference…but what I want to discuss with you this afternoon is the important role that boards of directors can play in overseeing tax risk and tax strategies of corporations. After all, taxes are one of the biggest expenses of a corporation, so how they are managed is very important to most corporations.

Clearly, corporate boards of directors play an incredibly important role in the vibrancy of businesses and our economy. Boards are a source of creative ideas, strategic thinking, and, importantly, governance and oversight. Boards hold management accountable, and in that role, understanding the risk posture of the company is critically important.

So today, I want to share with you some observations of what I have seen since I’ve taken the helm of the organization responsible for collecting 96% of all federal receipts – around $2.5 trillion.

To begin, I understand that many of you – actually most of you – are not tax experts and you were not installed on the board because of your tax expertise. You bring other critical skills, experiences and expertise to the boardroom.

And I also understand that even with all of your sophistication, expertise and experience in business and financial affairs, it’s difficult to understand the tax consequences of a complicated business transaction, such as a tax-free reorganization or a hedging transaction, let alone the corporation’s overall tax profile as it relates to federal, state and international taxes. That’s why you need to have strong tax departments and outside tax advisors. After all, you have finance experts to help you understand the economic value of hedging transactions, and you need tax experts to help you understand the myriad and complex tax issues facing your company.

Now, my motivation to create this dialogue with you is based in part on personal and professional experience. I moved from the business world where I interacted with boards… to FINRA, the largest independent securities regulator in the U.S. ….to the IRS, where I am focusing on major trends, such as the globalization of tax administration, and innovative ways to strengthen and improve our tax system. In all of these roles, I have seen the importance of board oversight of major areas of risk.

So, I know first hand that in the post-Sarbanes Oxley world, corporations have invested significant time and resources on compliance issues and internal controls. In the tax arena, some have instituted regular meetings between the Audit Committee and the tax director to ensure an open dialogue.

As I mentioned earlier, tax issues should remain on your radar screen – and for good reason. It’s one of the biggest expenses on your income statement. In addition, a number of public companies have reported material weaknesses in internal controls related to taxes. Tax strategies can also present a financial and restatement risk, and sometimes when the cases are high profile, a significant risk to corporate reputations. In today’s business climate, the general public has little tolerance for overly aggressive tax planning that can be viewed as corporations playing tax games.

So, although the complexity of the tax code may make your eyes glaze over, Board members – like you –are critically important to making sure that the tax system works well and is worthy of the confidence of the American people.

But how can you increase your oversight of tax compliance given the limited amount of time you have available and the competing business issues you face?

Well, you probably know or could figure out, that the IRS conducts risk assessments of its own when determining how to use its time and resources and whom to audit. Similarly, the board of directors can assess its corporation’s tax risk profile, internal controls, and relationship with its corporate tax department, to help determine the tax matters of which it should be aware.

Now, we recognize that many businesses are trying to get it right. Positions taken in tax returns may be well-grounded and taken in good faith. Other tax positions taken may be more aggressive and use elaborately structured transactions or arrangements to push tax planning up to the edge, or beyond acceptable bounds.

Enter FIN 48, which establishes the financial statement accounting for uncertain tax positions, including recognizing and measuring their effect on financial statements.

Under FIN 48, companies must identify their material uncertain tax positions. They must quantify the company’s maximum exposure and estimated likelihood of winning or losing the issue if challenged by the IRS. And they must record as a liability a specified amount of money relating to these uncertain tax positions. In other words, FIN 48 is a very significant window into tax risk, liability and management in your company.

FIN 48 paints a picture of tax risk by indicating how much money a corporation has to book in tax reserves to reflect the risk should one or more of its tax positions go south. But let’s get behind the reserve numbers for a moment. What are they telling you – the board directors – beyond the dollars in the tax reserve?

They’re saying that the audit committee needs to know and influence what tax posture the tax planners are taking. They and you need to know whether that multi-million – or in some cases multi-billon-dollar bet – you and your company are making could be too aggressive and therefore risky.

So where does that bring us? What are the next steps?

Before I get to that, I want to be clear about what I “do” intend and “don’t” intend in this dialogue.

We don’t intend to second-guess legitimate and thoughtful business decision-making by corporate leaders. And we don’t expect that you will always agree with us on identifying and quantifying the risk of various tax positions. But we do want to engage corporate leaders about their roles and responsibilities in conducting appropriate assessment and oversight of tax risk.

