JPMorgan Chase & Co. (NYSE:JPM) prevented a potential split of the role of the chairman and CEO of the bank after entering an agreement with its shareholders, which resulted in the withdrawal of their proposal seeking to install an independent chairperson.
In a statement, Lee Raymond, lead independent director of the board of directors of JPMorgan Chase & Co. (NYSE:JPM) said, “Engagement with shareholders is important and facilitates a better understanding of governance practices and communications that promote the best interests of the company and its shareholders.”
As part of the agreement with shareholders, the board of directors of the bank agreed to commission a report that will describe the steps taken by JPMorgan Chase & Co (NYSE:JJPM) to resolve that number of challenges that confronted it.
The largest bank in the United States also agreed with the Sisters of Charity of Saint Elizabeth that comprehensive communications around best practices and lessons learned is valuable for all stakeholders, and agreed to prepare a similar report. JPMorgan Chase & Co (NYSE:JPM) said it will consolidate relevant information and will provide it to shareholders in a readily available document.
Mutually agreeable solutions
According to Sister Barbara Aires of the Sisters of Charity of Saint Elizabeth, their resolution called for comprehensive transparency regarding the problems faced by JP Morgan Chase & Co. (NYSE:JPM), and the controls carried out to solve it.
“Through fruitful and instructive dialogue we were able to reach a mutually agreeable solution with the company. We look forward to the timely completion of the planned report, said Sister Aires.
The shareholders of JPMorgan Chase & Co (NYSE:JPM) raised concerns regarding the alleged misconduct of certain executives on their involvement illegal transactions such as the London Whale trading controversy. The bank lost billions of dollars from the transaction.
The Needmor Fund, which called for the appointment of an independent chairperson also agreed to withdraw its proposal. In behalf of the fund, Timothy Smith of Walden Asset Management said, “We are pleased with the positive response from the company and are confident that the goodwill stimulated from both of the agreements announced today will lead to productive ongoing work regarding these important governance matters.”
JPMorgan Chase & Co. (NYSE:JPM) emphasized that it will continue to welcome an ongoing dialogue with the proponents and other corporate governance professionals focusing on the major issues related to the role of the chairman and CEO at public companies.