INDEPENDENT DIRECTORS ON BANK BOARDS

What Is Their Added Value?

Name: Renoe Doorga

Studentnumber: U1254935

ANR: 504880

Supervisor: Jing Li

Professor: E.P.M. Vermeulen

Table of Contents

1. INTRODUCTION 4

2. CORPORATE GOVERNANCE, BANK BOARDS AND THE FINANCIAL CRISIS 6

2.1.WHAT MAKES CORPORATE GOVERNANCE OF BANKS SO SPECIAL? 6 2.2 CORPORATE GOVERNANCE OF BANKS AND THE FINANCIAL CRISIS 7 2.3 BANK BOARDS AND THE FINANCIAL CRISIS 9 2.4. CONCLUSION 11

3. INDEPENDENT DIRECTORS 13

3.1. THE CONCEPT OF INDEPENDENT DIRECTORS 13 3.1.1 ORIGIN AND PURPOSE 13 3.1.2. THE ‘CHECK-THE-BOX’ PARADOX 14 3.2. INDEPENDENT DIRECTORS ON BANK BOARDS 15 3.2.1. INDUSTRY EXPERIENCE 16 3.2.2. INDEPENDENT DIRECTOR BUSYNESS 17 3.2.3. TENURE AND TRUE INDEPENDENCE 18 3.2.4. PROPORTION OF INDEPENDENT DIRECTORS ON BANK BOARDS 19 3.3 CONCLUSION 20

4. CURRENT INDEPENDENT DIRECTORS ON BANK BOARDS 21

4.1. PARAMETERS 21 4.2. US BANKS 22 4.2.1 CURRENT AND RELEVANT EXPERIENCE 22 4.2.2 DIRECTOR BUSYNESS 25 4.2.3. TENURE 28 4.2.4. PROPORTION 29 4.3. EUROPEAN BANKS 30 4.3.1. EXPERIENCE 30 4.3.2. DIRECTOR BUSYNESS 33 4.3.3. TENURE 35 4.3.4. PROPORTION 36 4.4. ARE THERE ANY ‘QUALIFIED’ INDEPENDENT DIRECTORS? 37 4.5. CONCLUSION 38

5. FUTURE OF INDEPENDENT DIRECTORS ON BANK BOARDS: REGULATION VERSUS HUMAN REALITY 40

5.1. REGULATION 40 5.1.1. THE UNITED STATES 40 5.2.2. EUROPE 41 5.1.3. IMPACT OF REGULATION 42 5.2. HUMAN REALITY 44 5.4. CONCLUSION 47

CONCLUSION 48

BIBLIOGRAPHY 50

EXHIBIT A: JP MORGAN & CHASE 56

EXHIBIT B: BANK OF AMERICA 62

EXHIBIT C: CITIGROUP 69

EXHIBIT D: WELLS FARGO 76

EXHIBIT E: GOLDMAN SACHS 83

EXHIBIT F: HSBC HOLDINGS PLC 89

EXHIBIT G: CREDIT AGRICOLE GROUP 95

EXHIBIT H: BNP PARIBAS 99

EXHIBIT I: BARCLAYS PLC 105

EXHIBIT J: ROYAL BANK OF SCOTLAND 109

4

1. Introduction

The recent financial crisis has led to a lot of scrutiny surrounding the banking sector. Blame

is put on the bank boards and more specifically on the independent directors sitting on these

bank boards. This scrutiny is not unfounded, since independent directors are specifically put

in place to ensure good corporate governance practices. Their independence is seen as an

asset because they, in theory at least, are able to provide an unbiased opinion in the best

interest of the company whenever matters are to be decided. In other words, a director’s

independence means that he/she can be trusted to critically examine the decisions made by

officers, as opposed to simply rubberstamping those decisions.1

However, the financal crisis and the scrutiny surrounding bank boards, led to doubt

regarding this notion of independent directors and their true value. Therefore, the big

question arising here is whether these independent directors can acutally play a valuable

role on bank boards or if they are just some nice piece of theory.

Therefore, I want to research what the added value is of independent directors who currently

serve on bank boards.

If these directors do not have the ability to add value , it may be time to lose this idea that

independent directors are a valuable asset and play a crucial role to ensure good corporate

governance practice and find some other corporate governance mechanism that may be

more valueable.

For independent directors to be valueable they should not only be focused on monitoring

management, but they should also have the ability to actively engage in banking business.

It is recognized that in the past independent directors were selected in a way that left their

qualifications or suitability only of secondary importance.2 Because of this, I choose to look

at the value of independent directors from another point of view. To determine whether

independent directors add value on the bank board, I deem it important to look at several

controversies (quilifcations) surrounding the notion of independent directors to determine

if they are suitable to be part of the bank board in question. In my thesis I will look at

whether the independent directors in question have (1) current and relevant industry

experience, (2) time and (3) acceptable tenure.

1 See § 3.1.1.

2 See § 3.1.2

5

Without current specific expertise it is almost impossible to add value and make valuable

contributions, simply because such a directors just does not know the intracacies

surrounding the banking bussines. Furthermore, expertise alone is not enough. Someone can

have all the expertise in the world but if he/she does not have the time to actually apply this

expertise, it will not be of any value. Therefore, it is important to look at the number of

commitments each independent directors has. Also, tenure can play a role. When a director

has been on the board for a long time, his independence can come into question. Lastly, I will

look at whether a high proportion of independent directors on each board adds value. This

ultimately depends on the outcome of the previously discussed controversies.

Before I discuss the above mentioned controveries in my thesis, I will first discuss the

‘special’ role banks play in our society in chapter 2. Also, in this chapter, the more specific

role of corporate governance and the financial crisis will be discussed as well as the more

specific part played by bank boards and the independent directors. This will clarify the need

for a well function corporate governance system. In Chapter 3 I will discuss the orgin and

purpose of independent directors. The current (inadequate) way independent directors are

selected will also be discussed. More importantly, the theory surrounding the controveries

of independent directors will be set out. In Chapter 4 I will look at the reality of independent

directors who currently serve on five bank boards in the US and the EU. In this chapter I will

discuss my findings related to the above mentioned controversies. In Chapter 5 I will

disucss the regulation measures taken with regard to the independent directors and

whether they will actually have the impact they are designed for. Also, the concept of human

reality will be disucced because I believe this is an aspect that should not be overlooked.

And, finally, I will answer my research question in the conclusion.

6

2. Corporate Governance, Bank Boards and the Financial Crisis In this chapter I will discuss the general role that corporate governance plays within banks

and the financial crisis. To clarify the importance of a well functioning corporate governance

system within these financial entities, I will first (shortly) discuss why banks are so ‘special’

within our economy (§ 2.1.). Second, to shed some light on the academic debate whether

corporate governance did or did not play a role in the financial crisis, the more general role

of corporate governance in the financial crisis will be discussed. (§ 2.2.). Finally, I will

discuss the role of the board of directors more extensively with an emphasis on the specific

role of the independent directors (§ 2.3.)

In § 2.4. I will conclude.

2.1.What makes Corporate Governance of Banks so special?

Since the financial crisis, the insight that banks have special corporate governance problems

has gained momentum rather quickly.3 The relevance of banks in the economic system and

the nature of the banking business make the problems involved in their corporate

governance highly specific, as are the mechanisms available to deal with these problems.4 It

is this vary nature of the banking business that weakens the traditonal corporate

governance institutions of board and shareholder oversight.5

Banks are a key element in the payment system and play a major role in the functioning of

the economic system. They are also highly leveraged firms, due mainly to deposits taken

from customers. For all these reasons, banks are subject to more intense regulation than

other firms, as they are responsible for safeguarding depositors’ rights, guaranteeing the

stability of the payment system, and reducing systemic risk.6 Their stakeholders vary more

widely than those of other private companies, including not only shareholders but also, and

perhaps more significantly, depositors and the general public. This is also recognized by the

Basel Princples that state: ‘from a banking perspective, corporate governance involves the

allocation of authority and responsibilities (..) including how they (..) protect the interests of

depositors, meet shareholder obligations and take into account the interests of other

recognized stakeholders’.7

Banks deliberately take and intermediate financial risk to generate revenue and serve their

clients, leading to an assymetry of information, less transparency, and a greater ability to

obscure existing and developing problems. Because banks have the ability to take on risk

very quikcly, in a way that is not immediately visible to directors or outside investors, weak

3 K.J. Hopt, Better Governance of Financial Institutions, Law Working Paper No. 207/2013, ECGI, April 2013, p.c 4 P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008 5 M. Becht, P. Boltin and A. Roell, Why Bank Governance Is Different, Oxford Review of Economic Policy, Volume 27, Number 5, 2011, p. 438 6 P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008

7 M. Becht, P. Boltin and A. Roell, Why Bank Governance Is Different, Oxford Review of Economic Policy, Volume 27, Number 5, 2011, p. 458

7

internal controls can rapidly cause instability. 8 As a result sound (internal) governance for

banks is essential,9 since this is the necessary condition to safeguard both the health of

financial intermediaries and the business and economic development of a country.10

2.2 Corporate Governance of Banks and the Financial Crisis

Good corporate governance has been a major component of international financial

standards and is seen as essential to the stability and integrity of financial systems.11

After the beginning of the financial turbulences in summer 2007, the issue of banks’

corporate governance, with the notable exception of remuneration, went out of focus for

some time. In 2008 numerous reports, documents and statements dealing with the causes of

the financial crisis did not even mention the corporate governance of banks. But, during the

second year of the financial crisis, the issue of banks’ corporate governance has begun to

resurface with a vengeance.12 The financial crisis has focused a great deal of scrunity on

failures in corporate governance, in particular lax board oversight or risk management and

executive compensation packages that encouraged excessive risk taking.13

The global financial crisis has intensified the reflection on the corporate governance of

banks both in the context of academic discussions and in policymaking. While there are a

multitude of factors that contributed to the financial crisis, some studies suggest that

weaknesses of corporate governance may be largely responsible for the excessive risk taking

by bankers, the systemic fragility of banks, and the financial instability stemming from it.14

In his report on corporate governance and the latest financial crisis, Kirkpatrick confirmed

that the crisis was attributed to failures and weaknesses in corporate governance

arrangements15. In this report it is stated that:

“(..) the financial crisis can be to an important extent attributed to failures and weaknesses in

corporate governance arrangements. When they (corporate governance arrangements) were

put to a test, corporate governance routines did not serve their purpose to safeguard against

excessive risk taking in a number of financial services companies.”16

This view is also shared by several scholars. Tarraf points out that, like Kirkpatrick, sponsors

of the Shareholder Bill of Rights Act of 2009 argued that a widespread failure of corporate

8 M. Becht, P. Boltin and A. Roell, Why Bank Governance Is Different, Oxford Review of Economic Policy, Volume 27, Number 5, 2011, p. 438 and

The World Bank Group, Bank Governance: Lessons from the financial crisis, March 2010, p. 2 9 The World Bank Group, Bank Governance: Lessons from the financial crisis, March 2010, p. 2

10 P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008 11 The World Bank Group, Bank Governance: Lessons from the financial crisis, March 2010, p. 2 12 P.O. Mulbert, Corporate Governance of Banks after the financial crisis – Theory, Evidence, Reforms, Working paper No. 151/2010, ECGI, 2010, p. 7 13 H. Tarrif, , Running head: Corporate Governance and the Recent Financial Crisis, Lawrence Technological University, 2010, p. 6 14 E.M. Dorenbos and A.M. Pacces, Coporate Governance of Banks: Is More Board Independence the Solution, Dovenschmid Quaterly, 2013, p. 2 15 H. Tarrif, Running head: Corporate Governance and the Recent Financial Crisis, Lawrence Technological University, 2010, p. 6-10 and G. Kirkpatrick, The Corporate Governance Lessons from the Financial Crisis, OECD Publication, 2009, p. 2 16

G. Kirkpatrick, The Corporate Governance Lessons from the Financial Crisis, OECD Publication, 2009, p. 2

8

governance was among the central causes of the financial and economic crises.17 Similarly,

Fetisov cited drastic detoriation in corporate governance quality as a main cause of the

global financial crisis. He stated that “During a period of strong global growth, growing

capital flows, and prolonged stability earlier this decade, market particpants sought higher

yields without an adequate appreciation of the risks and failed to exercise proper due

dillegence”.18

Furthermore, Yeoh presented evidence of flawed corporate governance practices adopted at

some financial institutions that failed in relation to the crisis. The analysis reveals that, in

case of Bears Stearns and Lehman Brothers, bad corporate governance practices were

evident in the company.19

But, on the other hand, there are scholars who argue that corporate governance did not play

a central role in the recent financial crisis. Moslein, for example, argues that the most

important reports, documents and declarations barely mention corporate governance and

that the crisis is rooted in the instability of markets. But noted that reform proposals on

remuneration and risk management were more specifically related to corporate governance.

Also, Moslein further explained that when the OECD mentioned corporate governance as a

cause, it did not propose any substantive revision of the current corporate governance

principles, although it called for a better implementation and enforcement mechanisms.20

Anwar was also critical of the argument that the financial crisis is a corporate governance

problem, labeling it a ‘layman perspective to acknowledge the crisis only as a corporate

governance problem’.21 Mulbert argues that even egregious cases of unsound corporate

governance practices do not support the claim that major corporate governance failures

were one imporant or even the most important cause for the crisis, and, more generally,

neither will any number of anecdotal evidence serve as proof. Mulbert goes on by stating

that proof of widespread corporate governance failures at banks can only come from

emperical studies and that systemic emperical studies, so far, do not provide strong support

for the corporate governance failure hypothesis.22

However, this is not to say that internal bank governance failures were irrelevant. In

conformity with the Basel Committee on Banking Supervision, the relevant failures were in

risk management and internal control, in the profile and practice of directors and senior

17 H. Tarrif, Running head: Corporate Governance and the Recent Financial Crisis, Lawrence Technological University, 2010, p. 6 18

G. Fetisov, Measures to overcome the global financial crisis and establish a stable financial and economic system, Problems of Economic Transition , Volume 52, Issue 5, September 2009, p. 25 and H. Tarrif, Running head: Corporate Governance and the Recent Financial Crisis, Lawrence Technological University, 2010, p. 6 19 P. Yeoh, Causes of the Global Financial Crisis: Learning From the competing insights, International Journal of Disclosure and Governance, 2009, p. 42-69 20 F. Moslein, Contract Governance Within Corporate Governance: A lesson from the global financial crisis, 2009, p. 7-8 21 G.M.J. Anwar, The U.S. Financial Crisis from 2007: Are there Regulatory and Gocvernance Failure?, Journal of Business and Policy Research, Volume 4, Number 1, 2009, p. 27 22

P.O. Mulbert, Corporate Governance of Banks after the financial crisis – Theory, Evidence, Reforms, Working paper No. 151/2010, ECGI, 2010, p. 27

9

management, in complex and opaque corporate and bank structures, in perverse incentives

by the remuneration strcutures then in place and in insufficient disclosure and transparency.

The European Banking Authority concedes that these bank governance failures were not a

direct trigger for the financial crisis, but considers these practices to be ‘a key contributory

factor’.23 Similarly, the European Commission states that ‘although corporate governance did

not directly cause the crisis, the lack of effective control mechanisms contributed significantly

to exessive risk taking on the part of financial institutions’.24

Winter, on the other hand, takes a more middle ground view on this subject and does not

deny nor sees corporate governance as a major factor in the financial crisis. He states that

failing corporate governance was probably not one of the decisive factors explaining the

financial crisis, but good corporate governance would have helped to mitigate some of its

effects and where it was in place it may actually have insulated some financial institutions

against the worst consequences of the crisis. Good governance can help to avoid that a

company becomes a blind animal in a herd running to destruction, by ensuring there is

enough reflective space when it matters to consider the company’s direction, its succes and

its vulnerability.25

2.3 Bank Boards and the Financial Crisis

When the 2008 financial crisis broke out, corporate boards at rescued institutions took

(partly) the blame of the collapse.26 The role of boards as a mechanism for corporate

governance of banks takes on a special relevance in a framework of limited competition,

intense regulation and higher information assymetries due to the complexity of the banking

business.27 In a later statement, the EBA holds ‘weak governance arrangements, in particular

inadequate oversight by and challenge from the supervisory function of the management body’

to be among the ‘underlying causes of the financial crisis’.28

There are different views with regard to the question what this role of the bank boards

exactly is. In general, these views come down to the idea that a valueable board of directors

is a key mechanism to monitor managers’ behavior and act as advisors and function to

complement managers by anticipating blind spots and offering advice. It is furthermore

recognized that effective governance practices call for a board that is actively engaged

(meaning that they provide (effective) oversight, insight, advice and support). And, boards

must rise above the technicalities of risk management and ask the big questions going

23

European Banking Authority, EBA Guidelines on Internal Governance (GL 44), 27 September 2011, p. 51 and K.J. Hopt, Better Governance of Financial Institutions, Law Working Paper No. 207/2013, ECGI, 2013, p. 50 24 European Commission, Green Paper: Corporate Governance in Financial Institutions and Remuneration Policies, COM(2010) 285 Final, Brussels, 2010, p. 2 25

J. Winter, The Financial Crisis: Does Good Corporate Governance Matter and How to Achieve it?, DSF Policy Paper, No. 14, August 2011, p. 2 and 8 26 R.C. Pozen, The case for professional boards, Harvard Business Review 15, 2010 27 P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008 28

European Banking Authority, Guidelines on the assessment of the suitability of members of the management body and key function holders, 22 November 2012

10

forward.29 A valueable board is not only valuebale for its shareholders and stakeholders, but

also for the development of an economic system.30

So, it is not ‘just’ an oversight role that these boards, and with that the directors on the

board, need to fullfill. They need to be able to actually contribute their knowledge in the

banks’ strategy.