I am suggesting that you, the leaders of your organizations, should have a mechanism to oversee tax risk as part of your governance process. For example you might want to:

• Set a threshold confidence level for taking a tax position…

• Discourage or eliminate opinion shopping by tax departments by having an independent tax firm, which has some direct dialogue with the board of directors, review major tax positions … Specifically address transfer pricing and the relative profit allocated to low-tax jurisdictions, and make sure they reflect real economic contributions made in those jurisdictions. And diving down a little deeper, here are some questions you might ask of your tax director and your external auditors relating to FIN 48:

• What was the process for identifying uncertain tax positions and how do you know all material issues have been identified?

• How did you go about determining the maximum tax exposure relating to each uncertain tax position? What makes you comfortable that it accurately reflects your maximum exposure?

• How did you go about quantifying the likelihood of winning or losing uncertain tax positions? Do you plan to litigate the issue if the IRS challenges the position? Does the external auditor or tax advisor agree with the tax director’s assessment?

• Could the company be subject to potential penalties, such as for underpayment of tax, negligence or worse? If so, are they appropriately recorded, and perhaps more important, what does this say about how aggressive the company’s position is regarding those issues?

There are already some IRS programs in place that help provide greater certainty and can give a board more comfort that there won’t be second guessing down the road. For example, our compliance assurance program, or CAP where we agree on issues with the taxpayer before a corporate return is filed, envisions full disclosure by the taxpayer in exchange for real time tax certainty. And the Advance Pricing Agreement program, where we agree with a taxpayer on pricing methodology before a return is filed, provides certainty in the complex and uncertain area of transfer pricing.

Now, we’re not the only government thinking about the notion that corporate taxpayers that employ sound management and governance practices on tax matters are more likely to be compliant.

One example is Australia. The Australian Tax Office publishes a Governance Guide for Board Members and Directors that suggests useful questions – similar to the ones I just posed – that a corporate director can ask of management.

Some of the Australian Tax Office’s questions include: Is there a material difference between the losses reported for accounting purposes and the losses claimed for tax purposes? If so, can the difference be satisfactorily explained? Is the structure and financing for your business or a major transaction complicated, perhaps more complex than necessary to achieve the commercial objectives? These questions give you a flavor of what some other countries are thinking about and doing in the corporate governance area.

On a broader scale, the Organisation for Economic Co-operation and Development has charted a worldwide trend of increased boardroom attention to issues of taxation. A recent guidance document outlines good corporate governance principals in relation to tax, based on advice from governments around the world.

In summary, my main observation to share with you is this: Taxes are an important expense, and like any important expense, management responsible will try to control it. In the case of taxes, controlling it can expose the company to challenge, which can result in reputational damage and perhaps large, unexpected expenses. So you need to understand how management controls this expense and how it decides how aggressive to be. You also need to be certain that reporting is effective.

Tax expense in this sense is no different from other expenses. Manage it too loosely and you give up profit. Manage it too aggressively and there are bad consequences. You, the board, have to oversee how management manages it. That means some level of understanding, a set of policy principles and then a control system of reporting that assures you that the policy is being carried out.

My goal here today was to start a discussion about the board of directors’ role in overseeing tax risk. I encourage you to have the dialogue, and offer the IRS as a resource as you continue to evolve your thinking about this topic. At the end of the day, my proposition is that the board needs to have the tools, not to do tax planning, but to oversee tax strategies and risks. I see my time is up today. I hope it was a good start and that this beneficial dialogue will continue and mature in the weeks and months ahead.

Thank you.

You know the expression, “That which doesn’t kill you makes you stronger.” What good is coming out of the current environment?

I think eventually we will have an improved set of financial institutions and markets. There’s pressure on financial institutions to enlarge their capital position. Many of them are doing that. Secondly, within the next half year we are likely to see proposals from the government concerning the supervision and regulation of financial markets. There’s also an effort to have more coordinated supervision and regulation on the international side. So, ultimately, I think we will not return quickly again to the kind of risk taking and speculative activity that led to the recent crisis.

Do you think that we had to go as far into deregulation in order to learn the excesses or should we never have gone in that direction?
I believe a good part of the problem that we had was due to ineffective monetary policy. The Federal Reserve contributed to that ineffectiveness by gradually adhering to an approach called “economic libertarianism.” Economic libertarianism is the desire for those who do well to prosper and for those who do poorly to fail. Monetary policy practice asymmetrically contributed to a massive monetary expansion, but then when it came time to discipline large institutions, the Federal Reserve and others realized that the systemic risk was too great. We just can’t allow that.

