Bank of America Shareholders Back Majority Vote System for Directors

April 27, 2006 ( - Going against objections by management, the shareholders of Bank of America Corp. voted yesterday to change the election process for its board of directors in an effort to make them more accountable.

The non-binding measure asks the Charlotte company to require nominees to the board to gain a majority of shareholder votes, which would replace the current requirement that they only receive a single vote, according to a report by the Charlotte Observer.

Management had said the measure was poorly constructed, because the board could be forced to appoint its own members if an election did not produce a clear winner, the paper reported.

 The proposal gained a 56% majority of the vote, so chief executive and board chairman Ken Lewis said directors would “carefully consider” making a change.

The proposal was led by the United Brotherhood of Carpenters and Joiners of America and is part of a larger push mostly led by unions — who have power over many large companies because of their retirement funds — to make it harder to win a seat on a company’s board.

Making it harder to win a board seat is the most common goal of shareholder proposals at annual meetings this year, according to Patrick McGurn of Institutional Shareholder Services Inc., a Rockville, Maryland, firm that tracks shareholder votes.

According to the newspaper’s report, about 70 companies have adopted a majority vote requirement, and about 80, including Wachovia Corp., have adopted a requirement that allows the board to decide, when candidates fall short of a majority, if they should get a seat.