Eventhough the role of the boards is quite clear, the question remaning is: where was this

‘valueable’ board in/during the financial crisis?

The big(gest) issue with bank boards (and with that the directors on the board) is that they

are seen as being ‘a sleep at the switch’ during the recent financial crisis.31 This, in turn,

raised questions about the effectiveness of board oversight at some large banks, including

whether or not boards were compromised of a sufficient number of directors with relevant

financial industry experience who could ask the right questions and appropriately challenge

management in key areas such as risk management and strategy.32 Board of directors were

expected to take a leading role in overseeing risk management structures and policies and

implement current corporate governance procedures and guidelines. It is important for

directors to take steps to be well informed of their companies’ risk profile, to discuss and

evaluate risk scenarios and to satisfy themselves on an ongoing basis as to the adequacy of

managements efforts to address material risks.33 The board of directors seem to have failed

in this role during the financial crisis.34 A number of academic papers seek to confirm the

account that boards not only failed, but failed in a away that contributed to or exacerbated

the financial crisis and the resulting losses at banks and in the real economy.35 Similarly,

other scholars have noted that boards made poor decisions with respect to compensation,

operations and investment at financial institutions.36

Adams, on the other hand, argues that boards of financial firms clearly share some

responsibility for the crisis because it was their duty to oversee managers who led their

banks to the brink of failure. However, he suggest that it is important to keep several facts in

mind when considering potential policy changes. First, while the boards of financial firms

29 See for these different views the following reports/articles: P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008, Nestor Advisors, Bank Boards and The Financial Crisis, Nestor Advisors Publication, 2009, p. 6, and J.F. Castello. S.S. Lightle and B. Baker, The Role of Boards of Directors in the Financial Crisis, The CPA Journal, September 2011, p. 54 30 P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008 31

N.A. O’Hara, Asleep At the Switch? Corporate Boards’ Culpability in the 2008 Financial Crisis, The Journal of the New York Society of Security Analysts, 2009 32 Moody’s Investors Service, Special Comment: Bank Boards in the Aftermath of the Financial Crisis, March 2010, p. 1 33 H. Tariff, The role of corporate governance in the events leading up to the global financial crisis: analysis of agressive risk taking, Global Journal of Business Research, Vol. 5, No.4, 2011, p. 102-103 34 Nestor Advisors, Bank Boards and The Financial Crisis, Nestor Advisors Publication, 2009, p. 6 35 W.G. Ringe, Independent Directors: After the Crisis, Legal Research Paper Series, No. 72/2013, University of Oxford, July 2013, p. 3 and L.L. Dallas, Short-termisms, the Financial Crisis and Corporate Governance, Legal Studies Research Paper, No. 12-078, University of San Diego, School of Law, February 2012, p. 351 36

W.G. Ringe, Independent Directors: After the Crisis, Legal Research Paper Series, No. 72/2013, University of Oxford, July 2013, p. 3-4

11

should have better information than outsiders, directors are generally not experts in the

economy. For this reason it is argued that it seems unreasonable to expect that they should

have been better able to predict the problems financial firms would face than academic,

regulators and financial analysts. Second, it it still not clear whether regulators substitute or

complement board-level governance. It is not hard to imagine that a bank director does not

understand all risk implications of particular transactions but agrees to them because he

assumes that regulators would identify potential problems.37

While I do understand what the author is trying to say when making this point, I do not

agree. It is too easy to shift blame to others, like the regulator, when it was the board that

failed to do the job they were hired for. It should be their job to know what is going on

within their own company, and therfore it is their own responsibility to see what others

can’t. Why else is their a board if they are just going to rely on or hope that somebody else is

going to tell them that something is going wrong?

The criticism on the board of directors has lead an even deeper criticism on independent

directors. Serious concerns have been raised regarding the very relevance of the institution

of independent directors or the value of them on the bank boards. While there was

compliance with SOX (the Sarbanes-Oxley Act), the institution of independent directors still

seems to have failed in the financial crisis. While some focus on the role of independent

directors in improving corporate performance some go further to explain their irrelevance

from a corporate governance point of view while other are even seriously concerned about

the very commitment of independent directors.38 Independent directors play a prominent

role in this discussion, since there were already independent directors on the board of banks

when the financial crisis hit. These directors are typically associated with less risk taking,

and are put on the board because their ‘independence’ might actually be of value.

But, despite these independent directors the financial crisis still hit us worldwide and led to

huge implications. The need and value of such directors therefore comes into question. This

subject will be extensively discussed in chapters 3 and 4.

2.4. Conclusion

Banks play a huge role within our economy, as is shown by the recent financial crisis. These

financial instutions do not only have to worry about their shareholders, but about all the

stakeholders, especially the public. Therefore, the importance for a well functioning

corporate governance system and a board becomes that much more important.

Many may argue about the big, small or non-existent part corporate governance played in

the financial crisis. Despite all these different views about the role of corporate governance

37 R. Adams, Governance and the Financial Crisis, Finance Working Paper No. 248/2009, ECGI, April 2009, p. 14-15 38

S.K.T. Narayanan, Is the Institution of Independent Directors Irrelevat?: A Critical Inquiry Into Why The Institution Has Failed To Lead To Better Corporate Governance, DC School of Management and Technology, 2012, p. 1

12

in the financial crisis, I believe that, based on the above mentioned academic debate,

corporate governance was a contributing factor in the financial crisis. It may not have been

the only cause of the crisis, but that does not mean that better corporate governance could

not have mitigated some of the huge implications this crisis brought on most people

worldwide.

A more prominent role in all of this was played by the board of directors. When it comes to

the board of directors, they are seen as being responsible for the recent financial crisis or at

least played a big role in letting it get so out of hand. It was their job to know what was

going on in their own company, and now they seem to have failed in their job. But, an even

bigger part of this blame is put on the independent directors. Their independence should

have been a valueable asset on the board, because they are supposed to operate

independently from other in the bank. A lot of hope is therefore put on these directors to get

to the bottom of a banks’ issues. However, failing this special role truly begs the question

about their added value on bank boards.

The more specific function and controversies surrounding independent directors will be

discussed in the next chapter.

13

3. Independent directors To understand the role and importance of independent directors it is important to go back to

the roots of this concept. For this reason I will discuss when and, more importantly, why the

concept of independent directors was created and what the purpose is of this concept

(§3.1.1) Also, the way independent directors are currently selected will be discussed and

the need for a different approach to determine the value of current independent directors on

bank boards (§ 3.1.2). To determine the value, the most common controversies surrounding

independent directors on bank boards will be dicussed as well as related (available)

emperical evidence (§3.2.) This information will be used to determine when independent

directors can be preceived as being a valueable asset on the bank boards in the conclusion

(§3.3).

3.1. The concept of independent directors

3.1.1 Origin and Purpose

The concept of board independence orginated in the United States. Although the idea has

always been there, its resurgence into becoming a dominant requirement of good corporate

governance is a direct consequence of corporate malfeasance involving directors who are

thought not to be independent enough to care about the wellbeing of the firm, like in the

case of Enron, Worldcom and so on.39 These collapses led to an enormous amount of

commentary concerning the causes, what went wrong and how to fix it. Although many

companies that collapse(d) have effective corporate governance structures in place, the

close relationship between their board and their advisers is often perceived as a problem

that needs to be addressed. ‘Independence’ of directors is considered to be a priority.40 In a

similar way, the recent financial crisis re-opened the debate around corporate governance

and risk management. Again, independent directors were partly blamed for the major

failures of ‘checks and balances’.41

Traditionally, the principle of director independence has been justified by the proper role of

boards: to provide effective and unbiased monitoring. As one of the key roles of the board is

to monitor the executive management, this task can be carried out best if those who monitor

are independent of those who are supervised. At the root, therefore, is a conflict of interest

dimension: independence is seen as a coarse pre-condition for ensuring ex-ante that board

39

R.C. Iwu-Egwuonwu, Some Emperical Literature Evidence On The Effects Of Independent Directors On Firm Performance, Journal of Economics and International Finance, Vol. 2(9), September 2010, p. 196 40 S.K.T. Narayanan, Is the Institution of Independent Directors Irrelevat?: A Critical Inquiry Into Why The Institution Has Failed To Lead To Better Corporat Governance, DC School of Management and Technology, 2012, p. 1 and J.M. Convill and M. Bagaric, Why all Directors Should be Shareholders in the Company: The Case Against Independence, Bond Law Review, Vol. 16 (2004), Iss. 2, Art, 2, 2004, p. 40-41 41

W.G. Ringe, Independent Directors: After the Crisis, Legal Research Paper Series, No. 72/2013, University of Oxford, July 2013, p. 2-3

14

decisions are not tainted by arbitrary considerations.42 The appointment of independent

directors is based on the hypothesis that directors, who are totally unconnected with the

company of the day-to-day management or its promotors, will be in a better position to

improve transparency and accountability and provide an unbiased opinion in the best

interest of the company whenever matters are to be decided. In other words, a director’s

independence means that he/she can be trusted to critically examine the decisions made by

officers, as opposed to simply rubberstamping those decisions.43 Independence has become

a crucial issue in determing the composition of any board because a person appointed as the

independent director should be able to excercise his/her judgement without being inhibited

or prejudiced by the demands of any dominant group in the company or in the

management.44

This notion of indepence should furthermore contribute to ‘good corporate governance’,

because, ideally these individuals can ask the right questions and be better equipped to

challenge management.45 As a result, independent directors have emerged as the

cornerstones of the worldwide corporate governance movement. Their increased presence

in the boardroom has been hailed as an effective deterrent to fraud and mismanagement,

inefficient use of resources, inequality and unaccountability of decisions; and as a harbinger

for striking the right balance between individual, economic and social interests.46

3.1.2. The ‘Check-the-Box’ Paradox

There is not one clear answer when it comes to the question what the meaning of

‘independence’ is. The definition of independence in most corporate governance codes is

exhaustive. To be considered independent a director must have no relationship with any

firm in the up-stream or down-stream added-value chains, must not have previously been an

employee of the company, nor be a nominee for a shareholder or any other supplier of

finance to the company. Indeed, the definition of independence is so strict that an

independent director who has served on the board for a long period is often assumed to

have become close to the company and is no longer considered independent47 (this will be

discussed in §3.2.3). Existing board studies as well as current governance codes classify

directors as dependent if they are affiliated, i.e. have past or present business or family

relatonships to the firm 48

Herein lays the paradox. The more independent directors are, the less they are likely to

know about the company, its business and its industry. Conversely, the more directors know

42

R. Nolan, ‘The Legal Control of Directors’ Conflict of Interest in the United Kingdom: Non-Executive Directors Following the Higgs Report in J. Armour and J. McCahery After Enron: Improving Corporate Law and Modernising Securities Regulation in Europe and the US, Oxford, Hart Publishing, 2006, p. 367 43 L.M. Fairfax, The Uneasy Case of Inside Directors, Iowa Law Review, Volume 96, 2010, p. 139 44

Dr. B.S. Ronald, Independent Directors in the backdrop of Corporate Failurs, Simbiosis Law School, Pune, May 2013, p. 8-9 45 Moody’s Investors Service, Special Comment: Bank Boards in the Aftermath of the Financial Crisis, March 2010, p. 5 46 P. Mittal, The Role of Independent Directors in Corporate Governance, April-June 2011, p. 1 47 B. Tricker, Corporate Governance: Principles, Policies and Practices, Second Edition, Oxford University Press, p. 24 48

O. Bohren and R.O. Strom, Governance and Politics; Regulating Independence and Diversity in the Board Room, Journal of Business Finance and Accounting, 37(9) & 10, November/December 2010, p. 1284

15

about the company’s business, organization, strategies, markets, competitors, and

technologies, the less independent they become. Yet such people are exactly what top

management needs to contribute to its strategy, policy making and enterprise risk

assessment.49

Independence is often decided based on a ‘check-the-box’ system, however a system of

corporate ‘box-ticking’ is not the answer. This was also recognized by Kirkpatrick in his

report where he states: ‘(..) the question if independent direcors might have been pushed too

far in favour of negative lists and this might have led to qualifications or suitability being only

of secondary importance. (..) The issue is not just independence and objectivity but also

capabilities.’.

Therefore, determining the value of independent directors should not take place in this

current ‘box-ticking’ manner. To determine the true value of independent directors, it is

important to look at the fact if they are actually suitable for the job. Meaning that their value

does not come from the fact if they check all the above mentioned boxes (negative lists), but

if they have the needed qualifications/capabilties to add value on a bank board. These

qualifications will be discussed now, in § 3.2.

3.2. Independent directors on bank boards

As shortly mentioned in the previous chapter, independent directors took a special place in

the financial crisis. Their existence on bank boards have led many to question whether they

are of any value. A lot of emphasis nowadays is put solely on the montoring duties of

independent directors, but this not the only task an independent director should have .The

key language spoken in board rooms in one of gross marging, operational expenses, EBITDA,

underlying growth, leverage ratio, enhanced control environment, KPI’s, impariment, etc.

This focus and language obscure another primary task for independent directors, and that is

to provide strategic direction to the company. If independent directors are to play a

valueable role in setting, calibrating and changing the strategic direction of the company,

including addressing key strategic weaknesses and risks, this requires that independent

directors are more engaged in the content of the business of the bank. The monitoring role

typically does not take independent directors to the heart of the business itself and does not

allow them to contribute to the core issues that makes a business succesful or not.50

To come to a conclusion about their value, it is important to discuss several controversies

related to this notion of independent directors. Controversies regarding independent

directors on bank boards during the financial crisis is mostly focused on qualifications

49 B. Tricker, Corporate Governance: Principles, Policies and Practices, Second Edition, Oxford University Press, p. 467 50

J. Winter, The Financial Crisis: Does Good Corporate Governance Matter and How to Achieve it?, DSF Policy Paper, No. 14, August 2011, p. 12

16

related to their industry experience, available time, tenure (in relation to ‘true’

independence) and their proportion on the board. I will discuss these controversies

seperately in this section as well as the (available) emperical studies regarding each point of

criticism.

3.2.1. Industry Experience

One of the major criticisms levied at many bank boards is that they lacked a significant

contigent of independent directors with extensive and first-hand financial industry

experience or that this experience was dominated by insiders or former insiders (i.e. former

senior executives of banks).51 Independent directors who lack a deep understanding of a

firm’s operations may be another disadvantage in meeting their fiduciary duties. Such

directors may become overly dependent upon the representations of management for the

important information necessary to evaluate important strategic initiatives, risks and

decisions. It can be difficult for the indenpendent director with no or little industry

experience to raise important issues, questions or concerns. Lacking the necessary

knowledge they might find it awkward or embarrasing to explore issues that are complex or

not easily understood. In these cases, a theoretically independent director can quickly

become very dependent, thus compromising the board’s oversight function rather than

enhancing it.52 On the other hand, independent directors with prior experience in the firm’s

industry may be socially connected with or sympathetic to the firm’s management, thus

impairing their monitoring incentives.53

Naturally, board members cannot be expected to know as much about the business as a

member of management. However, if board members are to carry out their responsibility to

challenge management, they must have the expertise necessary to grasp the complexity of

the business and thus the associated risks. The question is however what constitutes as

approporate expertise. Some argue that the non-financial experts are the individuals that

may ask the important high-level strategic questions, while the more technical members are

focused on the details.54 In this respect it is argued that every board needs a generalist to

provide a broad perpective on the company’s strategy, but the other members should be

experts in the company’s main line of business.55 But, when it comes to expertise, it is

important to keep in mind if their expertise is current. Someone who worked for a bank 30

years ago might not know all the intricacies of complex financial instruments.56

51 Moody’s Investors Service, Special Comment: Bank Boards in the Aftermath of the Financial Crisis, March 2010, p. 5 52 J.F. Castello. S.S. Lightle and B. Baker, The Role of Boards of Directors in the Financial Crisis, The CPA Journal, September 2011, p. 55 53 C. Wang, F. Xie and M. Zhu, Industry Expertise of Independent Directors and Board Monitoring, 6 March, 2013 54

H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 11 55 R.C. Pozen, The case for professional boards, Harvard Business Review 15, 2010 and R.W. Masulis, C. Ruzzier, S. Xiao and S. Zhao, Do Independent Directors Matter?, March 2012, p. 56

J. Prager, The Financial Crisis of 2007/8: Misaligned incentives, bank mismanagement, and troubling policy implications, Department of Economics, New York University, 2012, p. 36-37

17

Emperical evidence shows that independent directors with industry experience boost firm

performance by improving major corporate decisions. Such independent directors have both

the incentives and industry-specific knowledge to more effectively minitor and advise.57 But

there are some studies that show the level of financial expertise among independent

directors is positively related to risk taking before and during the financial crisis58, and that

the boards of failing banks had more independent directors with industry experience on the

board compared to the boards of surviving banks.59

Expertise, however, is not enough to ensure that the board will engage with and challenge

management. Arguably board members must invest sufficient time and energy to

understand the firm60, as will be discussed now in § 3.2.2.

3.2.2. Independent Director Busyness

It is not unusual for independent directors to hold positions at more than one board.