Was it helpful or hurtful that there was an administration change right in the middle of this?
I think it probably was helpful because the former administration that was in charge did not move dynamically enough or broadly enough and I suspect they came very late to the scene in terms of recognizing the problem. The first recognition of the problem hit, of course, during the summer months of last year. It actually started with Bear Stearns and even after that, [Bush administration] officials still said we had a strong financial system. There was an unwillingness to act decisively and massively to stem the hemorrhaging that was going on.

Why do you think it took them so long to act?
My impression was that after Bear Stearns was sold to JPMorgan Chase, the administration felt that most of the problems were behind us. They didn’t fully understand the extent to which financial asset values were declining and, as a result, many investments became more marginal until at last the values were going down drastically.

What have boards of directors learned from this?
I’ll make a general observation about boards. I believe that in an overall sense, board members have to be more involved in the business. Not in the business of the business, but I think, for example, that whatever the frequency of meetings has been, the frequency has to increase. Secondly, my proposal for boards of financial institutions is as follows: board members from major financial institutions have to be approved by the supervisory authority, the official supervisory authority. New board members have to meet with the official supervisory authority and be told very clearly what their responsibilities are. The official supervisory authority has to meet with the board periodically, particularly when they have done an examination or a review. The board has to meet independently with that supervisory authority independent of the operating management. People who serve on the board of directors of financial institutions should have some knowledge and skill in model building and the esoteric credit instruments of the financial markets. Those are the kind of prerequisites I think will be helpful.

There was a lot of talk about nationalizing the banks, particularly from the media and academic pundits. Do you think there would be any benefit to moving in that direction?
I think in the long run, a nationalized banking system is a politicized banking system. It’s very dangerous. Because of the demise of a number of institutions, financial concentration actually increased during the last year and a half. And that’s a dangerous, dangerous development because that leads not to the market process of allocation of credit, but to a more subjective involvement of the government with that process. That is a danger that we still face. I would argue that if these large financial conglomerates continue to dominate as they have, the ultimate would be that they would become what I would call financial public utilities: that would mean their profitability would be controlled and their growth would be controlled. They’d be too big to fail, and that is not good for an economic system.

So you’re not buying into the calls for a scaled-back industry more focused on lending?
If that’s done, then automatically there are some activities in large financial institutions that would be decreased or removed. For example, I find it very difficult to understand why a large financial conglomerate institution, which has a big deposit function in it, should own an equity position in a hedge fund. Quite a few large financial institutions do own equities in hedge funds. I think that leads to conflicts of interest. I find it difficult, really, to understand why an institution that underwrites securities, whether it’s bonds or equities, should also, for example, be able to facilitate what you would call mezzanine financing for a business that’s being taken over. There’s a conflict of interest in the process.

How do you feel about FAS 157 mark-to-market regulation?
That is a very thorny issue, underlying the process of securitization. Securitization means a transfer of an unmarketable instrument to a marketable obligation. The moment you do that and you say it’s a marketable obligation, there’s supposed to be a price. And if there is a price discovery how can you then say, “Well you can take this obligation and hold it to maturity?” If you are going to book it and hold it to maturity, that’s one thing, but you then have to disclose periodically what the current value of that obligation is versus the cost at which you bought it. You cannot hide a loss in a securitized market. It sounds to me that you have securitized markets when everything is steady and then you move away from them when there’s a high degree of volatility. I don’t think that will fly with the investor community.

With all of these different regulations being considered, I have to guess that being on the board of a financial services firm is a pretty thankless job these days.
I think it’s a very difficult job and I would assume that over a period of time, there would be many changes made in the management of financial institutions and in the board of directors.

We’ve heard people say that in a truly effective company, the CEO is really the Chief Risk Officer. How could so many good CEOs have gotten it wrong?
Well, let me rephrase it a little bit. If you remember, a number of years ago Chuck Prince, who was the head of Citigroup at the time, said “As long as the music plays, we have to be on the dance floor.” What I suspect he meant is this: If Citigroup is not participating in the market while there is all this fluff in the system and available credit, then there’s the risk that the institution loses market share. Then there is the risk that some of the personnel may not get the reward that they aspire to. Then there is the risk that earnings per share may not be what was anticipated and the market will then say: ‘Well, somebody else is doing better than you.’ So, in that sense, the senior management becomes a captive of the system.

If the job of finding great new directors is difficult, so is the job of sitting on a board, especially for the first time. Here is some common-sense advice for new directors. First, and most importantly, remember that directors direct and managements manage.

