JPMorgan Board Lacks Risk Savvy

None of the three directors on risk committee worked at a bank or as risk manager.

The three directors who oversee risk at JPMorgan Chase & Co. include a museum head who sat on American International Group Inc.’s governance committee in 2008, the grandson of a billionaire and the chief executive officer of a company that makes flight controls and work boots.

What the risk committee of the biggest U.S. lender lacks, and what the five next largest competitors have, are directors who worked at a bank or as financial risk managers. The only member with any Wall Street experience, James Crown, hasn’t been employed in the industry for more than 25 years.

Banking Experience

Susan Bies, who served as a Federal Reserve governor for six years and risk manager at First Horizon National Corp., sits on Bank of America Corp.’s panel. Morgan Stanley’s includes Masaaki Tanaka, CEO for the Americas at Bank of Tokyo-Mitsubishi UFJ Ltd., while Robert Joss, a former U.S. Treasury Department official who ran Westpac Banking Corp., is on Citigroup Inc.’s. Nicholas Moore, a former PricewaterhouseCoopers LLP chairman and CEO of its U.S. unit, is one of six directors on Wells Fargo & Co.’s risk committee.

Museum Donations

Futter was criticized in newspapers and industry publications after she joined AIG’s board for accepting a $36.5 million donation for the museum from a charity run by then-CEO Maurice “Hank” Greenberg.

Honeywell Loans

Cote, who joined JPMorgan’s board in 2007, has been chairman and CEO of Morris Township, New Jersey-based Honeywell since 2002. Shares of the company, which sells products from thermostats for homes to cockpit controls for airplanes, have gained 75 percent since Cote became CEO.

Very Naive’

Biggs, the former director, said the role of the risk committee is to oversee the bank, not to watch specific trades.

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