However, multiple directorships can, logically, severly limit the time independent directors

spend doing their job on the bank board. And this time is very important, seen as what can

happen when certain risks are being overlooked or not enough time is spend to examine

what is truly going on within a bank. Too little time can, once again, contribute to a future

crisis because independent directors are too busy to actually monitor management and

actively engage. Chancellor William Alleen of the Delaware Court of Chancery explains this

predicement very well by saying “effective monitoring requires a commitment of time and

resources (..) The demands of the position, if properly understood, are inconsistent in my

opinion, with service on an impressively long list of boards”.61

However, there are studies showing that multiple directorships can actually have a positive

effect on the ability of an independent director to perform their job. It has been argued that

sitting on multiple boards provides an incentive for diligent monitoring since the

independent directors would have the knowledge, expertise and stronger incentive to

actively engage and monitor the actions of management.62 In that respect, holding multiple

directorships can help directors make the best desicions based on knowledge of the best

board practices gained from other firms.63 Banks also hold that their firms benefit from the

input of individuals that understand global business trends and can speak to some of the

57

R.W. Masulis, C. Ruzzier, S. Xiao and S. Zhao, Do Independent Directors Matter?, March 2012, p. 27 58 B. Minton, J.P.A. Taillard and R. Williamson, Do Independence and Financial Expertise of the Board matter for Risk Taking and Peformance?, Charles. A. Dice Center for Research in Financial Economics, Fisher Collefe of Business, June 2011, p. 35 59 J.F. Castellano, S.S. Lightle and B. Baker, The Role of Board of Directors in the Financial Crisis, the CPA Journal, September 2011, p. 54 60 H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 11-12 61

S.P. Ferris, M. Jagannathan and A.C. Pritchard, Too Busy To Mind the Business? Monitoring by Directors With Multiple Board Appointments, John. M. Olin Center for Law & Economics, University of Michigan, January 2002, p. 1 and W. Allen, Redefining the role of outside directors in an age of global competition, Sppech to the Ray Garret, Jr, Corporate and Securities Law Institute, Northwestern University, April 30, 1992. 62 H.A. Hashim and M.S.A. Rahman, Multiple Board Appointments: Are Directors Effective?, International Journal of Business and Social Science, Vol. 2, No. 16, p.137 63

R.M. Haniffa and T.E. Cooke, Culture, Corporate Governance and disclosure in Malaysian corporations, ABACUS, 38(3), p. 317-349

18

geopolitcal issues these multinational firms face. The most desirable individuals are

therefore by definition overcommited, but crucial nevertheless.64

But, on the other hand, there is evidence that boards dominated by busy outside directors,

i.e. directors holding three or more than three directorships, contribute to weaker corporate

governance.65 Directors holding a larger number of outside board seats may be

overcommitted. These directors may be stretched to the point where they are unable to

effectively do their job.66 Similarly, the National Association of Corporate Directors

guidelines (NACD) recommend corporate executives and CEOs should not hold more than

three outside directorships.67

3.2.3. Tenure and true independence

It is difficult to measure whether a independent director is truly independent. A director’s

tenure on a firm’s board is a factor that can influence a director’s independence.68 During the

financial crisis it has been recognized that boards were less independent than they

appeared. While many of the independent directors met the technical requirements for

being considered independent, most had been in place for a long time.69 Research in the US

indicated that the weighted average director tenure at the end of 2007 for financial

instititutions that dissapeared was 11.2 years but 9.2 years for those that survived the first

phase of the crisis.70

Research provides two alternative views on how tenure may affect director’s ability to

perform their job. It can be argued that longer tenure increases an individual’s commitment

towards the firm and acummulates greater experience and knowledge about the firm and its

business evironment. From this point of view independent directors may be able to perform

their monitoring responsibilities better. Some highly experienced board members believe

their long-term ties with a company make them tougher monitors of management – partly

because they understand its prior missteps better than newer directors do.71

But, an alternative view is that independent directors are less likely to discipline

management when they develop friendship or social ties with management. In that respect

longer tenure develops a close social nexus and a strong affiliation between management

and independent directors which can affect the monitoring function of an independent

64 H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 12 65

E.M. Fich and A. Shivdasani, Are Busy Boards Effective Monitors?, Finance Working Paper No. 55/2004, ECGI, October 2004, p. 2-3 and H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 9-10 66 E.M. Fich and A. Shivdasani, Are Busy Boards Effective Monitors?, The Journal of Finance, Vol. LXI, No.2, April 2006, p.721 67 P. Jiraporn, M. Singh an C.I. Lee, Analyzing Ineffective Corporate Governance: Director Busyness and Board Commitee Memberships, April 28, 2008, p. 2 68

A. Tourani-Rad and C. Ingly, Handbook on Emerging Issues In Corpoate Governance, World Scientific Publishing CO. Pte. Ltd, 2011, p. 124 69 The World Bank Group, Bank Governance: Lessons from the financial crisis, March 2010, p. 2 and Thomson Reuters, Rebuilding Bank Governernance After The Financial Crisis: Best Practices, October 2012, p. 6 70 OECD, Corporate Governance and the Financial Crisis: Key Findings and Main Messages, OECD Publishing, June 2009, p. 46 71

A. Tourani-Rad and C. Ingly, Handbook on Emerging Issues In Corpoate Governance, World Scientific Publishing CO. Pte. Ltd, 2011, p. 124 and J.S. Lublin, The 40-year Club: America’s Longest Serving Directors, Wall Street Journal, July 16, 2013

19

director because he/she is no longer objective.72 This particular view is recognized by

several countries and institutions, however determining an ‘appropriate’ tenure limit is, is

very debatble. The NACD for example suggest a maximum 10 to 15 of years of board service

in order to obtain fresh ideas and critical oversight which only new directors can bring to

the board.73 India introduced the Companies Bill 2012 that deals with this ‘problem’ by

proposing a tenure limit on independence to two terms of five years each.74 Furthermore, in

the UK, the code sets a limit of 9 years if the director is considered to be independent while

in the Netherlands and France a 12 year limit is set.75

However, it is very controversial to set a tenure limit, since anyone who has an independent

mind will not compromise even as years pile on.76

3.2.4. Proportion of independent directors on bank boards

There is a ‘conventional wisdom’ surrounding the proportion of independent directors on

bank boards stating that a mandatory increase in board independence would lead to better

corporate governance, which in turn would lead to better corporate governance decisions

and firm performance.77 It is now a preponderant view of regulatory authorities of business

firms across corporate sovereignties that the ‘virtue’ of majority independent directors

should guide appointments or selection of boards members. Consequently, there is a

growing trend towards appointing majority or supermajority independent boards.78 A high

standard of director independence is merited by the view that disspassionate, objective

debate at the board level is integral to strong oversight of management.79 To avoid or lessen

the conflict of interest among stakeholders and fulfill the functions of monitoring and

advising in an efficient manner, these directors should be a majority on the board.80 Those

who consider the board of directors an important element of corporate governance argue

that boards dominated by independent directors are in a better position to monitor and

control managers.81 Furthermore, it is argued that corporate decision making will be

improved if a majority of the board can be structured so that a particular motivation—that

of pleasing management—is absent.82

72

A. Tourani-Rad and C. Ingly, Handbook on Emerging Issues In Corpoate Governance, World Scientific Publishing CO. Pte. Ltd, 2011, p. 124 73

A. Tourani-Rad and C. Ingly, Handbook on Emerging Issues In Corpoate Governance, World Scientific Publishing CO. Pte. Ltd, 2011, p. 124 74 An independent director shall hold office for a term up to five consecutive years on the Board of a company, but shall be eligible for reappointment on passing of a special resolution by the company. No independent director shall hold office for more than two consecutive terms, but such independent director shall be eligible for appointment after the expiration of three years of ceasing to become an independent director, provided that an independent director shall not, during the said period of three years, be appointed in or be associated with the company in any other capacity, either directly or indirectly.” See Stakeholder Empowerment Services, Frontiers in Corporate Governance: Companies Bill 2012, 2012, p. 9 and see also clause 149 (9) and (10) Companies Bill 2012: 75 OECD, Corporate Governance and the Financial Crisis: Key Findings and Main Messages, OECD Publishing, June 2009, p. 46-47 76 B. Shrivastava, Are long-serving independent directors truly independent?, Live Mint & The Wall Street Journal, September 23, 2012 77 R.W. Masulis, C. Ruzzier, S. Xiao and S. Zhao, Do Independent Directors Matter?, March 2012, p. 2 78

R.C. Iwu-Egwuonwu, Some Emperical Literature Evidence On The Effects Of Independent Directors On Firm Performance, Journal of Economics and International Finance, Vol. 2(9), September 2010, p. 191-192 79 Moody’s Investors Service, Special Comment: Bank Boards in the Aftermath of the Financial Crisis, March 2010, p. 6 80 P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008 81

J.R. Booth, M.M. Cornett and H. Tehranian, Board of directors, ownership and regulation, Journal of Banking and Finance 26, 2002, p. 1975 82

D.C. Clarke, Three Concepts of the Independent Director, George Washington Delaware Journal of Corpoate Law, Vol. 32, 2007, p. 88

20

However, it is also argued that a relatively higher proportion of independent directors does

not affect firm performance in either way. An optimum combination of executive and non-

executive directors is seen as more adequate than excessively independent boards.83

3.3 Conclusion

Deciding whether an independent director is qualified based on a check-the-box system

that states their (non)affilition with the firm is, in my opinion, inadequate. Such a system

does not take their true value into account. To determine whether independent directors

are actually valueable on bank boards it is important to look at controversies that targets

their qualifactions, i.e. whether they have the experience, time and ‘appropriate’ tenure (in

relation to true independence). Also the proportion of independent directors is very relevant

in this discussion.

Relevant and current industry experience is an important aspect for an independent director.

Not only to avoid being fooled by management but also to give valueable input. But, not

every independent director needs to have this experience , but a balance is needed between

independent directors with and without specific industry expertise.

However, relevant and current experience is not enough. Independent directors need

time to put that knowledge to some use. Studies showing that serving on more boards can be

valueable for the knowledge and expertise of an independent director do make a fair point,

however the number of boards a director serves on should not be unlimited. Independent

directors are still ‘just’ human, and it is impossible to be fully committed to a bank board if

someone has too many other commitments that need their attention.

It is quite logical that tenure is related to true independence of the independent director.

And while tenure might play a role in determining how valuable an independent director is a

tenure limit will not necessarily mean that someone that served for, for example, less than

nine years is truly independent. In that respect one should be carefull not to see every

independent director who served for a long time as being not independent anymore.

When it comes to the proportion of independent directors on bank boards, a high proportion

of independent directors does not automatically equal better corporate governance. This

truly depends on whether the independent directors fulfill the other qualifications. For

example: a (super)majority of independent directors would be more valueable if they

possess the other discussed qualifications as well. If they, do not have any industry

experience, a (super)majorty of independent directors will be not of much value.

All these qualifcations contribute to determine whether an independent director can be seen

as valueable (or not).

83

P.O. Mulbert, Corporate Governance of Banks after the financial crisis – Theory, Evidence, Reforms, Working paper No. 151/2010, ECGI, 2010, p. 29 and P. de Andres and E. Vallelado, Corporate Governance in Banking: The Role of the Board of Directors, Journal of Banking & Finance, 2008

21

4. Current Independent Directors on Bank Boards As discussed in chapter 3, there are several controversies surrounding independent

directors: industry experience, director busyness, tenure, and proportion of independent

directors on the board (for a more extensive explanation of these criteria, I refer to § 3.2).

Now that we have discussed the theory regarding independent directors in chapter 3, it is

important to look at the reality of independent directors on bank boards, since these

controversies contribute in determining whether independent directors are valuable on

bank boards.

Therefore, in this chapter I will look at these controversies on five bank boards in the United

States and in Europe. In § 4.2. I will look at the bank boards of the top 5 banks in the US: JP

Morgan & Chase (JPM), Bank of America (BA), CitiGroup (Citi), Wells Fargo (WF) and

Goldman Sachs (GS). In § 4.3. I will look at 5 of the top 6 Banks in Europe: HSBC Holding Plc

(HSBC), Credit Agricole Group (CAG), BNP Paribas (BNP), Barclays and Royal Bank of

Scotland (RBS). All the collected data from these bank boards are of current time (i.e.

2012/2013).

Before I present my findings it is important to clarify when independent directors are

considered to be valueable. Therefore, I will first (briefly) explain the parameters of the

criteria I am going to look at in § 4.1.

4.1. Parameters

In § 3.2. I extensively discussed the theory regarding several controversies surrounding

independent directors. Based on this theory I will determine an independent director

valueable if he/she has the following qualifications:

(Current) Relevant Industry Experience:

Since banks play a special role in our society (see § 2.1), the focus will lie on first hand

banking or relevant financial industry experience/expertise of the independent director(s)

who are currently serving on bank boards. This expertise should also be of a current nature

meaning that independent directors who’s latest expertise within this industry was gained

more than ten years ago from the moment they joined the board, will not be considered to

have current industry experience.

Futhermore, I will look if at least a majority of the independent directors have actual

experience in the banking or financial services sector that can make a valuable contribution

to the bank board (see § 3.2.1 and § 3.3. for more information).

22

0

2

4

6

8

10

JPM BA Citi WF GS

4

2

4

6 5

6

9

5

7

4

Banking Expertise NO Banking Expertise

Nu

mb

er

of

In

de

pe

nd

en

t D

irecto

rs

US Banks

Banking Expertise on US Bank Boards 2013

Director Busyness:

For director busyness I will follow the emperical studies as discussed in section § 3.3.2.

Having more than three other commitments, next to the commitment to serve on the bank

board, will be seen as being overcommitted and therefore unable to make a valuable

contribution to the bank board.

Tenure:

There seems to be a fine line between tenure and true independence. Serving too long on a

board can mean that someone is not as independent as they should be. Despite the

controversy regarding a tenure limit, I will take the view of the UK Code and assume that

serving for more than nine years on a board will compromise a directors’ independence and

their value (see §. 3.2.3 and § 3.3. for more information).

Proportion:

Whether a high (or low) proportion of independent directors is good, will depend on the fact

if the above mentioned qualifications are met (see §3.2.4 and 3.3. for a more extensive

explanation).

4.2. US Banks

4.2.1 Current and Relevant Experience84 Banking experience of independent directors on the US banks can be illustrated as follows:

As is clear from this chart, not all US bank boards consist of a majority of the independent

directors with banking or relevant financial services industry experience. Citi, WF en GS

84 To determine the relevant experience, information is gathered from the company’s website, available company reports. When these reports did not give enough information, further informationw as gathered www.forbes.com, market.ft.com, investing.businessweek.com and www.wsj.com

23

show the best results in that category. But only GS shows a majority of independent

directors with relevant expertise. We should not be too worried about earlier concerns

regarding too many experts from the same background (see §.3.2.1), because these directors

don’t have the exact same background (see next under ‘Goldman Sachs’ and Exhibit E). And,

it is furthermore just a slight majority, meaning that there are still four independent

directors with a different background that can voice their opinion.

To clarify these results, I will discuss the findings of each bank separately.

JP Morgan & Chase85

JP Morgan shows less than half of the independent directors with current banking or

financial serives experience. The four independent directors that do have such expertise are:

(1) Laban. P Jackson, Jr, who worked as a director of the Federal Reserve Bank of Cleveland,

(2) James. S. Crown who is experienced in investment banking and capital markets, (3) Ellen

V. Futter, who was a director of the Federal Reserve Bank of New York and served as its

chairman, and (4) Timothy P. Flynn, who did not work for a specific bank but has extensive

knowledge of the financial services industry due to this 32 year career at KPMG.

Other members of this board are extremely knowledgeable in other sectors like energy (Lee.

R. Raymond), pharmaceuticals (William. E. Weldon), technology and/or manufacturing (D.M.

Cote and Crandall C. Bowles.), Aerospace (James. A. Bell) and entertainment (Stephan B.

Burke). But their knowledge does not come from, a relevant banking or financial services

environment.

However, Ellen F. Futter and David M. Cote are no longer independent directors on the

board of JPM, leaving these three other directors the only ones with relevant banking

experience opposed to five independent directors who lack such experience.

Bank of America86

Bank of America shows the lowest amount of independent directors with current banking or

financial services experience. The only independent directors with banking experience are:

(1) Susan. S. Bies, who was a member of the Board of Governors of the Federal Reserve

System and worked at a regional bank holding company for many years (from 1979 till

2001) and (2) Frank. P. Bramble, Sr, who worked at several financial institutions., including

one that was later acquired by Bank of America .

Sharon. L. Allen who, similar to Timothy. P. Flynn of JPM, has an extensive carreer at Deloitte

for over 40 years, does not fit the description of current financial services experience. Her

previous workexperience does not mention extensive knowledge with financial services.

85

See exhibit A for a more detailed overview 86

See exhibit B for a more detailed overview

24

Despite this lack of industry experts on the board, Bank of America is trying to step it up by

adding two former banking industry executives to it’s board.87

As for the other members of the board, just like JPM, they have a lot of experience but have

not worked within a relevant banking or financial services environment.

CitiGroup88

CitiGroup shows slightly better results compared to JPM and BA, with just one independent

director making the difference in having (or in this case: not having) a majority of

independent directors with relevant industry expertise.

The board members that do have current expertise are: (1) Michael. E. O’Neill and (2) Diana.

L. Taylor, who both worked for (several) banks within 10 years before they were appointed

to the board. Also, (3) Joan. E. Sparo is seen as an asset on this board because of their

(former) job as a financial services executive and Mrs. Sparo job as (former) board member

of ING. And (4) Anthony. M Santomero who served as the President of the Federal Reserve

Bank in Philadelphia has extensive knowledge of the banking industry.

William A. Thompson and Ernesto Zedillo both have experience in the banking industry. Mr.

Thompson worked for Solomon Brothers and Mr. Zedillo worked at the Bank of Mexico.

Unfortunately, their experience exceeds the limit of being qualified as current. Therefore

they are not counted as independent directors with current expertise.