Why Serve?
Understand why you choose to serve and embrace it. In earlier times, directors often served for prestige, compensation, and fellowship, and their performance rarely was challenged. Those halcyon days are gone. You now must consider reputational risk, substantially expanded (and often last-minute) time commitments—perhaps at little per-diem pay—and a more formal environment (which can impinge on candid strategic focus). Do due diligence on the company and its industry, as you will be judged in the court of public opinion—and perhaps even in the courthouse. You’ll need courage, good business instincts, and the rare ability to judge others accurately.

Directors must exercise due care in decision making and need, as much as possible, to ensure that the information they receive is accurate, complete, timely, and verifiable.

Reliance on Outside Advisors
As a matter of corporate law, directors are generally entitled to rely on advice from outside advisors, including compensation consultants. Directors should exercise care in selecting experts and shouldn’t hesitate to question those experts as much as necessary.

We recommend that the following be adopted as standard best practice for directors:
1. Audit Committees should meet regularly with supervisory partners of their firm’s auditors, not just the audit partner, and should require that the auditors disclose conflicts and disagreements about accounting matters and the consequences thereof. Auditors already disclose conflicts with management and “opinion-shopping”, but directors need to understand the “close calls” that accountants are making.

2. Compensation Committees should focus more on actual performance and on compensation expected under different scenarios, and less on consultants’ standard pitches on comparables.  Rewards for performance must be based on realistic goals, taking into account the environment and the factors management controls. In general, paying annual bonuses for performance only relative to an earnings budget should be avoided (because management controls the budget) and relative to peers’ stock performance equally (because management doesn’t control either its own or peers’ stock prices). Further, mark-to-market accounting of financial investments, determination of pension liabilities, and other key P&L components can be manipulated to affect reported profits and compensation. True operating cash flow, and performance relative to competitors, while also not perfect, are worth considering as performance measures. Proper use of deferred payouts tied to actual realizations will go a long way towards realigning managements’ and stockholders’ interests.

3. Boards should receive regular presentations from outside counsel about important trends and cases in corporate law, especially those affecting their duties and their liability. In addition, directors should be assured on a regular basis that each of their primary law firms has brought forward any legal or ethical concerns.

Board Oversight
It goes without saying that boards should focus on economic and financial scenarios covering the full gamut of assumptions. In the current environment, liquidity is a key concern. At other times, expansion or strategic transactions may play a larger role.

Management will always control the flow of information, and even deeply engaged boards will be on the losing end of an asymmetry of knowledge. But directors must exercise due care in decision making and need, as much as possible, to ensure that the information they receive is accurate, complete, timely, and verifiable.
We offer the following suggestions to mitigate, at least partially, the inherent disadvantage directors face due to this asymmetry.

First, ensure that management provides access to, and explanations about, competitors’ performance. Detailed understanding of relative competitive assessment of revenue growth, operating margin, employee turnover, customer satisfaction, and pricing policies will be far more useful than reiteration of historical financials or unsupported projections. Rating agencies face conflicts and their work cannot always be relied on (in any case, ratings often lag reality), and securities research can be superficial and dominated by management or employers. Spend time finding out how the firm is really doing.

Second, create and exploit opportunities to engage informally with employees at all levels of the organization. Plant managers, sales staff, and human resource middle managers, for example, will have a less edited view of how the business is going than you will hear at board meetings.

Third, make sure senior management regularly reinforces the responsibility, under a code of conduct or ethics policy, for every employee to notify an outside board member, anonymously or not, of any planned or known misconduct, whether financial fraud, Foreign Corrupt Practices Act payments, improper behavior, or other improper actions. The purpose of this “honor code” is to give directors more eyes and ears.

Fourth, make sure Board meetings include enough time for the independent directors to reflect in executive session on the reports they have received and to raise questions for later follow-up.

It is important for directors to have a good working relationship with management, and, at the same time, one that permits directors to exercise their responsibilities. This relationship best can be described as one with “healthy tension.” Directors and management need to understand that asking probing questions is not done out of suspicion: Sometimes judgments of senior management are just wrong, and directors must press their questions, no matter how uncomfortable this becomes.

Knowing Good from Bad
There is no perfect system for identifying a CEO who lacks honesty, integrity, or capacity. Just as a board needs to know the physical health of top officers, however, it also should (subject to reasonable limits on privacy) understand their financial health, and, as much as possible, their values. Financial circumstances, especially excess leverage, sometimes force desperate people to take improper steps.

