Brian Moynihan's Battle Cry is "No Excuses", Here's Why
Sitting down with Bank of America Chairman and Chief Executive Officer Brian T. Moynihan can sound a bit like a visit to the human resources department, where the rubber, essentially, meets the road.
IN A RECENT INTERVIEW, Moynihan, famous for his battle cry “no excuses,” was talking about the ideal corporate board when he veered off course to churn through a list of employee benefits at BofA. Suddenly, he’s talking about the $35,000 baseline salary and the healthcare policy that balances the needs of financial, physical and emotional wellness. He mentions the 16-weeks of paid pate nal leave that is used, up to 40 percent of the time, by men he says casually. He mentions “sustainability” and “diversity,” and says the BofA has “environmental responsibilities.” It seems the second largest bank in the country is trying to A) keep up with the times and B) take care of its own.
Shareholders, it turns out, are on a short and critical list of constituent groups Moynihan has to worry about. This list includes employees, the government, customers, communities, the environment and society as a whole. Did we leave anyone out? If so, this is not by design. For Moynihan, the perfect corporate board is made up of experts from a wide range of special interest groups, including minorities, women and “everything in between.” Hispanics are on the list, Blacks, Asians, everyone else. In the meantime, “challenge” is a word that frequently comes up, mostly in the context of board members challenging the bank’s management to get it right.
Part of Moynihan’s job is to remind people that society at large is one of a bank’s primary constituencies. Through the power of lending, a bank has a great deal to say about what happens in the private sector – who builds what, where and when. As such, when BofA commits $300 billion in low-carbon business investing by 2030, they are steering society through one of their self-imposed mandates – or wickets – which happens to be a sustainable future. When they move $250 million each year to charities, they are defining who we should help in broad strokes.
If BofA agrees global warming is a problem, people wake up to this news. When they change an employee policy, corporate America takes notice. Bank of America has, in effect, a medium-sized city on its payroll – 208,000 people, which is slightly larger than Salt Lake City or Grand Rapids, Michigan. BofA has, according to one online source, 67 million customer relationships – that’s 67 million checking accounts, savings accounts, home and car loans, which is probably why Moynihan says perspective is everything. The board’s job is to be “completely independent of management,” he says. Their role is to manage risk, place the bank’s top talent in the right jobs and challenge management at every turn.
Further, board members are fairly clear about this point: Customer service comes first. If that is true, profits will follow. But let’s worry about that later. If the customers are happy, returns will reflect that and shareholders will be happy. Nothing to it.
Moynihan is proud of BofA’s board diversity, which has been industry-leading for years. With a tradition of openness to female board members, Moynihan points to Monica C. Lozano, chair, BofA’s Compensation and Benefits Committee and Chief Executive Officer at College Futures Foundation (and former chair of U.S. Hispanic Media Inc.) as a key board member who represents women and Hispanics, as well as Arnold W. Donald, president and CEO of Carnival and Lionel L. Nowell III, former senior vice president and treasurer at PepsiCo Inc., who bring an African-American perspective to the board.
Each board member brings an experience-based or academic perspective to the company that is dedicated to keeping risks within carefully set parameters, while aiming for steady, slow growth that doesn’t lose sight of its mission.
And, granted, losing sight of its mission happens. The Great Recession of December 2007 through June 2009 – with much longer implications on Wall Street and Main Street – was a decidedly inauspicious starting point for Moynihan, who joined Fleet Bank in 1993, which was then later acquired by BofA. In 2009 he became president of Consumer and Small Business Banking and was named CEO just 12 months later.
When he joined, the financial sector was still reeling from the massive subprime mortgage debacle that staggered banks like a series of tectonic migraines. Hundreds of lending and investment banks went under, including some of the nation’s biggest – WashingtonMutual, Wachovia and Bear Stearns among them. Moynihan’s job was to steady the ship, even while the af- tershocks were still in play and despite a series of public relations disasters. In total, by the time things settled down, BofA faced $76.1 billion in government fines for a variety of missteps, according to a MarketWatch report, $32.4 billion more than its closest competitor. If there was a key to BofA’s turnaround it was likely its dedication to customers. Famously, in November 2011, the bank abruptly canceled plans to add a $5 fee to debit card users in the face of customer opposition. While other banks also retreated from the idea, BofA Co-chief Operation Officer David Darnell gave the rationale for the policy change. “We have listened to our customers very closely over the last few weeks,” Darnell said in a statement.
This was a sea change for modern banking. Previously, listening to customers was not one of the most frequently mentioned attributes among the nation’s big banks, which were seen as self-serving and stogy. That perception had to change and Moynihan has been in the forefront of that branding shift. Banks reshape their communities. They loan money for you to buy a home or send your children to school. They are instrumental in small business growth and answer the call for corporations, as well. They can promote responsibility and, in fact, they can no longer ignore it. A mistake in the old days was embarrassing enough, but the nation’s judges and juries now include the Internet. A fine – any bank can survive a fine. The word to fear now is: Viral.
Sensing that shift has been BofA’s salvation, which Moynihan champions. In a March 2019 letter to shareholders, Moynihan said, “we have to grow by delivering more for our customers and clients. We have to grow by managing risk well. And, our growth must be sus- tainable. Sustainable means we have to share our success with our communities; we have to be a great place to work ... and we have to drive operational excellence.”
The battle cry is “no excuses,” but who does Moynihan want on board? That would be everyone.