Other directors simply don’t have a background in the banking industry or they gained

experience by sitting on serveral committees within Citigroup (Judith Roding and Robert. L.

Ryan) but don’t have further exprience within the banking industry.

Wells Fargo89

Eventhough Wells Fargo’s board shows quite good results by, just like Citi, having almost

half of its independent directors consist of people with bank industry expertise. In that

respect they also show better results when compared to JPM or Bank of America.

Independent directors that are considered to have such experience are: (1) Elaine L. Chao,

who was a board member of Protective Life Corporation. She also has worked for

BankAmerica Capital Markets Group and Citigroup, however here experience there is not

considered to be ‘current’. (2) Enrique Hernandez, Jr both offers a great contribution to the

board of Wells Fargo, due to his experience at large financial institutions. The same can be

said for (3) Donald. M. James who has substantial knowledge and experience in the banking

and financial services industry. Also, (4) Cynthia H. Milligan, who worked as a bank

regulator, and (5)Judith M. Runstad, who was a director and chairwoman of the Federal

Reserve Bank of San Fransisco, can be seen as great assets on this board. The last indepedent

87 S. Raice, Bank of Ameria Adds To Board, The Wall Street Journal, 24 July 2013 88

See exhibit C for a more detailed overview 89

See exhibit D for a more detailed overview

25

1

3

1

5

3

8

10

8

6

7

0 5 10 15

GS

WF

Citi

BA

JPM

<3 or 3 commitments > 3 commitments

Number of Independent Directors

US

BA

NK

S

Director Busyness US Banks 2013

director on this board with current expertise is (6) Frederico. F. Pena, who gained his

experience from leading his own investment firm and working for a private quity firm.

Howard V. Richardson, who worked for PriceWaterhouseCoopers LLP, is not seen as an

independent director who was current financial industry experience. His expertise in the

financial industries was gained by a variety of positions at PWC LLP. But he filled this

positions from 1996-200290. Since he was appointed to the board in 2013, his experience

can not be seen as ‘current’.

The rest of the directors on this board don’t seem to have the relative bank or financial

industry industry experience.

Goldman Sachs91

Goldman Sachs shows the best results, by having a majority of independent directors with

current expertise. James A. Johnson. Adebayo O. Ogunlesi, Claes Dahlback, James J. Schiro

and Mark. E. Tucker all bring their (extensive) knowledge of the financial services industry

and/or background in investment banking and investment management to the board.

The remainder of the board does not have an extensive background in the banking industry

and therefore does not provide the necessary expertise to the board.

4.2.2 Director Busyness

Independent directors are quite busy on the US bank boards, as can be seen in the chart

below.

This chart shows that more than half of the independent directors on each bank board has

more than three other commitments, next to their job as independent director on the bank

90 According to his biography on the company website he held positions as U.S. Financial Servies and Banking Leader (1996-2000) and Global Banking/Capital Markets leader from 1998-2002. 91

See exhibit E for a more detailed overview

26

board. More specifically, the number of people linked to the number of directorships is

illustrated in the following table:

Number of Other Commitments

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

# Directors

JPM92

3 2 2 1 2

BA93

1 1 3 2 2 1 1

Citi94

1 2 1 1 1 1 1 1

WF95

1 2 4 1 1 3 1

GS96

1 1 2 2 2 1

Here you can clearly see that some directors believe they can do anything. For example

CitiGroup’s independent director, Diana L. Taylor, has 14(!) other commitments. Similarly,

other independent directors of CitiGroup also have a lot on their plate with 11 (Ernesto

Zedillo) and 12 (Joan. E. Sparo) other commitments. Another eyecatching amount of

commitments is by Bank of America’s independent director Arnold W. Donald, who has 13

other commitments.

There are just a few independent directors on these bank boards who hold 3 or less other

commitments. Bank of America, despite the 13 other commitments of Mr. Arnold W. Donald,

seems to have the best balance between busy and not so busy directors. Goldman Sachs and

Citigroup, on the other hand, show very poor results with only 1 director holding 3 or less

other commitments (for CitiGroup this is Robert L. Ryan and for Goldman Sachs this is Mark.

E. Tucker).

Overall, it is obvious that we can talk about (very) busy boards in the US. And, unfortunately

some independent directors with industry expertise are also the ones that are too busy.

Some more than others, but still they hold too much other commitments and it is therefore

questionable whether their expertise is actually helpful as an asset.97 The chart below shows

the number of independent directors with industry experience and their (over)-

commitments.

92 3 commitments: Laban P. Jackson, Jr., Timothy P. Flynn and James. A. Bell. 4 commitments: David M. Cote and Stephan B. Burke. 6 commitments: Lee. R. Raymond and Crandal C. Bowles. 7 commitments: Ellen V. Futter. 9 commitments: William C. Weldon and James S. Crown 93

1 commitment: Frank P. Bramble, Sr. 2 commitments: Sharon L. Allen. 3 commitents: Susan S. Bies, Jack. O. Bovender, Jr and Lionel L. Nowell. 4 commitments: Linda P. Hudson and R. David Yost. 5 commitments: Monica C. Lozano and Thomas J. May. 9 commitments: Charles O. Holiday, Jr. 13 commitments: Arnold W. Donald 94 3 commitments: Robert L. Ryan. 4 commitments: Michael E. O’Neill and Anthony M. Santomero. 6 commitments: William S. Thompson Jr. 7 Commitments: Franz B. Humer. 9 commitments: Judith Rodon. 11 commitments: Ernesto Zedillo. 12 commitments: Joan E Spero. 14 commitments: Diana L. Tayor 95

2 commitments: Howard V. Richardson. 3 commitments: Susan E. Engel and Stpehan W. Sanger. 4 commitments: John S. Chen, Frederico F. Pena, Judith M. Runstad and Susan G. Swenson. 6 commitments: Lloyd H. Dean. 7 commitments: John D. Baker. 8 commitments: Elaine. L. Chao, Enrique Hernandez, Jr. and Donald M. James. 9 commitments: Susan E. Engel 96 2 commitments: Mark. E. Tucker. 4 commitments: Debora L. Spar. 5 commitments: William W. George and M. Michelle Burns. 7 commitments: Lakshmi N. Mittal and Claes Dahlback. 8 commitments: James J. Schiro and Adebayo O. Ogunlesi. 9 commitments: James. A. Johnson 97

See exhibit C for more information.

27

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JPM BA Citi WF GS

2 2 1

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Not Overcommited Overcommited

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(Over)commitments of Independent Directors With Relevant Industry Experience

US Banks

It is clear that only the independent directors with industry expertise on the board of BA are

not overcommited. But, then again, they only have two independent directors with current

and relevant industry experience on their board. JPM shows that half of the experienced

independent directors is overcommited. As for the rest of the US bank boards, their

independent directors with industry experience really have too much other commitments.

Citi and WF even show extreme results, since all directors with industry experience are seen

as overcommitted. The advantage that Wells Fargo, CitiGroup and, especially, Goldman Sachs

had in relation to the amount of independent directors with industry experience is quickly

being undone due to the overcommitments of these experienced independent directors.

Based on these results it is not really convincing that these independent directors, with the

exception of those who do not have too much other commitments, have a valueable

contribution to make on this board. Not only in relation to monitoring management but also

discussing strategy and actually contributing to the future of the bank. In almost all cases

more than half of the board is, based on my definition of busyness, too busy to make a

valueable contribution.

Important to point out in this respect is that not all directorships are listed in the relevant

corporate governance report(s) or on the company’s website. This can be quite misleading,

since the possibility exists that there are more commitments we don’t know about, i.e. more

independent directors that are overcommitted. Take for example Arnold. W. Donald who

28

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10

12

14

JPM BA Citi WF GS

6

11

13

7 6

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0 0

6

3

Less than 9 or 9 years More than 9 years

US BANKS

Tenure on US Banks 2013

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has six(!) other commitments that are not mentioned on the company website nor it’s Proxy

Statement. And Mr. Donald is, unfortunately, not the only one.98

4.2.3. Tenure When it comes to tenure a nine year limit, in accordance with the UK Code, should be enough

to ensure the ‘true independence’ of the current independent directors on the bank board

(see § 3.2.3 for more information). The chart below shows the number of directors who are

currently serving a tenure of less than nine (or nine) years or more than nine years on the

US bank boards.

In all these cases a majority of the independent directors, and in the case of BA and Citi all

independent directors, serve a tenure of less than nine or nine years on the board. However,

there are some directors who serve more than nine years. JPM has four99 of these directors,

WF has six100 and GS has three101. If we accept the nine year limit, this will mean that the

independence of these directors is (or can be) compromised. Despite the current

controversy surrounding the need for a tenure limit (since someone with an independent

mind can not be compromised, see §3.2.3.), big questions can be raised regarding the current

tenures of some of these independent directors. .

Take JP Morgan for example, where Lee. R. Raymond serves for 26 years, Laban. P. Jackson

serves for 20 years, and Jr, James S. Crown for 22 years. Also, in case of WF there are some

directors with long tenures: Susan E. Engel and Judith M. Runstad both serve 15 years,

Cynthia. H. Milligan serves for 21 years, and Susan G. Swenson serves for 19 years now.

98 Commitments of independent directors that are not listed on the company website or relevant corporate governance reprots (like Proxy Statements) are indicated with a ‘*’ in all the exhibits regarding these banks (Exhibit, A, B, C, D, E, F, J, I, K, H). 99

The four directors with a tenure of more than nine years are: 1. Lee. R. Raymond (26 years), 2. Laban. P. Jackson, Jr. (20 years), 3. James S. Crown (22 years) and 4. Ellen V. Futter (12 years). 100 The six directors with a tenure of more than nine years are: 1. Susan E. Engel (15 years), 2. Emrique Hernandez, Jr. (10 years), 3. Cynthia H. Milligan (21 years), 4. Judith. M. Runstad (15 years), 5. Stephan W. Sanger (10 years) and 6. Susan G Swenson (19 years) 101

The three directors with a tenure of more than nine years are: 1. William W. George (11 years), 2. Claes Dahlback (10 years) and 3. James A. Johnson (14 years).

29

0

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4

6

8

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JPM BA Citi WF GS

1 2

4

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9

Non-Independent Independent

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US Banks

Proportion of Independent Directors on US Banks 2013

These are all extreme long tenures, in some cases even twice the tenure limit, to hold as an

independent director and can certainly raise questions about their true independence and

‘cozyness’ with management.

Even the experienced independent directors on the boards of JPM, WF and GS are among the

ones who hold these long tenures.102 Whether they use their knowledge objectively can

certainly be an issue.

4.2.4. Proportion

Despite small differences in proportion, it is very clear that independent directors are

dominant on these US bank boards. To determine whether this high proportion of

independent directors is valuable, we have to take the previously discussed qualifactions

into account.

Based on the results of the previously discussed qualifications, this (super)majority of

independent directors on bank boards in the US does not seem to have the ability to make a

valuable contribution in effectively monitoring management or contributing to the banks

business. First, not all bank boards have a majority of independent directors with relevant

industry experience. Second, the independent directors that do have such experience are in

most cases too overcommitted. So their knowledge may not even be used to the fullest.

Third, if we accept that a nine year tenure is long enough and longer than this will

compromise the independence of independent directors, serious questions can be raised by

the tenures limits on some of these bank boards, their independence and their ability to

objectively participate in company business .

Therefore, a high proportion of independent directors in case of US bank board does not

immediatly add value to the bank board nor the bank as a whole.

102 For JPM: 1. Laban. P. Jackson, Jr. (20 years), 2. James S. Crown (22 years) and 3. Ellen V. Futter (12 years). For WF: 1. Susan E. Engel (15 years), 2. Emrique Hernandez, Jr. (10 years), 3. Cynthia H. Milligan (21 years), and 4. Judith. M. Runstad (15 years) For GS: 1. Claes Dahlback (10 years) and 2. James A. Johnson (14 years)

30

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HSBC CAG BNP Barclays RBS

7

1

4

8

7

6

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1

Relevant Expertise Non-Relevant Expertise

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EU Banks

Banking Expertise on EU Bank Boards 2013

4.3. European Banks

4.3.1. Experience103 Banking experience of independent directors on EU banks can be illustrated as follows

To clarify these results, I will discuss each bank separately.

HSBC Holdings104

HSBC shows more than half of its independent directors has industry experience. (1) James

Comey, (2) Joachim Faber (3) Renato Fassbind and (4) Sir Simon Robertson all have worked

for financial services institutions, (for example: Bridgewater Associates LP, Allianz Global

Investors, Credit Suisse Group) Their experience and background are therefore an asset on

this bank board. Also, (5) Laura Cha brings her extensive regulatory and policymaking

experience to the board (she formerly served as Vice Chairman of the China Securities

Regulatory Commission and Deputy Chairman of the Securities and Future Commission in

Hong Kong). (6) John Lipsky and (7) Rachel Lomax have both worked for bank

institutions,their specific knowledge of the banking industry is therefore a great asset to this

board (Rachel Lomax has worked at the Bank of England and John Lipsky has, among other

things, served at the International Monetary Fund).

The remainder of the independent directors on this board have expertise in other areas such

as management software (Safra Catz), international business and financial accounting

(Marvin Cheung and James Hugh Hallet), pharmaceutical industry (John Coombe) and

103 To determine the relevant experience, information is gathered from the company’s website, available company reports. When these reports did not give enough information, further information was gathered www.forbes.com, market.ft.com, investing.businessweek.com and www.wsj.com 104

See exhibit F for a more detailed overview

31

energy (Sam Laidlaw), but don’t contribute relevant bank or financial services industry

knowledge.

Credit Agricole Group105

CAG has biggest board but the lowest amount of independent directors on its board (see

section 4.3.4.). Of these independent directors, there is only one(!) with relevant industry

experience: Francoise Ververka. He has served on serveral banks (and was an executive

managing director of Standard & Poor’s). The rest of the independent directors on this board

show knowledge is many other fields, however their knowledge does not fit my description

of current relevant bank or financial services industry experience. This leaves this board

with a dissapointing number of just one independent director with bank industry

experience.

BNP Paribas106

BNP, just like CAG, also shows a lacking number of independent directors with current and

relevant industry experience on its board. The four independent director with relevant

experience are: (1) Jean-Francois Lepetit, who served on several banks and was Chairman of

the French stock market and financial markets authorities; (2) Helene Ploix, who was in

charge of Finance and Banking at the Caisse Autonome Refinancement and was an Executive

Director of the International Monetary Fund and The World bank; (3) Michael Tilmant, who

worked for ING; and (4) Fields Wicker-Miurin, who is an international business executive

with more than 20 years experience in the global financial industry.

Like in the previous board, the remainder of this boards shows a lot of experience,

unfortunately this is not the relevant industry experience I am looking for.

Barclays107

Barclays’ board, just like HSBC and RBS (see next), consist for more than half of independent

directors with relevant industry expertise. (1) Sir David Walker, who has worked for Morgan

Stanley. (2) David Booth who also worked for Morgan Stanley and now manages his own

venture capital investments. (3) Dambisa Moyo and (4) Reuben Jeffrey III have both worked

for Goldman Sachs. (5) Tim Breedon, who worked for Legal & General Group, and (6) Simon

Fraser, who worked for Fidelity International, both gained their experience from a carreer at

these financial services firms. (7) Sir Michael Rake also brings valueable experience to the

board, due to his 30 year carreer at KPMG where he gained financial and commerical

experience. And, finally,

(8) Sir Andrew Likierman, who gained experience on the HM Treasury and was a member of

the Cadbury Committee on UK Corporate Governance.

105 See exhibit G for a more detailed overview 106

See exhibit H for a more detailed overview 107

See exhibit I for a more detailed overview

32

The remaining three members ghave expertise in the energy industry (Fulvio Conti),

international power and automation technology industry (Diane de Saint Victor) and the

beverage industry (Sir John Sunderland).

Royal Bank of Scotland108

RBS also shows good results when it comes to a industry experienced board. The seven

independent direcors with industry experience are: (1) Sir Sandy Cromble and (2) Phillip

Scott, who both worked for financial services companies; (3) Alison Davis, who worked as

chief financial officer at Barclays Global Investors (now BlackRock); (4) Tony di Iorio, who

worked at Goldman Sachs, Bank of America and Deutsche Bank; (5) Arthur Ryan, who had

several position wutg Chase Manhattan Bank; and (6) Brendan Nelson and (7) Baroness

Noakes, who both gained financial services expertise during their time at KPMG. Baroness

Noakes, furthermore, served an executive role at the Bank of England.

The only independent director who does not seem to have relevant bank and industry

experience is Penny Hughes, who spend the majority of her executive career at Coca-Cola.

Interestingly, the EU bank boards show (more) independent directors who have previously

served at large international banks such as Goldman Sachs, Bank of America, JP Morgan &

Chase and Deutsche Bank. This particular fact does not show up in the discussed US Bank

boards. However, this might also be a concern. Having too much directors of the same

background might impair their judgement (see § 3.2.1.). This might be the case for Barclays,

where four of the eigth independent directors have previously worked for large banks (Sir

David Walker and David Booth worked for Morgn Stanley. Dambisa Moyo and Reuben

Jeffrey worked for Goldman Sachs).

But, on a more positive note, the EU shows better results compared to the US when it comes

to independent directors’ current and relevant industry experience on the board: there are

three bank boards (HSBC, Barclays and RBS) that show a majority of independent directors

with industry experience on their board opposed to the just one bank board in the United

States (Goldman Sachs).

But, whether this majority of independent directors adds more value to the bank board also

depends on their other qualifications, like available time. This will be discussed now, in §

4.3.2.