One tip after years of experience: In addition to probing executives’ financial health, if a CEO regularly requests less compensation than his/her compensation committee would have awarded, that CEO is less likely to get the company into trouble via excessive risk taking or fraud.

Good luck to all new board members, and, remember, selecting a good CEO and helping him or her achieve the goals set by the board is one of your most important jobs.

Herbert S. Winokur is managing general partner of Capricorn Holdings and has been a director of numerous public companies.

As the head of a firm that advises many boards on executive pay decisions, I understand the complexities of the process and agree that parts of the system need fixing. But I also know that enacting reactionary and overreaching reform will do more harm than good.

The Treasury Department, Securities and Exchange Commission, and Congress all have reform proposals on the table. Hewitt supports the overarching intent of these efforts: to improve transparency and accountability so that shareholders can better evaluate the appropriateness and fairness of a company’s executive pay practices. But this debate is high on emotion and short on facts. The growing and often ill-informed rhetoric could lead Congress or the SEC to take actions that ultimately deprive boards and their compensation committees of the very best and most qualified advisors at the time when they need those most.

Somewhat hidden amongst many worthy reforms,  there is one particularly damaging measure that would require multiservice firms that routinely offer a range of services beyond compensation advice to reveal competitively sensitive information about all of the services they offer the company. This disclosure would imply conflicts of interest that don’t actually exist. In fact, every single reported academic study on the topic has refuted this claim. Nonetheless, the end result will be unavoidable: boards will move their work to smaller boutique consulting firms to get around the stigma of this disclosure, which will limit the choice of advisors available to boards and the depth of resources at their disposal.

We strongly support increased transparency, but it must be relevant to the situation and shouldn’t be achieved at the expense of boards’ ability to administer good governance. This proposed fee disclosure requirement would dramatically change the competitive landscape for pay consultants while doing nothing to solve the underlying problem: executive pay abuses. In fact, the SEC’s current proposal would reward some of the same boutique consulting firms that advised most of the financial services firms referenced in a recent Washington Post article highlighting executive compensation abuses. Independence will not be achieved simply by requiring, either directly or as a consequence of shareholder pressure, that board compensation committees strictly use boutique consulting firms. One might actually argue that the boutique firms are less independent simply because each client represents a much higher percentage of their annual revenues putting more at stake if there is a fundamental disagreement in approach between the consultant and the board.

That’s why Hewitt supports reforms that make sense. We stand behind four of the five changes proposed by the SEC. We’re supporting greater transparency about director qualifications, stock compensation valuation, how all elements of executive compensation are reported, and the makeup of company leadership. We also advocate for disclosure that matters. Boards should be required to explain to shareholders the protocols they use to ensure the objectivity of the advice received from their compensation consultants. Then fee disclosures would kick in only when the possibility of a conflict of interest reaches a predetermined threshold–similar to the system used by the New York Stock Exchange. These goals reflect the good governance principles that we have counseled our own clients to follow.

Instituting these reforms across the entire industry would be an enormous step towards ensuring objectivity of advice, increasing transparency for shareholders and strengthening board-level accountability. They would achieve the intended goal of reform–stamping out the select cases of abuse–without taking away the ability for boards to seek counsel from the best-equipped advisors at a time when they need them the most.

The boards at America’s public companies hold the fiduciary responsibility and are accountable to shareholders. Let’s give them the tools and resources they need to fulfill that obligation.

Russ Fradin is chairman of the board and CEO of Hewitt Associates, a human resources firm that specializes in consulting and benefits outsourcing.

Unfortunately, however, the quality of senior-level executive assessment and the board’s involvement in it often leave a lot to be desired. When many of the present-day members of boards were rising in their careers they weren’t exposed to good structures and processes for senior-level executive assessment. So while directors may feel they are on familiar ground when, for example, they’re engaged with financials, they may be unfamiliar with best practices in senior-level assessment. They may even feel a bit uncomfortable with what can seem an amorphous subject. They needn’t. These five principles can help them achieve the clarity that such critical discussions deserve:

Based on 25,000 assessments over a five-year period, we have identified six core leadership competencies: results orientation, strategic orientation, collaboration, team leadership, change leadership and developing organizational capability, which includes developing individuals as well as driving talent management overall.

1. Adopt a behavioral, as opposed to a psychological, approach.Senior-level assessment can have several goals: identifying rising stars, matching people to specific positions, uncovering development opportunities, or planning CEO succession. Psychological assessment purports to tell you who the executive is. We see many clients wanting to use personality tests or employ psychologists to probe the psyches of potential CEOs or senior executives. The approach seeks to gauge such things as problem-solving style, maturity, emotional intelligence, and interpersonal style. By contrast, behavioral assessment seeks to predict what the executive will actually do. Will the executive take swift and decisive action in times of crisis? Will the executive get people on board with dramatic change? Will the executive develop capability within the organization? Although the behavioral approach might include a psychological element, it has the great advantage over purely psychological approaches of being applicable to the business and its results.

2. Use leadership competencies but don’t overcomplicate them.
Assessment rightly focuses on leadership competencies – the abilities that are indispensable for leading people and organizations no matter the industry. These are important because they enable one to go beyond superficial assessments of whether someone is a “strong leader.” However many companies unnecessarily overcomplicate the issue by developing lists of as many as 20 or more competencies they expect in a leader. In fact, far fewer competencies cover the issues of top leadership.

Based on 25,000 assessments over a five-year period, we have identified six core leadership competencies: results orientation, strategic orientation, collaboration, team leadership, change leadership and developing organizational capability, which includes developing individuals as well as driving talent management overall.

Those six things are what business leaders do, unlike people in functional roles where competencies might be more discipline-specific. Beyond these six leadership competencies, lists can become repetitious, unnecessarily detailed, and unfocused. They’re also unwieldy – board members have a hard time keeping them all in their heads and arriving at a clear picture of an individual assessment.

3. Develop a clear sense of what you’re looking for.
Job specifications should be developed in terms of the strategy of the organization going forward. In a time of retrenchment or recession, for example, the role may call for someone with superior operations skills or the ability to do more with less. A growth strategy in global markets may call for someone with international experience and a demonstrated ability to work across cultures. A language of assessment that is behavioral enables you to measure an executive against the results envisioned by the strategy.

4. Develop a common language.
Clear job specifications, a manageable list of leadership competencies, and assessments couched in behavioral terms provide board members with a common language through which they can engage the issues. Tied to action and business results, this language enables them to talk in concrete terms rather than engage in psychological speculation or vague, unfocused discussions. Further, the more they use this language, the more adept they become, continually improving the quality of their participation in senior-level executive assessment.

5. Leverage third-party assessments.
In putting together rosters, top sports teams don’t evaluate only their own players. Neither should companies. They should benchmark internal talent against external talent, continually assessing them against company-specific challenges and behavioral leadership competencies.

Companies that conduct assessment in a vacuum determine only who is the best they have, not the best that they can get, or what “best” looks like from a global perspective. Third-party partners who track talent and are experienced in senior-level executive assessment can bring that wider perspective. Further, third parties that are free of the biases that can inhibit discussion offer a way of surfacing issues that might otherwise go unspoken. And with a behavioral approach, third parties can bring real business discipline to the conversation.

A number of everyday maxims affirm our sense that what people do is more important than who we, or they, think they are: “Actions speak louder than words.” “Walk the talk.” “Lead by example.” A behavioral approach to assessment reflects not only those common-sense sayings, but also the growing empirical evidence that how a person does something predicts success better than his or her qualifications or psychological traits.

In skilled hands, competency-based interviewing probes for competency-related situations and behaviors that are relevant to the job and the company. Instead of simply retracing a person’s achievements, the interviewer focuses on the “how” questions that open windows into the individual’s behavioral characteristics, enabling clear judgment of the candidate’s ability to perform as a leader. Board members who insist on this approach will not only help improve the organization’s capability in assessment but also the board’s ability to oversee it.

Stephen P. Kelner, Jr. and Ashley R. Stephenson are global leaders in Leadership Strategy Services at Egon Zehnder International. They can be contacted at steve.kelner@ezi.net and ashley.stephenson@ezi.net.

In today’s rapidly evolving regulatory environment, directors are increasingly expected to act proactively in raising issues and asking questions that delve into every conceivable area of risk. One such area relates to the corporation’s defined benefit and defined contribution plans. Though ERISA permits the board to appoint others to serve in the capacity of “named fiduciaries,” thereby delegating the operational responsibility for managing the pension plan assets, the board retains a residual responsibility to act prudently in overseeing and monitoring how those assets are being handled by the named fiduciaries. The U.S. Department of Labor has long regarded the right to vote the shares owned by the pension plan as a plan asset that must be exercised.

In discharging its duties, the board should therefore inquire how the corporate employees who manage the pension assets are complying with the ERISA rules, which require that the shares be voted in the best interests of the plan participants and beneficiaries. It is not sufficient for corporate employees to just delegate the voting responsibility to the plans outside investment managers and then adopt a “three monkeys” approach.