108

See exhibit J for a more detailed overview

33

5

7

3

1

5

3

4

8

5

8

0 5 10 15

RBS

Barclays

BNP

CAG

HSBC

<3 or 3 commitments > 3 commitments

Number of Directors

EU

BA

NK

S

Director Busyness EU Banks 2013

4.3.2. Director Busyness

Director busyness on EU bank boards can be illustrated as follows:

This chart shows that only two banks, CAG and Barclays, don’t have a majority of

overcommitted independent directors. The number of directorships held by the individual

directors is illustrated in the table below:

Number of Other Commitments

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

# Directors

HSBC109

2 2 1 1 1 3 2 1

CAG110

1 4 1

BNP111

1 2 4 1 1 1 1

Barclays112

3 2 2 1 1 1 1

RBS113

1 1 1 2 3

The most striking number of other commitments held by independent directors here is 11.

The independent directors responsible for that much other commitments are: (1) Laura Cha

(HSBC); (2) Francois Veverka (CAG); and (3) Helene Ploix (BNP). For more information

regarding the independent directors and their other commitments, I refer to exhibits F, G, H,

I and J. 109 1 commitment: Safra Catz and James Comey. 2 commitments: Rona Fairhead and Sam Laidlaw. 3 commitments: John Coombe. 4 commitments: Renato Fassbind. 5 commitments: John Lipsky. 6 commitments: Marvin Cheung, James Hughes-Hallet and Rachel Lomax. 8 commitments: Joachim Faber and Sir Simon Robertson. 11 commitments: Laura Cha. 110

3 commitments: Caroline Catoire. 5 commitments: Laurence Dors, Francoise Gri, Monica Mondarini and Christian Streiff. 11 commitments: Francois Veverka. 111 0 commitments: Emiel van Broekhoven. 3 commitments: Laurence Parisot and Fields Wicker-Miurin. 4 commitments: Pierre-Andre de Chalender, Christophe de Margerie, Marion Guillou and Jean-Francois Lepetit. 5 commitments: Daniela Weber-Ray. 7 commitments: Denis Kessler. 9 commitments: Michael Tilmant. 11 commitments: Helene Ploix. 112 1 commitment: David Booth, Tim Breedon and Diane de Saint Victor. 2 commitments: Sir David Walker and Dambisa Moyo. 3 commitments: Reuben Jeffrey III and Sir Andrew Likierman. 4 commitments: Sir Michael Rake. 5 commitments: Simon Fraser. 6 commitments: Sir John Sunderland. 7 commitments: Fulvio Conti. 113

0 commitments: Tony di Iorio. 1 commitment: Phillip Scott. 2 commitments: Penny Hughes. 3 commitments: Sir Sandy Cromble and Baroness Noakes. 4 commitments: Alison Davis, Brendan Nelson and Arthur Ryan.

34

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(Over)commitments of Independent Directors With Relevant Industry Experience

In comparison with the independent directors on US bank boards, there is a big difference

when it comes down to the busyness of independent directors, especially less busy

independent directors. Percentage wise the EU has, of its total of independent directors,

43% that is not seen as being overcommited . The US on the other hand only has 27% of its

total independent directors that are not seen as being overcommitted.114 The EU clearly

shows better results in that area, with a difference of 16%.

Unfortunately, similar to the US bank boards, the independent directors with experience are

(in most cases) also the ones who are seen as being overcommitted, making it very

questionable whether their experience can acutally be seen as an usefull asset on these

boards. The number of experienced independent directors and their (over)commitments

can be illustrated as follows:

Interestingly to see here is that the only independent director with industry expertise on the

board of CAG, is also the busiest director on this board holding 11(!) other commitments.

Furthermore, on HSBC’s and BNP’s bank board there is only one(!) independent director

that is not seen as being overcommited. For HSBC this is James Comey and for BNP it is

Fields Wicker-Miurin. Barclays and RBS show the opposite result, by having the majority of

independent directors not being overcommitted.

114 US: The US has a total of 52 independent directors. 14 of those independent directors are not seen as overcommitted based on my stadards. (14:52)x100% = 26,92% EU: The EU has a total of 49 independent directors. 21 of those independent directors are not seen as being overcommited based on my standards. (21:49)x100%= 42,86%

35

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HSBC CAG BNP Barclays RBS

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EU BANKS

Tenure on EU Banks 2013

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Overall, EU bank boards seem to do better , based on these results, when it comes to

overcommitted experienced independent directors than the US bank boards. While the EU

also has three bank boards where there are overcommitted experienced independent

directors, at least they have two bank boards with a majority of independent directors with

experience that are not overcommited opposed to one US bank board (Bank of America).

Also, in the EU there is only one bank board where all the experienced independent

directors are seen as being overcommitted: CAG. This opposed to two US bank boards: Citi

and WF. And this is only because there is one experienced independent director on the EU

bank board, opposed four experienced independent directors on Citi and six on WF.

Furthermore, when it comes to the commitments of independent directors with industry

experience, ‘only’ 56% of experienced independent directors are overcommitted on the EU

bank boards, opposed to 76(!)% on US bank boards.115

4.3.3. Tenure There is a big difference when it comes to tenure on EU bank boards compared to the US

bank boards, as is illustrated in the following chart:

While in the US there are three bank boards having independent directors serving more than

nine years, the EU only has one bank board: BNP. The only two directors serving more than

nine years are: (1) Denis Kessler who is currently serving 13 years, and (2) Helene Ploix who

is currently serving 10 years. In accordance with the tenure limit set by the UK Code, their

independence might be compromised.

115 US: The US has a total of 21 independent directors with relevant and current industry experience. 16 of these independent directors are seen as overcommitted: (16:21)x100%= 76,19% EU: The EU has a total of 27 independent directors with relevant and current industry experience. 15 of these independent directors are seen as overcommitted: (15:27)x100%= 55,56%

36

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Proportion of Independent Directors on EU Banks 2013

Despite the fact that they serve more than nine years, it is ‘nothing’ compared to the over 20

years that are spend by ‘independent’ directors at some of the US bank boards (see section

4.2.3.).But just like in the US, there can be an issue with objectivity since Helene Ploix is

considered to be experienced independent directors on the board op BNP. However,

compared to the US, this is a far smaller problem.

The EU only has one board where only one experienced directors’ independence might be

compromised opposed to three different bank board where a total of nine independent

directors’ independence is in question.

Based on the tenure limit set out in section 4.1., it would seem that the independence of

independent director on EU bank boards are better safeguarded by the fact that not so much

independent directors are serving a (too) long tenure.

4.3.4. Proportion The proportion of independent directors on EU bank boards show an immediate difference

compared to the proportion of independent directors on US bank boards.

The biggest difference between the EU and US bank boards is that not all EU bank boards

have a majority of independent directors. Only CAG has a board of 15 dependent and ‘just’

six independent directors. This can immediatly raise questions about the power

independent directors have on this board.

EU bank boards do have three bank boards that consist of a majority of independent

directors with relevant industry experience. However, these independent directors, in most

cases, are also overcommitted. Even the experienced ones, leaving it very doubtfull that their

knowledge will actually make a valueable contribution to the bank in question. When it

37

comes to tenure, the EU shows quite good results with only two independent directors

having a tenure of more than nine years.

So, while we were off to a pretty good start with three banks at least having a majority of its

independent directors with industry experience, if you factor in the available time, these

results quickly drop.

EU bank boards do score better compared to the US when it comes to a majority of

independent directors who have relevant expertise on the bank boards, director busyness

and tenure. However, that’s all it is. Their qualifactions are still below what you may expect

from a bank board. So, in this case a majority (except for CAG) of independent directors on

the bank board does not immediatly mean better governance of more value.

4.4. Are There Any ‘Qualified’ Independent Directors? The discussed results regarding qualifactions of independent directors, don’t seem very

hopefull. Either independent directors on these bank boards :

a. do not have the current and relevant industry experience

b. are overcommitted

c. have a tenure that is too long; or

d. all of the above

Therefore, the question remaining is whether there is an independent director who fullfills

all these qualifactions or are we just searching for a needle in a hay stack? When we select

the independent directors who are experienced, not overcommitted and have an acceptable

tenure (i.e. less than nine or nine years), the following conclusion can be drawn.

The United States

Citigroup and Wells Fargo immediately fall off because all their experienced independent

directors are overcommitted. Therefore it is not necessary to look to tenure, because this

will not make a difference. This only leaves JPM, Bank of America and Goldman Sachs.

The only independent directors with relevant industry experience who are not

overcommitted on the board of JPM are: 1. Laban P. Jackson and 2. Timothy P. Flynn. Of

these two directors only Timothy P. Flynn has an acceptable tenure of one year (Laban P.

Jackson currently serves 20 years). Making him the only one who fullfills the criteria.

Bank of America has two experienced independent directors who are not overcommitted: 1.

Susan S. Bies and 2. Frank B. Bramble. Both also serve an acceptable tenure of 4 years and

respectively 7 years. Goldman Sachs has just one experienced independent director, who is

not seen as being overcommitted, and serves for only one year on the board: Mark. E.

Tucker.

38

The US shows a total of 4 independent directors who are experienced, not too busy and

have an acceptable tenure, making their ‘true independence’ not immediatly questionable.

Europe

CAG, just like CitiGroup and Wells Fargo, immediately falls off since its only experienced

independent director is also the most busiest one. Both HSBC and BNP have one experienced

independent director who is not overcommitted and has an acceptable tenure. For HSBC this

is James Comey and for BNP this is Fields Wicker-Miurin. Barclays shows the quite a high

number of six experienced independent directors who are not overcommitted and have not

served for too long on the board: 1. Sir David Walker, 2. David Booth, 3. Tim Breedon, 4.

Dambisa Moyo, 5. Reuben Jeffrey III and Sir Andrew Likierman. And finally, RBS has four

independent directors who can fullfill the above mentioned criteria: 1. Sir Sandy Cromble, 2.

Tony di Iorio, 3. Baroness Noakes and 4. Phillip Scott.

This brings the total of ‘qualified’ independent directors in Europe to 12, three times as

much as in the US.

However, these ‘qualified’ independent directors in the US respresent just 8%116 of the total

independent directors on the US bank boards. In case of the EU, these 12 qualified directors

represent 25%117 of the total independent directors on EU bank boards. This means that

92(!)% of independent directors on US bank boards is not seen as valueable against 75% on

EU bank boards.

These results show that it is not exactly like seeking a needle in a hay stack, but they also

don’t show very comforting results, especially the US.

4.5. Conclusion

As previsously discussed it is important to have a understanding of the business you are

working for. The researched bank boards showed quite dissapointing results when it comes

to the relevant expertise of independent directors, four of the ten banks showed a majority

of independent directors with industry experience (one bank in the US (Goldman Sachs) and

three in Europe (HSBC, Barclays and Royal Bank of Scotland)).

This dissapointing start did get worse when it came to the busyness of directors.

Independent directors do need to invest their time to actually be valueable. Having too much

116 The US has a total of 52 independent directors on the five discussed bank boards. Only 4 of those seem to fullfill the qualifications. (4:52)x100%=7,69% 117

The EU has a total of 49 independent directors on the five discussed bank boards. Only 12 of those seem to fullfill the qualifications. (12:49)x100%=24,49%

39

other commitments can seriously interfere with this ability and does not serve the bank and

all involved stakeholders in their best interest. Unfortunately, there were a lot of

independent directors who are overcommitted. In the US there were 38 out of 52

independent directors and in the EU 28 out of 49 independent directors. More than half of

the total independent directors in the US as well as in Europe are overcommitted, this also

includes the experienced ones. This truly begs the question whether they are able to provide

valueable input and monitor management. And when it comes to the experienced

independent directors: whether their knowledge is of any use when they are too busy to

apply that knowledge to the bank board.

Furthermore, if we accept a tenure limit of nine years to determine independence, serious

questions can be raised about the ‘true independence’ of several board members of the US

bank board who currently serve a tenure of twenty years or more on US bank. In EU bank

boards this problem does not occur as much, since only two independent directors serve a

tenure limit of more than nine years against thirtheen independent directors on US bank

boards.

Based on these results, a high proportion of independent director does not immediately

mean that they are able to make a valueable contribution like is expected.

But, not all hope is lost. There are actually some independent directors who do fullfill these

qualifactions. But these numbers are so low, especially in the US, that they are not very

comforting in the ability to make a valuable contribution to the bank board.

40

5. Future of Independent Directors on Bank Boards: Regulation versus Human Reality As previously mentioned, the regulatory aim to strengthen boards by enhancing their

independence emerged in the aftermath of Enron and similar scandals at the turn of the

century.118 Despite the in chapter 4 showed evidence regarding the (small) value of

independent directors, regulatory measures have been taken before and after the crisis to

ensure (more) board independence based on the idea that this will contribute to better

corporate governance. In this chapter I will give an overview of the regulation before and

after the crisis. I will only focus on the regulatory action related specifically to independent

directors. Also, I will discuss whether more regulation in light of the previously discussed

arguments is desirable and/or helpful with regard to the value of independent director. This

information will be set out in § 5.1. In § 5.2. I will discuss an important, and sometimes

overlooked, aspect of independent directors: their humanity.

5.1. Regulation The two most important regulations post-crisis are The Wall Street Reform and Consumer

Protection Act of 2010 (also known as the Dodd-Frank Act) in the US and the European

Commissions proposal of a E.U. Directive on the Acces to the Activity of Credit Institutions and

the Prudential Supervision of Credit Institutions and Investment Firms (“the CRD IV Proposal”)

in Europe. However, before these measures were formed, there was already regulation in

place that was (supposed) to deal with the independent directors poblem(s). In § 5.1.1. I will

first discuss these previous measures in the United States before I discuss the more recent

ones. The same will be done for Europe in § 5.1.2.

5.1.1. The United States In response to major corporate scandals and to strengthen the corporate governance

practices of publicly listed firms in America, the US Congress passed the Sarbanes-Oxley Act

(SOX: Public Company Accounting Reform and Investor Protection Act) in 2002, which

requires that the audit committees of all publicly listed firms in the US consist solely of

independent directors. In 2003, both New York Stock Exchange (NYSE) and NASDAQ

announced that it would require all companies listed at NYSE to have a majority of

independent directors after 2005. NYSE further required that the nominating, corporate

governance, and compensation committees of companies listed at NYSE to consists entirely

of independent directors after 2005.119 These new rules seemed promising. The majority of

the a board’s directors has to be independent, which would, in theory, better protect

shareholders (and other stakeholders). But, the recent financial meltdown made it clear that

118 See section 3.1.1. and E.M. Dorenbos and A.M. Pacces, Coporate Governance of Banks: Is More Board Independence the Solution, Dovenschmid Quaterly, 2013, p. 16 119

R.W. Masulis, C. Ruzzier, S. Xiao and S. Zhao, Do Independent Directors Matter?, March 2012, p. 2

41

SOX was not enough: the banks in trouble were largely in compliance with SOX and had a

board that consisted for 80% of independent directors, as were all members of their audit,

compensation and nominating committees.120

Federal rules passed in the wake of the recent financial meltdown also incorporate director-

independence provisions. The Dodd-Frank Act enhances the level of independence in a firm

by having more independent directors on committees .Take for example the risk commitee,

this committee is required to be compromised of independent directors and at least one

expert in risk management. It further requires compensation committee members to be fully

independent.121 But, a problem might be that independence of these directors is based (yet

again) on formal criteria to determine who fits the ‘independence’ description.122

5.2.2. Europe In Europe, similar requirements as in the US were established by self-regulatory corporate

governance codes and by the Commission Recommendation on the Role of Non-Executive of

Supervisory Directors and the Committees of the (Supervisory) Board. Most EU member

states based their codes on the comply-or-explain principle, meaning that compliance with

the code is not mandatory provided that an explanation is given in case of non-

compliance.123

The post-crisis regulation in Europe, CRD IV has several articles enhancing the role of

independent directors within banks and it goes further to specify what is expected from

those independent directors. Compared with Dodd-Frank this particular piece of regulation

has more general articles regarding the role of independent directors. For example, CRD IV

states that the ‘management body’124 shall possess adequate collective knowledge, skills and

experience to be able to understand the institutions activities, including the main risks.

Furthermore, each member of the management body shall act with honesty, integrity and

independence of mind to effectively assess and challenge the decisions of the senior

management where necessary and to effectively oversee and monitor management decision-

making.125

120

R.C. Pozen, The case for professional boards, Harvard Business Review 15, 2010 and R.W. Masulis, C. Ruzzier, S. Xiao and S. Zhao, Do Independent Directors Matter?, March 2012, p. 4 121 Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub.L. No. 111-203, H.R. 4173, section 952 122 See for example Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub.L. No. 111-203, H.R. 4173, section 10.C 123

E.M. Dorenbos and A.M. Pacces, Coporate Governance of Banks: Is More Board Independence the Solution, Dovenschmid Quaterly, 2013, p. 16-17 124

Article 3, under 7 CRD IV: The CRD IV does not speak of a ‘board of directors’, it does speak of a ‘management body’. A management body means an institution’s body or bodies which are appointed in accordance with national Law, which are empowered to set the stitutions strategy, objectives and overall direction, and whch ocersee and monitor management decision-making and include the persons who effectively direct the business of the instittution. ‘Management body in its supervisory function’ means the management body acting in its tole of overseeing and minitoring management decison making. 125 Article 91, paragraph 7 and 8 CRD IV. See also paragraph 56 of Directive 2013/36/EU: The role of non-executive members of the managament body within an institution should include contructively challenging the strategy of the institution and thereby contributing to its development strategy of the institution, scrutinising the performance of management in achieving agrees objectived, satsifying themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible, scrutinising the design and implementation of the institution’s remunerationpolicy and providing objective views on the resources, appointments and standards of conduct.