The board, or an appropriate committee, can and should ask management for a report at least annually on whether, how, and by whom the plan assets are being voted. For example, the board can create an internal fiduciary review committee, which can be composed of company employees, to formulate voting policy guidelines establishing how the shares will generally be voted, and to itself determine the vote in the relatively rare cases which either the guidelines don’t address or which involve exceptional circumstances (e.g., proxy fights). This is the same process that the investment firms, which manage corporate pension assets, typically follow. Regardless of whether the voting decisions are made internally or by an outside investment manager, the ERISA requirement is the same: Votes must be cast in the best interests of the plan participants and beneficiaries.

In its monitoring role, the board should understand which process is being followed, and ask who within the corporation is reviewing both the voting policies and, periodically and on an after-the-fact basis, the actual votes to make certain that the corporation is in compliance with the ERISA mandates. This is especially important because there have been a number of reported instances in which the voting agent, generally through clerical error, failed either to vote the shares at all or to vote them in accordance with the shareowner’s established voting policies.

It should be a simple matter for the corporate managers with responsibility for the pension plan assets to prepare a summary report for the board indicating whether the shares had been voted, and how they were voted. Every mutual fund today must by law prepare such a report once a year and make it publicly available to its shareholders. Given the board’s continuing fiduciary responsibility for the corporation’s pension plan assets, it should expect no less from cognizant corporate employees.

James P. Melican is chairman of PROXY Governance, a provider of proxy voting and corporate governance services.

Four directors will be recalled, instead of the entire six originally reported, said S. Balasubramanian, chairman of CLB, a quasi-judicial body.

“The government has asked us to recall four directors. The relevant orders will be passed Monday,” he told Dow Jones Newswires.

In January, the CLB, acting on a request from the government, replaced the then-Satyam directors with six of its own after founder B. Ramalinga Raju said he had overstated the company’s profits over several years and created a false cash balance of more than $1 billion.

The five new board members are George F.J. Gosbee, chairman and president of Tristone Capital; Douglas Steenland, former CEO of Northwest Airlines; Scott Stuart, a founding partner of Sageview Capital; Ronald L. Thompson, chairman of the board of trustees for Teachers Insurance and Annuity Association; and Stephen Wolf, chairman of R.R. Donnelley & Sons Co.

“The formal creation of our board of directors is another important step toward building a viable Chrysler Group for the long term,” said C. Robert Kidder, Chrysler’s acting chairman in a statement.

Fiat CEO Sergio Marchionne is currently determining which vehicle models the company will continue to produce and where production will occur.

Chrysler’s sales dropped 42 percent in June as its overall market value fell 28 percent. In addition to the five new board members, Marchionne; Alfredo Altavilla, CEO of Fiat Powertrain Technologies; and James Blanchard, the former Michigan governor who was appointed to represent the interests of a United Auto Workers union health-care trust fund, complete Chrysler’s new board.

The U.S. government had an active role in selecting the new board members, including appointing Kidder, Steenland, Stuart, and Thompson.

Board members Liddy, Dennis Dammerman, George Miles, Suzanne Nora Johnson, and Morris Offit were re-elected. Liddy, who said last month he will step down as CEO as soon as a replacement takes over, has said he also plans to resign as chairman and that the two posts should be split.

AIG hired executive search firm Spencer Stuart to find the next CEO, two people familiar with the situation told Bloomberg. Thomas Neff, U.S. chairman of the recruiting firm, is involved in the search.

KB Home Chairman Stephen Bollenback, AIG’s lead independent director; Harvard University professor Martin Feldstein; and James Orr, whose reappointment was opposed by unions because of his role on the compensation committee.

“Goodbye and good riddance,” said shareholder Kenneth Steiner when the meeting was opened to questions from investors.

AIG plans to reduce its debt under a Federal Reserve credit line by $25 billion by passing down stakes in two non-U.S. life insurance units.

AIG has received a total of four bailouts, totaling $182.5 billion, after agreeing in September to turn over a majority stake in the company to the U.S. government.

“We believe there is an excellent chance that we can repay the government,” Liddy said. “The government is not prepared to make any adjustments” to the arrangement that turned over majority control to the U.S., he said. “My hope would be that as we make progress in the overall restructuring, that maybe those conversations will bear fruit.”

AIG has disclosed transactions raising about $6.7 billion. “We have determined the destinies of nine of our major businesses spanning everything from life insurance in Taiwan to global real estate, and have specific plans for each of those nine,” Liddy said. “We expect this process to advance steadily in the next six months, and may involve public offerings.”