42

The CRD IV regulation, and therefore the EU, recognises that holding too many directorships

will preclude an independent director from spending adequate time on the performance of

that oversight role.126 For this reason, a limit on the number of directorships is proposed

stating that all member of the management body shall commit sufficient time to perform their

funtions in the institution. Initially, a limit of (a) one executive directorships with two non-

executive directorships or (b) four non-executive directorship is set out. However, there are

some exceptions to this rule. First, in some cases holding several directorships are counted

as just one in case (a) the executive or non-executive directorshops are held within the same

group, (b) the executive or non-executive directorshops are held within institutions which

are members of the same institutional protection scheme (..) or undertakings (including

non-financial entities) in which the institution hold a qualifying holding. Second,

directorships in organisations which do not pursue predominantly commerical objectives,

such as non-profit-making or charitable organisations, shall do not even count as a

directorship. And third, competent authorities may authorise members of the managemet

body to hold one additional non-executive directorship.127

These proposed measures are also in line with the so-called Walker Report, carried out by

Sir David Walker in 2009 to examine corporate governance in the banking industry after the

crisis.128

5.1.3. Impact of Regulation It has been argued that regulation may actually have contributed to the lack of meaningful

involvement of independent directors. The independence requirement imposed by SOX for

audit committees, by the New York Stock Exchange also for other board committees and by

the European Codes for non-executive directors, may actually have contributed to the

weakness of bank boards by excluding as not independent people who had worked for the

bank or had banking experience from other related institutions. Paradoxoically, the more we

insist on independence of non-executive directors according to a set of formal criteria based

on previous and current relationships with the company and its management, the more

dependent the independent non-executives become of the executives as their single source

of information and perspective on the company, its performance, prospects and

126 in order to monitor management actions and decisions effectively, the management body of an institution shoud commit sufficient time to allo wit to perform its functions and to be able to understand the business of the institution, its main risk exposure and the implications of te business and the risk strategy. Conbining too high number of directorships would preclude a member of the management body from spending adequate time on the performance of that oversight role. Therefore, it is necessary to limit the number of directorships a member of the management body of an institution may hold at the same time in different entitites, However, directorships in organisations which do not pursue predominantly commerical objectives, , should not be taken into account for the purposes of aplying such a limit. 127 Article 91, paragraph 1-6 CRD IV 128 Sir David Walker, A Review of Corporate Governance in UK Banks and Other Financial Industry Entities, 2009, p. 9: The most critical need is for an environment in which effective challenge of the executive is expected and achieved in the boardroom before decisions are taken on major risk and strategic issues.For this to be achieved will require close attention to board composition to ensure the right mix of both financial industry capability and critical perspective from high-level experience in other major business.It will also require a materially increased time commitment from non-executive directors (NEDs), from whom a combination of financial industry experience and independence of mind will be much more relevant than a combination of lesser experience and formal independence. In all of this,the role of the chairman is paramount,calling for both exceptional board leadership skills and ability to get confidently and competently to grips with major strategic issues.With so substantial an expectation and obligation,the chairman’s role will involve a priority of commitment that will leave little time for other business activity.

43

challenges.129 Also, these regulatory measures merely added a new layer of legal obligations

to the job of governance without improving the quality of people serving on the boards or

changing their behavioral dynamics.130

The post-crisis regulation enhancing board independence can be seen as just ‘more of the

same’. If this notion of independent directors does not work now, how will more of this same

concept be actually valuable on a bank board?

Surprisingly, the US post-crisis regulation does not really speak of a directorships limit nor a

tenure limit. And the EU post-crisis regulation also does not mention a tenure limit. But, the

non-existence of a tenure limit is not necessarily a bad thing since one can not legislate

integrity. Anyone who has an independent mind will not compromise even as years pile on.

The only benefit of a tenure limit would be a fresh part of eyes and fresh blood coming on

board.131 But this fresh part of eyes might also mean that there is new wave of independent

directors that has to (again) learn the ways of sitting on such a complex entity as a bank

board.

With respect to the directorship limit on the other hand, it is very questionable whether the

directorship limits of CRD IV, especially the exemptions of this limit, will have the impact

they are desgined for. As set out in the previous chapter, independent directors do not

always have the time nor the experience to be actually usefull. And even if they have the

experience, they might not have the time and vice versa. Even if a director has no other

‘directorships’ but sits on a board of six non-profit organizations. This will not mean the

director has more time or is in a better position to make a valuable contribution to the

board. Distinguishing non-profit from profitable directorships will therefore not make a

significant difference in available time of independent directors.

Futhermore, these post-crisis regulatory measures still describe formal criteria to determine

the independence of a director. They do have a stronger focus on what mind set an

independent director needs to have, especially the CRD IV Regulation in Europe. But how

will you measure these basic human concepts? It is likely that technical standards on notions

as honesty, integrity and independence of mind will probably be based on unworkable and

irrelevant formalistic approach that will not strengthen personal responsibility but in fact

reduce it. Formal governance arrangements are not the key indicators of good board

performance.132

129 J. Winter, The Financial Crisis: Does Good Corporate Governance Matter and How to Achieve it?, DSF Policy Paper, No. 14, August 2011, p. 7 130 R.C. Pozen, The case for professional boards, Harvard Business Review 15, 2010 and R.W. Masulis, C. Ruzzier, S. Xiao and S. Zhao, Do Independent Directors Matter?, March 2012, p. 131

B. Shrivastava, Are long-serving independent directors truly independent?, Live Mint & The Wall Street Journal, September 23, 2012 132

J. Winter, The Financial Crisis: Does Good Corporate Governance Matter and How to Achieve it?, DSF Policy Paper, No. 14, August 2011, p. 12

44

What really matters, independent board members’ behaviours, perceptions, attitudes,

drivers, fears and the dynamics in the group, escapes direct regulatory intervention.133 And

that is the one thing that seems to be overlooked in all of this: the concept that, despite the

perfectly fine theory, independent directors are still human. And the reality that comes with

being just ‘human’ should be taken into account. This will be discussed now, in § 5.2.

5.2. Human Reality As was shortly mentioned in § 5.1, human reality should not be overlooked when it comes to

the notion of independent directors. This is also recognized in the 2009 Walker Review

where it was highlighted that in the lead-up to the financial crisis the chief defeciencies in

corporate governance were behavioural, not organisational. Any discussion about improving

corporate governance must therefore examine the character traits underpinning individual

directors and the board as a whole.134

It has been argued that independent directors miss incentive to actually monitor

management like they are supposed to and that the fundamental cause for poor decisions of

many company directors stems from one main reason: they are spending somebody else’s

money. Human nature being what it is, people care far less, and sometimes even not at all,

about what is not theirs. In the corporate governance context this is not a revelation, it is

technically known as ‘agency costs’.135 Jensen and Mecklin discuss the problem of agency

costs as follows: because managers cannot capture all of the gains if they are successfull, and

will not suffer all of the losses should the venture flop, they have less incentive to maximize

wealth than if they themselves were the principals.136 Moreover, as Adam Smith wrote in

The Wealth of Nations: the directors of such companies, however, being the managers of

other people’s money than of their own, it cannot be expected, that they should watch over it

with the same anxious vigilance with which the partners in a private co-partnery frequently

watch over their own. (..) Negligence and profusion, therefore, must always prevail more or

less, in the management of the affairs of such company.137

Therefore, another problem might be that independence in itself is not enough; scholars

have recently been focusing increasingly on the proper incentive structure for independent

directors. This intuitively makes sense, given the numerous tasks we assign to independent

directors and the almost superhuman results we expect from them: we expect them to guard

133 J. Winter, The Financial Crisis: Does Good Corporate Governance Matter and How to Achieve it?, DSF Policy Paper, No. 14, August 2011, p. 12 134 The Korn/Ferry Instititute, What Makes an Exceptional Independent Non Executive Director?, 2012, p. 5 and Sir David Walker, A Review of Corporate Governance in UK Banks and Other Financial Industry Entities, 2009, p. 24-26 135

J.M. Convill and M. Bagaric, Why all Directors Should be Shareholders in the Company: The Case Against Independence, Bond Law Review, Vol. 16 (2004), Iss. 2, Art, 2, 2004, p. 40-41 136 M. Jensen and W. Meckling, The Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, Journal of Financial Economics, Volume 4, No. 4, 1976, p. 305-360 and J.M. Convill and M. Bagaric, Why all Directors Should be Shareholders in the Company: The Case Against Independence, Bond Law Review, Vol. 16, Iss. 2, Art, 2, 2004, p. 43-44 137

A. Smith, an Inquiry into the Nature and Causes of The Wealth of Nations, DigiReads.com Publishing, 2009, p. 439

45

aginst selfdealing by examining conflict-of-interest transactions; we expect them to actively

oversee management and to detect and prevent fraud, independent directors are supposed

to examine corporate affairs and thus prevent managerial mismanagement. In short: we ask

a lot ot hem. In particular we expect independent directors to speak out and take a proactive

role in monitoring.138 Herein lies another important prerequisite: a board member’s ability

to voice independent or potentially unpopular views. The idea that independence is

important to good board governance is obviously not new and has been reinforced trough

law and regulations. Personal or informal loyalties can be just as detrimental to strong,

independent views as more formal ties can be.139 The challenge for supervisors is,

irrespective of offical independence, how do we assess whether board members exercise

intellectual independence?140

And why would (future) indpendent directors turn down the offer to sit on a bank board,

even when they do not have an independent mindset? They get paid very well and, for some,

for little time. Take the the most busy, and sometimes inexperienced, directors in the US for

example: Diana. L. Taylor was paid $ 371.250, Ernesto Zedillo got $ 298.750 and Joan E.

Sparo got $ 206.250.141 These are all pretty nice salaries to receive considering all the other

commitments these people have. But, it can be worse. Take for example James. J. Schiro from

Goldman Sachs. James J. Schiro is the busiest independent director on this board, with nine

other commitments, but he is also the best paid independent director with a compensation

of $539.927. In the EU there is difference in pay. Take for example Helene Ploix of BNP who

was paid ‘only’ EUR 53.627.142 This is a big difference compared to the US. But, Laura Cha

who sits on the board of HSBC, with her 11 commitments, on the other hand, is rewarded £

548.000.143 All in all, these numbers show that even if the director has little time to make a

valueable contribution, he/she will still be rewarded handsomely and that does not seem

like a very good incentive (to me at least).

Furthermore, because banks play such a special role, the morzal hazard problem due to bail

outs is very much present and plays a (big) role in determining the value of independent

directors on a bank board. As we all know, banks got bailed out during the financial crisis.

This ‘safety net’ might stimulate independent directors not to properly perform their job,

138 W.G. Ringe, Independent Directors: After the Crisis, Legal Research Paper Series, No. 72/2013, University of Oxford, July 2013, p. 18 139 H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 11-12 140

H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 11-12 141 CitiGroup, Proxy Statment, 2013, p. 39 142 BNP Paribas, Registration Document and Annual Report, 2012, p. 202 143

Barclays, Director Remuneration Policy. Available at http://reports.barclays.com/ar12/governance/remunerationreport/directorsremunerationpolicy.html

46

since they are going to be ‘rescued’ when it goes wrong.144 This is also in line with the

previously mentioned argument of Jensen and Mecklin.

The most common argument against all of the previsouly mentioned aguments of why

independent directors are not likely to perform their job as they should, is that they have a

reputation to uphold. Supposedly independent directors have an incentive to do a good job

because they want to protect their reputations as effective, independent decision makers.145

Fama and Jensen state that ‘(..) outside directors have incentives to develop reputations as

experts (..) They use their directorships to signal to internal and external markets that they are

experts (..)’.146 However, this need for ensuring a good reputation can actually make

independent directors less valueable. Studies show that independent directors trying to

protect their reputation are more likely to resign when they anticipate the firm on whose

board they sit is going to perform poorly or disclose adverse news. Meaning that they will

leave when they are most needed.147 Another problem with reputation is that it needs

accountability.148 Independent directors rarely face liability for their actions. While, as

previously mentioned, some content that markets and reputational sanctions can ensure

that independent directors are accountable for their actions (or lack thereof), this

contention is flawed. Still others suggest that liability risks cannot encourage directors to

adhere to their responsibilties but studies contradict that suggestion. Hence, the failure to

ensure that independent directors face some credible risk of liability means we may have no

serious accountability process for those directors. This makes reliance on such directors

particularly problematic. 149

In that respect more accountability of independent directors might be a step in the right

direction.

Based on this information there are still a lot of open questions like: What can encourage

independent directors to ‘fight the battle’ rather than enjoy an easy life by pursuing a laid-

back approach?150 And, are engagement, expertise and independence enough? How can you

ensure that boards consider the interest of other stakeholders, like creditors and the

public?151

144

and E.M. Dorenbos and A.M. Pacces, Coporate Governance of Banks: Is More Board Independence the Solution, Dovenschmid Quaterly, 2013, p. 18-19 145

J.R. Booth, M.M. Cornett and H. Tehranian, Board of directors, ownership and regulation, Journal of Banking and Finance 26, 2002, p. 1973-1974 and M. Gutierrez and M. Saez, Deconstructing Independent Directors, January 2012, p. 146 E. Fama and M.C. Jensen, Seperationof Ownership and Control. Journal of Law and Economics 26, p. 301-325 147 M. Gutierrez and M. Saez, Deconstructing Independent Directors, January 2012, p. 24 and R. Fahlenbrach, A.Low and R.M. Stulz, The Dark Side of Outisde Directors: Do They Quity Ahead of Trouble?, Fisher College of Business, Working Paper Series, July 2013, p. 2-3 148 M. Gutierrez and M. Saez, Deconstructing Independent Directors, January 2012, p. 24 149 L.M. Fairfax, The Uneasy Case of the Inside Director, Iowa Law Review, Volume 96:127, 2010 p. 167-174 150 W.G. Ringe, Independent Directors: After the Crisis, Legal Research Paper Series, No. 72/2013, University of Oxford, July 2013, p. 18 151

H. Mehran, A. Morrison and J. Shapira, Corporate Governance and Banks: What Have We Learned from the Financial Crisis, Staff Report No. 502, Federal Reserve Bank of New York, June 2011, p. 11-12

47

5.4. Conclusion

The main question here was if regulation is able to improve the value of independent

directors on bank boards. Regulation might be helpful in some areas. The discussed

regulatory measures might be a step in the right direction since it is recognized that holding

too many directorships will make an independent director less valuable. However, the

exceptions made to this measure will not have a great impact in practice. Also, some

regulatory measures still take a formal approach in determining ‘independence’. Adjusting

these measures might be of more help.

Pre- and post crisis regulations do seem to have one thing in common: the unability to

regulate human behaviour. Eventhough CRD IV does point out what mind set an

independent director should have. There is no good way to actually regulate this. Making

more formal criteria when it comes to the human aspects independent directors should

possess, will not improve personal responsibility.

In that respect, an overlooked fact seems to be that independent directors are still just

human, meaning that they might fit the more formal box labelling them ‘adequate’ but that

does not mean that they are actually fit for the job they are supposed to perform. When it

comes to human reality, independent directors might not have the best incentives to actually

do the job that is expected from them. So, all the regulation in the world might still not be

able to ensure the value of the independent directors and.

The biggest concern here is that even someone that does not have an independent mindset

can pass off as an ‘independent’ director. Because, how will you know he/she does not have

an independent mind? There is no ‘check-the-box’ system for this.

Based on this information, the notion and theory of independent directors is honestly quite

nice. However, this notion is not very easy to realise and expectations of independent

directors might be too high. The main problem is that you cannot legislate the most

important quality of an independent director: integrity. Combined with a lack of incentive

and a lack of accountability, it comes down to a hope that independent directors do their job

as we expect from them.

So, on that note, we should probably not put all our eggs in the independent director basket

and hope that they will lead us into a world where everything runs smoothly because they

are sitting on the board.

48

Conclusion

To determine the value of independent directors I looked at (1) current and relevant

industry experience, (2) available time, (3) tenure, and (4) proportion of independent

directors on bank boards. Based on the results from these four criteria, I come to the

conlusion that the added value of independent directors on bank boards is (very) limited.

First of all, from the researched bank boards only four out of ten showed a majority of

independent directors with industry experience. These were the first dissapointing results,

since specific industry expertise is crucial. One can not understand the intricacies bank

bussines brings without the proper knowledge. Secondly, these four banks that showed

promising results actually lost their advantage due to overcommited independent directors.

Even with all the proper knowledge, logic dictates that the time an independent director

spends on the bank boards will be servely limited if he/she has too many other

commitments in need of attention. And it is not only these four banks, overall more than half

of the total(!) directors in the US and in the EU is seen as overcommitted. So, that truly begs

the question how much time they spend on the bank board and what their valueable

contribution actually is. Thirdly, when it comes to tenure, however debatable this subject is,

huge questions can be raised by some tenures hold by independent directors on US bank

boards. In some cases they sit on the board for over twenty(!) years. In that respect I can see

a concern regarding the true independence of those directors. But, the EU showed promising

results in this area with only two independent directors holding a tenure of more than nine

years (and far under twenty years). So in the EU this concern regarding true independence is

much less present. And lastly, the proportion of independent directors on the board. These

results showed that a high proportion of independent directors does not necessarily equal

better corporate governance. When you factor in all the above mentioned results, a high

proportion of independent directors in these cases might not result in what is expected.

But, not all hope is lost, there are some independent directors that actually fullfill these

qualifications, however these numbers are so low that they are not really comforting.