The new slate is needed as the company stands to see one retirement and three other directors not standing for re-election. The meeting will be held on Wall Street and will be the first public opportunity for shareholders to vent frustration since the insurer’s financial implosion last year.

AIG had delayed its annual meeting, which is usually held in May, to allow time to seek out new directors. Only George miles and Morris Offit, who have served as directors since 2005, will remain, and the rest of the 11-member board will be newly elected.

According to Reuters, joining the board since 2008 were Suzanne Nora Johnson, a former Goldman Sachs vice-chairman; Dennis Dammerman, former General Electric finance chief, and Ed Liddy, CEO, although he plans to stand down as soon as successors are found.

The rest of the board will be comprised of nominees: Harvey Golub, Laurette Koellner, Christopher Lynch, Arthur Martinez, Robert S. (Steve) Miller, and Douglas Steenland.

Some of the larger shareholders are expected to vote against the company’s remuneration policies, the annual report, and accounts. Others have warned they will vote against or withhold votes for the re-election of Lady Louise Patten to the company’s board.

Chairman and CEO Sir Stuart Rose is planning to retire by July 2011 and shareholders are uneasy over who will replace him. Shareholders were already perturbed at the decision to make Rose both chairman and chief executive.

Lady Patten, chairman of the remuneration committee, is under fire for pay issues, despite Rose and Steven Sharp, executive marketing director, earlier this week announcing that they would give up their more than 1.5 million pounds of long-term bonus shares.

The search for Rose’s replacement could start as soon as this fall. Sir David Michels, deputy chairman and senior independent director, has indicated that he would like to replace Rose, however Rose does not wish Michels to be his replacement.

Speaking at the 15th Annual Stanford Directors College, Bartz said she felt fortunate that she wasn’t around when Icahn was leading a proxy battle aimed at forcing a deal with Microsoft. She said the board was better to have a “smart guy” like Icahn on the board.

However she said she believes boards need a diversity of ages and should be selected from different industries and positions—not just a bunch of CEOs.

Her comments came two days after Yahoo disclosed that its second quarter job cuts cost the company between $22 million and $27 million.

The resignations were effective Wednesday. The board now has 16 members.

“Each director’s decision to resign was not as a result of any disagreement with the corporation or its management,” the company said in a Securities and Exchange Commission filing.

Prueher, 66 years old, is a retired admiral in the U.S. Navy who was named to the board in January. Franks, 63, is a retired general in the U.S. Army who oversaw all combat operations in Iraq and Afghanistan in 2003. He joined BofA’s board in 2005.

The suit names current and former Intel directors, alleging they failed to prevent the company from committing anti-competitive practices to monopolize the market for microprocessor chips. The suit was filed by rival Advanced Micro Devices.

U.S. District Judge Joseph Farnan, who is presiding over all the cases, ruled Thursday that the complaint naming Intel directors should be dismissed. The judge wrote that the plaintiffs failed to meet legal standards for bringing such an action. He ruled that the plaintiffs should have brought their concerns to Intel’s board of directors, or made a case that such an approach would have been futile.

The new board members are Donald E. Powell, a former chairman of the Federal Deposit Insurance Corp.; Susan Bies, a former member of the board of governors in the Federal Reserve system; D. Paul Jones Jr., the former chief executive of Compass Bancshares, and William Boardman, a former executive at Bank One, which is now a part of JPMorgan Chase.

“These new directors bring a wealth of experience in financial services from a variety of perspectives,” Massey said in a statement. “Their participation will make our board even stronger as we move our company toward achieving its true potential.”

The board changes are part of an overall management change, including the departure of CRO Amy Woods Brinkley. She is being replaced by Greg Curl, a longtime bank executive who has overseen the bank’s acquisitions and deal-making.

The announcement comes just days after a June 3 letter issued to BofA requesting the presence of chief executive Kenneth Lewis before the House Committee on Oversight and Government Reform on June 11. The Committee’s goals in the meeting are to determine BofA’s knowledge of the solvency of Merrill Lynch before it announced its intentions to purchase the investment bank late last year.

The investigation seems to be focused on the possibility that Lewis may have made conflicting statements in communicating the details of his bank’s acquisition of Merrill Lynch.

Tillman left BofA on May 29, while Brinkley will depart at the end of June. BofA director Temple Sloan also resigned last week. Lewis himself has claimed he will leave in no more than three years.