The role regulation can play in improving the value of independent directors can also be

limited, especially when you take human reality into account. Before and after the crisis

regulatory measures have been taken to enhance independent directors on bank boards.

However these measures don’t really seem to have done the job. Regulatory measures after

the crisis do acknowledge some of the issues related to independent directors, however in

practice they will not provide the sought after result. And, in some cases there are still

49

formal criteria being attached to determing who is an independent director. There are some

places regulation can go and adjusting some of these measures might actually help.

But. the thing that seems to be overlooked in all of this is human reality. Some important

qualities in independent directors, like integrity, cannot be regulated. In that respect even

someone without an independent mind can pass off as an ‘independent’ director, because

how will you know? And I believe this is a big concern.

One thing we can take from these results is that, based on this information, the notion and

theory of independent directors is quite nice. However, this notion is not very easy to realise

and expectations of independent directors might be too high. Combined with a lack of

incentive and a lack of accountability, it comes down to a hope that independent directors do

their job as we expect from them. Just slapping the word ‘independent’ on a director does

not make an independent director immediately and truly valueable.

50

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Publication, 2009

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Regulation

Companies Bill 2012 (India)

Dodd-Frank Act

55

Sarbanes-Oxley Act),

NASDAQ and NYSE Listing Regulations

CRD IV

Websites

www.jpmorganchase.com

www.bankofamerica.com

www.citigroup.com

www.wellsfargo.com

www.goldmansachs.com

www.hsbc.com

www.credit-agricole.com

www.bnpparibas.com

group.barclays.com

www.rbs.com

market.ft.com

quotes.wsj.com

investing.businessweek.com

Reports

JP Morgan & Chase, Proxy Statement, 2013

Bank of America, Proxy Statement, 2013

CitiGroup, Proxy Statement, 2013

Wells Fargo, Proxy Statement, 2013

Goldman Sachs, Proxy Statement, 2013

HSBC Holdings Plc, Annual Report and Accounts, 2012

Credit Agricole Group, Annual Report, 2012

BNP Paribas, Registration Document and Annual Financial Report, 2012

Barclays, Annual Report, 2012

Royal Bank of Scotland, Annual Report and Accounts, 2012

56

Exhibit A: JP Morgan & Chase

152 He serve don the board untul July 19 2013

Name Age Independent Director Since Other Board Commitments Experience

1. James Dimon 57 No 2000 N/A -

2. Lee. R. Raymond

74 Yes 1987 1. Business Coucil for International Undertanding (director) 2. Wisconsin Alumni Research Foundation (trustee) 3. Mayo Clinic (trustee) 4. Innovations in Mdicine Leadership Council of UT Southwestern Medical Center (member) 5. National Academy of Engineering (member) 6. National Petroleum Council (member)

No

3. William C. Weldon

64 Yes 2005 1. CVS Caremark Corporation (director) 2. The Chubb Corporation (director) 3. Exxon Mobile Corporation (director) 4. US-China Business Council (director) 5. Liberty Science Center Chairman’s Advisory Council (Chairman’s Advisory Council) 6. Quinnipiac University (member of the Board of Trustees) 7. CEO Roundtabl on Cancer (member) 8. Healthcare Leadership council (member) 9. Sullivan Commission on Diversity in the Health Profession Workforce (member)

No

4. Laban P. Jackson, Jr. 70 Yes 1993 1. Clear Creek Properties (chairman)

2. Markey Cancer Foundation (director) 3. Audit Committee Leadership Network (member)

Yes

5 David M. Cote152

60 Yes 2007 1. Honeywell International Inc (Chairman and CEO) 2. Kohlberg Kravis Robet (advisor) 3. US-India CEO Forum (co-chair) 4. Business Roundtable (member)

No

6. James Schine Crown

59 Yes 1991 1. Henry Crown and Company 2. General Dynamics Corporation (director) 3. University of Chicago Medical Center (trustee) 4. Museum of Science and Industry (trustee) 5. Aspen Institute (trustee) 6. University of Chicago (trustee) 7. The Chicago Symphony Orchestra (trustee)

Yes

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* these commitments were not mentioned on company website or in the related reports

Independent Director Experience Profiles

1. Lee. R. Raymond

Mr. Raymond was Chairman of the Board and Chief Executive Officer of ExxonMobil from 1999 until he retired in December 2005. ExxonMobil’s principal business is energy, involving exploration for and production of crude oil and natural gas, manufacture of petroleum and petrochemical products, and transportation and sale of crude oil, natural gas, petroleum and petrochemical products. He had been Chairman of the Board and Chief Executive Officer of Exxon Corporation from 1993 until its merger with Mobil Oil Corporation in 1999, having begun his career in 1963 with Exxon. He was a director of Exxon Mobil Corporation (1984–2005). Mr. Raymond graduated from the University of

153 She served on the board until July 19 2013, http://investing.businessweek.com/research/stocks/private/person.asp?personId=546655&privcapId=4257100

8. World Business Chicago (board member)* 9. American Academy of Arts and Sciences (member_

7. Timothy Patrick Flynn 56 Yes 2012 1. Wal Mart Stores, Inc (director)

2. University of St. Thomas (member of the board of trustees) 3. The New York City’s YMCA (board member emeritus)*

Yes

8. Ellen V. Futter153

63 Yes 2001 1. American Museum of Natural History (president) 2. Memorial Sloan-Ketering Cancer Center (member of the board of Overseers and Managers) 3. Brookings Institution (trustee) 4. American Ditchley Foundation (director) 5. NYC & Company (director) 6. American Academy of Arts an Sciences (Fellow) 7. Council on Foreign Relations (member)

Yes

9. James A. Bell 64 Yes 2011 1. The Dow Chemical Co (director)

2. Chicago Urban League (member of the board of directors) 3. Chicago Economic Club (member of the board of directors)

No

10. Stephan B. Burke

54 Yes 2004 1. NBC Universal LLC (CEO) 2. Comcast Corporation (Executive Vice President) 3. Berkshire Hathaway Inc (director) 4. Children’s Hospital of Philadelphi (Chairman)

No

11. Crandall Close Bowles

65 Yes 2006 1. Spring Industries Inc ( CEO Until june 2013) 2. Brookings Institution (trustee( 3. Packard Center for ALS Research at Johns Hopkins (member of the governing board) 4. The Wilderness Society (member of the governing board) 5. Deere & Co (director) 6. Carolina Thread Trail (member of the governing board)*

No

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Wisconsin in 1960 and received a Ph.D. from the University of Minnesota in Chemical Engineering in 1963. He is a director of the Business Council for International Understanding, a Trustee of the Wisconsin Alumni Research Foundation, a Trustee of the Mayo Clinic, a member of the Innovations in Medicine Leadership Council of UT Southwestern Medical Center, a member of the National Academy of Engineering and a member and past Chairman of the National Petroleum Council. During his long tenure at Exxon Mobil and its predecessors, Mr. Raymond gained important experience in all aspects of business management, including audit and financial reporting, risk management, executive compensation, marketing, and operating in a regulated industry. He has extensive international business experience. 2. William C. Weldon

Mr. Weldon was Chairman and Chief Executive Officer of Johnson & Johnson from 2002. He retired as Chief Executive Officer in April 2012 and as Chairman in December 2012. He served as Vice Chairman from 2001 and Worldwide Chairman, Pharmaceuticals Group from 1998 until 2001. Johnson & Johnson is engaged worldwide in the research and development, manufacture and sale of a broad range of products in the health care field. The company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being. Mr. Weldon is a director of CVS Caremark Corporation (since March 29, 2013). Mr. Weldon served in a number of other senior executive positions since joining Johnson & Johnson in 1971. In 1982 he was named manager, ICOM Regional Development Center in Southeast Asia. Mr. Weldon was appointed executive vice president andmanaging director of Korea McNeil, Ltd., in 1984 and managing director of Ortho-Cilag Pharmaceutical, Ltd., in the U.K. in 1986. In 1989, he was named vice president of sales and marketing at Janssen Pharmaceutica in the U.S., and in 1992 he was appointed president of Ethicon Endo-Surgery. Mr. Weldon was a director of Johnson & Johnson (2002 until December 2012). Mr. Weldon graduated from Quinnipiac University in 1971. Mr. Weldon is a member of the CEO Roundtable on Cancer, a director of the US-China Business Council, a member of the Healthcare Leadership Council, and a member of the Sullivan Commission on Diversity in the Health Professions Workforce. Mr. Weldon also serves on the Liberty Science Center Chairman’s Advisory Council and as a member of the Board of Trustees for Quinnipiac University. He previously served as Chairman of the Pharmaceutical Research and Manufacturers of America. Mr. Weldon has experience managing a large complex organization at Johnson & Johnson, where he has dealt with such issues as audit and financial reporting, risk management, and executive compensation. Through his role at various Johnson & Johnson entities, he has had extensive exposure to international business management and to operating in a regulated industry, and he has gained expertise in sales and marketing to consumers. His extensive record of charitable involvement and public service also brings an important perspective to his role on the Board. 3. Laban P. Jackson, Jr.

Mr. Jackson has been Chairman of Clear Creek Properties, Inc., a real estate development company, since 1989. He is a director of J.P. Morgan Securities plc and of JPMorgan Chase Bank, N.A., wholly-owned subsidiaries of the Firm (since 2010). He previously served as director of The Home Depot (2004–2008). Mr. Jackson graduated from the United States Military Academy in 1965. He was a director of the Federal Reserve Bank of Cleveland (1987–1992). Mr. Jackson is also a director of Markey Cancer Foundation. Mr. Jackson has founded and managed businesses and is an experienced entrepreneur and manager. In that capacity, and through his current and prior service on other public company boards, he has dealt with a wide range of issues that are important to the Firm’s business, including audit and financial reporting, risk management, executive compensation, marketing and product development. His service on the board of the Federal Reserve Bank of Cleveland has given him experience dealing with government officials and agencies and further experience in financial services. Mr. Jackson is a member of the Audit Committee Leadership Network (“ACLN”), a group of audit committee chairs from some of North America’s leading companies, committed to improving the performance of audit committees and helping to enhance trust in the financial markets. 4 David M. Cote

Mr. Cote is Chairman and Chief Executive Officer of Honeywell International Inc., a diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; and specialty materials. He was elected President and Chief Executive Officer in February 2002, and was named Chairman of the Board in July 2002. Prior to joining Honeywell, he served as Chairman, President and Chief Executive Officer of TRW Inc., which he joined in 1999 after a 25 year career with General Electric. Mr. Cote is a director of Honeywell International Inc. (since 2002).

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Mr. Cote graduated from the University of New Hampshire in 1976. In 2010, he was named by President Obama to serve on the bipartisan National Commission on Fiscal Responsibility and Reform. Mr. Cote was named co-chair of the U.S.-India CEO Forum by President Obama in 2009, and has served on the Forum since July 2005. Mr. Cote is a member of The Business Roundtable and serves on an advisory panel to Kohlberg Kravis Roberts & Co. At Honeywell and TRW, Mr. Cote gained experience dealing with a variety of issues relevant to the Firm’s business, including audit and financial reporting, risk management, executive compensation, sales and marketing of industrial and consumer goods and services, and technology matters. He also has extensive experience in international business issues and public policy matters. His record of public service further enhances his value to the Board. 5. James Schine Crown

Mr. Crown joined Henry Crown and Company, a privately owned investment company which invests in public and private securities, real estate and operating companies, in 1985 as Vice President and became President in 2002. Mr. Crown is a director of General Dynamics Corporation (since 1987). He is also a director of JPMorgan Chase Bank, N.A., a wholly-owned subsidiary of the Firm (since 2010). He previously served as a director of Sara Lee Corporation (1998–2012). Mr. Crown graduated from Hampshire College in 1976 and received his law degree from Stanford University Law School in 1980. Following law school, Mr. Crown joined Salomon Brothers Inc. and became a vice president of the Capital Markets Service Group in 1983. In 1985 he joined his family’s investment firm. He is a Trustee of the University of Chicago Medical Center, the Museum of Science and Industry, The Aspen Institute, the University of Chicago, and the Chicago Symphony Orchestra. He is a member of the American Academy of Arts and Sciences. Mr. Crown’s position with Henry Crown and Company and his service on other public company boards have given him exposure to many issues encountered by the Firm’s Board, including audit and financial reporting, investment management, risk management, and executive compensation. His legal training gives him enhanced perspective on legal and regulatory issues. He is experienced in investment banking and capital markets matters through his prior work experience and subsequent responsibilities. The broad range of his philanthropic activities, in the Chicago area in particular, gives him important insight into the community concerns of one of the Firm’s largest markets. 6. Timothy Patrick Flynn

Mr. Flynn was Chairman of KPMG International from 2007 until his retirement in October 2011. KPMG International is a professional services organization which provides audit, tax and advisory services in 152 countries. He was also Chairman (2005–2010) and Chief Executive Officer (2005–2008) of KPMG LLP, the U.S. and largest individual member firm of KPMG International. Mr. Flynn is a director of Wal-Mart Stores, Inc. (since 2012). Mr. Flynn held a number of key leadership positions throughout his 32 years at KMPG, providing him with perspective on the issues facing major companies and the evolving business environment. Additionally, he has extensive experience in financial services and risk management. Prior to serving as Chairman and Chief Executive Officer, Mr. Flynn served, among other positions, as Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for the audit practice, as well as the Risk Advisory and Financial Advisory Services practices. Mr. Flynn holds a bachelors degree in accounting from The University of St. Thomas, St. Paul, Minnesota and is a member of their Board of Trustees. He has previously served as a trustee of the Financial Accounting Standards Board, a member of the World Economic Forum’s International Business Counsel, and a founding member of The Prince of Wales’ International Integrated Reporting Committee. Mr. Flynn combines leadership and business experience in a global setting with experience in accounting, auditing, financial services, risk management and regulatory affairs. 7. Ellen V. Futter

Ms. Futter became President of the American Museum of Natural History in 1993, prior to which she had been President of Barnard College since 1981. The Museum is one of the world’s preeminent scientific, educational and cultural institutions. Her career began at Milbank, Tweed, Hadley & McCloy where she practiced corporate law. Ms. Futter is a director of Consolidated Edison, Inc. (since 1997) and was previously a director of American International Group Inc. (1999–2008) and Viacom (2006–2007). She was a director of the Federal Reserve Bank of New York (1988–1993) and served as its Chairman (1992–1993). Ms. Futter graduated from Barnard College in 1971 and earned a law degree from Columbia Law School in 1974. She is a member of the Board of Overseers and Managers of Memorial Sloan-Kettering Cancer Center, a Fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations. Ms. Futter is also a

60

trustee of the Brookings Institution, and a director of The American Ditchley Foundation and NYC & Company. Ms. Futter has managed large educational and not-for-profit organizations, Barnard College and the American Museum of Natural History, and in that capacity, she has dealt with many complex organizational issues. Such work and her service on public company boards and the board of the Federal Reserve Bank of New York have given her experience with regulated enterprises, in particular the financial services industry, and with risk management, executive compensation, and audit and financial reporting. In her role at the Federal Reserve Bank of New York she also acquired valuable experience dealing with government officials and agencies. Her years of practicing corporate law give her enhanced perspective on legal and regulatory issues. Her extensive experience with philanthropic organizations provides her with insights that are relevant to the Firm’s corporate responsibility initiatives. 8. James A. Bell

Mr. Bell was an Executive Vice President of The Boeing Company, the world’s largest aerospace company, from 2003 until his retirement in April 2012. He had been Corporate President from June 2008 until February 2012 and was Chief Financial Officer from November 2003 until February 2012. While Chief Financial Officer, he oversaw two key Boeing businesses, Boeing Capital Corporation, the company’s customer-financing subsidiary, and Boeing Shared Services, an 8,000-person, multi-billion dollar business unit that provides common internal services across Boeing’s global enterprise. He is a director of Dow Chemical Company (since 2005). Prior to being named Chief Financial Officer in 2003, Mr. Bell held the position of Senior Vice President of Finance and Corporate Controller from 2000 and was Vice President of contracts and pricing for Boeing Space and Communications from 1996 to 2000. Before becoming Vice President at the operating group level in 1996, Mr. Bell served as director of business management of the Space Station Electric Power System at the Boeing Rocketdyne unit. Mr. Bell began his career with Rockwell in 1972. Mr. Bell graduated California State University at Los Angeles with a degree in accounting. He is a member of the board of directors of the Chicago Urban League and the Chicago Economic Club. Mr. Bell has had global business and leadership experience overseeing business performance and strategic growth initiatives at Boeing. His finance and accounting expertise included experience with and direct involvement and supervision in the preparation of financial statements and risk management. As CFO, he was responsible for overall financial management of the company, its financial reporting and transparency, and for multiple corporate functions including Controller, Treasury, long-range planning and corporate and strategic development. In his position as Senior Vice President of Finance and Corporate Controller he served as the company’s principal interface with the board’s audit committee. 9. Stephan B. Burke

Mr. Burke has been Chief Executive Officer of NBCUniversal, LLC and Executive Vice President of Comcast Corporation since January 2011. He had been Chief Operating Officer of Comcast Corporation, one of the nation’s leading providers of entertainment, information and communication products and services, from 2004 until 2011, and was President of Comcast Cable Communications, Inc. from 1998 until January 2010. Before joining Comcast, he served with The Walt Disney Company as President of ABC Broadcasting. Mr. Burke joined The Walt Disney Company in January 1986, where he helped to develop and found The Disney Store and helped to lead a comprehensive restructuring effort of Euro Disney S.A. Mr. Burke is a director of Berkshire Hathaway Inc. (since 2009). Mr. Burke graduated from Colgate University in 1980 and received an MBA from Harvard Business School in 1982. He is Chairman of The Children’s Hospital of Philadelphia. Mr. Burke’s roles at Comcast, ABC Broadcasting, and Euro Disney, have given him broad exposure to the challenges associated with managing a large and diverse business. In those roles he has dealt with a variety of issues including audit and financial reporting, risk management, executive compensation, sales and marketing, and technology and operations. In addition, Comcast and ABC Broadcasting have provided him with experience working in regulated industries and Euro Disney has given him international business experience. 10. Crandall Close Bowles

Ms. Bowles has been Chairman of Springs Industries, Inc., a manufacturer of window products for the home, since 1998 and a member of its board since 1978. From 1998 until 2006, she was also Chief Executive Officer of Springs Industries, Inc. Subsequent to a spinoff and merger in 2006, she was Co-Chairman and Co-CEO of Springs Global Participacoes S.A., a textile home furnishings company based in Brazil, until July 2007. Ms. Bowles is a director of

61

Deere & Company (since 1999 and previously from 1990 to 1994). She previously served as a director of Sara Lee Corporation (2008-2012) and of Wachovia Corporation (1991–1996).Ms. Bowles graduated from Wellesley College in 1969 and earned an MBA from Columbia University in 1973. She is a trustee of the Brookings Institution and is on the governing boards of the Packard Center at Johns Hopkins and The Wilderness Society. Ms. Bowles has extensive experience managing large complex business organizations at Springs Industries, Inc. and Springs Global Participacoes S.A. At those companies, and through her current and prior service on other public company boards, she has dealt with a wide range of issues including audit and financial reporting, risk management, executive compensation, international business, and sales and marketing of consumer products and services. Her philanthropic activities give her valuable perspective on important societal and economic issues relevant to the Firm’s business.

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Exhibit B: Bank of America

Name Board Members Age Independent Director Since Other Board Commitments Experience

1. Brian T. Moynihan 53 No 2010 N/A -

2. Charles. O. Holiday Jr.

65 Yes 2009 1. CH2M HILL Companies, Ltd. (employee owned) (serves on the board) 2. Deere and Company (serves on the board) 3. Royal Dutch Shell plc (serves on the board) 4. World Business Council for Sustainable Development (chairman) 5. World Wildlife Fund, Inc (member of the board of directors)* 6. National Academy of Engineering (Chairman) 7. US Council on competitiveness (Chairman Emeritus) 8. Sustainable Energy for All (Chair of the Executive Committee) 9. Catalyst (Chairman Emeritus)

No

3. Linda. P. Hudson

62 Yes 2012 1. BAE Systems Inc (president and CEO) 2. The University of Florida Foundation, Inc.(member of the board of directors) 3. University of Florida Engineering Leadership Institute (member of the board of directors) 4. Smithsonian National Air and Space Museum (member of the board of directors)

No

4. Sharon L. Allen 61 Yes 2012 1. YMCA of the USA (chair of the National Board of Directors)

2. Autry National Center (trustee)* No

5 Monica C. Lozano

56 Yes 2006 1. ImpreMedia LLC (chairman and CEO and member of the board of directors) 2. The Walt Disney Company (director) 3. University of Southern California (member of the board of trustees) 4. The Rockerfeller Foundation (member of the board of trustees)* 5. Weingart Foundation (member of the board of directors)*

No

6. Susan S, Bies 66 Yes 2009 1. Zurich Holding Company of America (director)*

2. Zurich Insurance Group (director) 3. Zurich Financial Services ltd. (director)*

Yes

7. Thomas J. May

66 Yes 2004 1. Northeast Utilities (President and CEO) 2. Greater Boston Chamber of Commerce (member of the board)* 3. Liberty Mutual Holding Company Inc. (director) 4. John F. Kennedy Library Foundation (member of the board)* 5.Stonehill College (chair of the board of trustees)*

No

8. Jack O. Bovender, Jr. 67 Yes 2012 1. Duke University (Vice Chair Board of Trustees and chairs its audot No

63

* these commitments were not mentioned on company website or in the related reports

Independent Directors Expertise and Qualifications: 1. Charles. O. Holiday Jr.

Professional Highlights: • Mr. Holliday served as Chief Executive Officer of E.I. DuPont de Nemours and Company (DuPont), a global chemical and life sciences company, from January 1998 until December 2008 and as Chairman from January 1999 to December 2009. He joined DuPont in 1970 and held various positions during his tenure at the company.

commitee) 2. The Nashville Symphony Association (member of the board of directors)* 3. Duke University Health System Inc. (member of the board of directors)

9. Frank P. Bramble, Sr. 64 Yes 2006 Towson Univeristy (emeritus member of the Board of Visitors) Yes

10. Lionel L. Nowell

58 Yes 2013 1.American Eletrical Power Company Inc (director) 2. Reynolds American Inc. (director) 3. The Ohio State University Fisher College of Business (Dean’s Advisory Board)

No

11. Arnold W. Donald

58 Yes 2013 1. Carnaval Corporation and Carnival plc (subsidiary) (serves on the board) 2. Crown Holdinds Inc (serves on the board) 3. The Laclede Group Inc (serves ont he board) 4. United Way of Greater St. Louis (member of the board)* 5. Dhr. International Inc (board member)* 6. Barnes Jewish Hospital (board member)* 7. Saint Louis Science Center (Trustee)* 8. Missouri Botanical Garden (member of the board of trustees)* 9. Washington University (serves on the board) 10. Carleton College (serves on the board) 11. BJC Healthcare (serves on the board) 12. Global Velocity (member of the board)* 13. AWDPLC, LLC (investor)

No

12. R. David Yost

65 Yes 2012 1. Exelis Inc (director) 2. Marsh & McLennan Companies Inc (director) 3. Tyco International ltd. (director) 4. International Federation of Pharmaceutical Wholesalers (member of the board of directors)

13. Charles K. Gifford 70 No 2004 N/A

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Other Leadership Experience and Service: • Mr. Holliday serves as: Chairman of the World Business Council for Sustainable Development; Chair of the Executive Committee of Sustainable Energy for All, an initiative sponsored by the United Nations and The World Bank to bring energy access, efficiency and renewable resources to the world; and Chairman of the National Academy of Engineering, an honorary organization established by Congress whose members include over 2,000 of the most outstanding engineers in the U.S. • He also serves as Chairman Emeritus of the U.S. Council on Competitiveness and Chairman Emeritus of Catalyst. Qualifications, Attributes and Skills: Through his tenure with DuPont, Mr. Holliday gained extensive experience leading large, complex, multi-national operations, managing risk and strategic planning and marketing to a varied customer base. His continued service as Chairman of DuPont’s board following his retirement as Chief Executive Officer offers him a perspective relevant to his current role as our independent Board Chairman. Mr. Holliday’s recognition as an international business leader, serving as Chairman of the World Business Council for Sustainable Development, an organization that brings the international business community together to create a sustainable future for business, society and the environment, gives him a unique perspective on sustainability issues impacting our company in the future global marketplace. His service as Chairman Emeritus of the U.S. Council on Competitiveness, a non-partisan, non-governmental organization working to ensure U.S. prosperity, provides him with a unique insight into our company’s long-term competitive challenges. In addition, Mr. Holliday was a founding member of the International Business Council, furthering his leadership of and experience with large global organizations. 2. Linda. P. Hudson

Professional Highlights: • In October 2009, Ms. Hudson was appointed President and Chief Executive Officer of BAE Systems, Inc. (BAE), a U.S.-based subsidiary of BAE Systems plc (BAE Systems), a global defense, aerospace and security company headquartered in London. • Ms. Hudson also previously served as President of BAE Systems’ Land and Armaments operating group, the world’s largest military vehicle and equipment business, from October 2006 to October 2009. • Prior to joining BAE, Ms. Hudson worked at General Dynamics Corporation and was President of its Armament and Technical Products business. In her approximately 40-year career, she has held various positions in the defense and aerospace industry in engineering, production operations, program management and business development for such companies as Martin Marietta Corporation, Lockheed Martin Corporation, Ford Aerospace and Harris Corporation. • She is currently a member of the executive committee and serves as an executive director of BAE Systems. She is also a member of the Board of Directors of BAE Systems and BAE. Other Leadership Experience and Service: • Ms. Hudson is a member of the Board of Directors of the University of Florida Foundation, Inc. and the University of Florida Engineering Leadership Institute. • She also is a member of the Board of Directors of the Smithsonian National Air and Space Museum. Qualifications, Attributes and Skills: As President and Chief Executive Officer of BAE, Ms. Hudson has broad experience in strategic planning and risk management. Ms. Hudson’s tenure as an executive director of BAE Systems provides her with a unique international perspective and experience as a leader of a large, international, highly-regulated, complex business. Ms. Hudson’s career in the defense and aerospace industry gives her extensive experience with technology and particular insight into technology concerns.

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3. Sharon L. Allen

Professional Highlights: • From 2003 until her retirement in May 2011, Ms. Allen served as Chairman of Deloitte LLP (Deloitte), a firm that provides audit, consulting, financial advisory, risk management and tax services as the U.S. member firm of Deloitte Touche Tohmatsu Limited. • She worked at Deloitte for nearly 40 years in various leadership roles at the firm, including partner and regional managing partner, and was previously responsible for audit and consulting services for a number of Fortune 500 and large private companies. • Ms. Allen was also a member of the Global Board of Directors, Chair of the Global Risk Committee and U.S. Representative on the Global Governance Committee of Deloitte Touche Tohmatsu Limited from 2003 to May 2011. Other Leadership Experience and Service: • Ms. Allen serves as Chair of the National Board of Directors of the YMCA of the USA, a leading nonprofit organization for youth development, healthy living and social responsibility. • She served as Chair of the Audit Committee and as a board member of Catalyst Inc. (Catalyst), a leading nonprofit organization dedicated to expanding opportunities for women and business. • Ms. Allen was appointed by President Bush to the President’s Export Council. Qualifications, Attributes and Skills: Ms. Allen’s responsibility for audit and consulting services in various positions with Deloitte provide her with extensive audit, financial reporting and corporate governance experience. Her leadership positions with Deloitte give her broad management experience of large, complex businesses and an international perspective on risk management and strategic planning.

4 Monica C. Lozano

Professional Highlights: • Ms. Lozano has served as Chairman since July 2012 and Chief Executive Officer since May 2010 of ImpreMedia, LLC (ImpreMedia), a leading Hispanic news and information company. She also was Senior Vice President of ImpreMedia from January 2004 to May 2010. • She also serves as a member of the Board of Directors of ImpreMedia. • Ms. Lozano has served as Publisher of La Opinion, a subsidiary of ImpreMedia, since 2004 and was Chief Executive Officer from 2004 to July 2012. Other Leadership Experience and Service: • She served as a member of President Obama’s Council on Jobs and Competitiveness from 2011 to 2012 and President Obama’s Economic Recovery Advisory Board from 2009 to 2011. • Ms. Lozano serves as a member of the Board of Trustees of the University of Southern California, and was a member of the Board of Regents of the University of California and the State of California Commission on the 21st Century Economy. Qualifications, Attributes and Skills: Ms. Lozano is the Chairman and Chief Executive Officer of a leading Hispanic news and information company. In this role she has dealt with a wide range of issues such as operations management, marketing, strategic planning and an understanding of issues that are important to a growing U.S. demographic. Her public company board service for The Walt Disney Company and her role with the University of Southern California gives her board-level experience overseeing large organizations with diversified operations and the range of issues that these types of companies have such as governance, risk management and financial reporting. Ms. Lozano’s experience as a member of President Obama’s Council on Jobs and Competitiveness also gives her valuable perspective on important public policy, societal and economic issues relevant to our company.

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5. Susan S, Bies

Professional Highlights: • Ms. Bies has served as a Senior Advisory Board Member to Oliver Wyman Group, a management consulting subsidiary of Marsh & McLennan Companies, Inc., since February 2009. • She is a former member of the Board of Governors of the Federal Reserve System, serving in that capacity from 2001 to 2007. • Ms. Bies served as a member of the Emerging Issues Task Force of the Financial Accounting Standards Board (FASB) from 1996 to 2001. • Ms. Bies previously held various leadership roles, including Executive Vice President of risk management, Auditor and Chief Financial Officer, at First Tennessee National Corporation (First Tennessee), a regional bank holding company, where she was employed from 1979 to 2001. At First Tennessee, she also served as Chair of the Asset Liability Management Committee and Executive Risk Management Committee. • Ms. Bies currently serves as a director of Zurich Insurance Group Ltd. • She began her career as a regional and banking structure economist at the Federal Reserve Bank of St. Louis. Qualifications, Attributes and Skills: Both Ms. Bies’ role as a Federal Reserve System Governor and her tenure with First Tennessee provide her with broad expertise in consumer banking, financial regulation and risk management. In particular, Ms. Bies focused on enterprise financial and risk management during her career with First Tennessee and further expanded her regulatory expertise by serving on FASB’s Emerging Issues Task Force. Her experience with a primary regulator of our company, as well as her other regulatory and public policy experience, give her a unique and valuable perspective relevant to our company’s business, financial performance and risk oversight.

6. Thomas J. May

Professional Highlights: • Mr. May became President and Chief Executive Officer of Northeast Utilities, one of the nation’s largest utilities serving 3.5 million customers in three states, in April 2012. • He was the Chairman and Chief Executive Officer of NSTAR, a Northeast Utilities predecessor, from 1999 to April 2012 and President from 2002 to April 2012. He also served as Chief Financial Officer and Chief Operating Officer during his tenure at Northeast Utilities’ predecessor companies. • Mr. May currently serves as a director of Liberty Mutual Holding Company, Inc. Qualifications, Attributes and Skills: As Chief Executive Officer and President of Northeast Utilities, and the former Chairman, Chief Executive Officer, President, Chief Financial Officer and Chief Operating Officer of Northeast Utilities’ predecessor companies, Mr. May has experience with regulated businesses, operations, risk management, business development, strategic planning and corporate governance matters, which gives him a unique insight into the issues facing our company’s businesses today. In addition, as a Certified Public Accountant, Mr. May brings strong accounting and financial skills, which give him a professional perspective on financial reporting and enterprise and operational risk management.

7. Jack O. Bovender, Jr.

Professional Highlights: • Mr. Bovender served as Chairman of HCA, Inc. (HCA), one of the largest for-profit U.S. hospital operators, from January 2002 to December 2009 and was Chief Executive Officer from January 2001 to January 2009. During his tenure at HCA, he also served as President and Chief Operating Officer. • Mr. Bovender began his career in hospital administration in the U.S. Navy.

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Other Leadership Experience and Service: • Mr. Bovender is Vice Chair of the Duke University Board of Trustees and chairs its audit committee. • He also serves on the Duke University Healthcare System’s Board of Directors. Qualifications, Attributes and Skills: As a Chairman, Chief Executive Officer, President and Chief Operating Officer of HCA, Mr. Bovender has extensive experience leading a large, regulated, complex business. Mr. Bovender’s experience with HCA and service on the Board of Trustees of Duke University and its audit committee provide him with insight into risk management, operational risk and strategic planning; and a valuable perspective on corporate governance issues.

8. Frank P. Bramble, Sr.

Professional Highlights: • Mr. Bramble served as Vice Chairman, from July 2002 to April 2005, and advisor to the executive committee, from April 2005 to December 2005, of MBNA Corporation, a financial services company acquired by Bank of America in January 2006. • He previously served as the Chairman and Chief Executive Officer at Allfirst Financial, Inc. and held executive leadership positions at MNC Financial Inc., Maryland National Bank, American Security Bank and Virginia Federal Savings Bank. • Mr. Bramble also served as a director, from April 1994 to May 2002, and Chairman, from December 1999 to May 2002 of Allfirst Financial, Inc. and Allfirst Bank, U.S. subsidiaries of Allied Irish Banks, plc. • He began his career as an audit clerk at the First National Bank of Maryland. Other Leadership Experience and Service: • He is an emeritus member of the Board of Visitors of Towson University, where he was also a lecturer from 2006 to 2008. Qualifications, Attributes and Skills: Mr. Bramble brings broad ranging financial services expertise as well as historical insight to our Board, having held leadership positions at two financial service companies acquired by our company (MBNA Corporation, acquired in 2006, and MNC Financial Inc., acquired in 1993). As a former executive officer of one of the largest credit card issuers in the U.S. and a major regional bank, he has dealt with a wide range of issues of importance to our company, including credit cycles; sales and marketing of consumers; audit and financial reporting; and risk management.

9. Lionel L. Nowell

Professional Highlights: • Mr. Nowell served as Senior Vice President and Treasurer of PepsiCo, Inc. (Pepsi), a leading global food, snack and beverage company, from 2001 to May 2009. He previously served as Chief Financial Officer of The Pepsi Bottling Group and as Controller of Pepsi. • Prior to joining Pepsi, Mr. Nowell served as a Strategy and Business Development Executive at RJR Nabisco, Inc. • He held various senior financial roles at the Pillsbury division of Diageo Plc, including Chief Financial Officer of its Pillsbury North America, Pillsbury Foodservice and Haagen-Dazs divisions, and also served as Controller and Vice President of internal audit of the Pillsbury Company. Other Leadership Experience and Service: • Mr. Nowell serves on the Dean’s Advisory Board at The Ohio State University Fisher College of Business. Qualifications, Attributes and Skills: Mr. Nowell’s role as Treasurer of Pepsi provides him with extensive experience in risk management and strategic planning, as well as strong financial skills. His public company board service gives him experience in financial reporting and accounting with large international and regulated businesses. Mr. Nowell’s experience on the Advisory Board at a large, public university provides him with further expertise with large, complex organizations.

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10. Arnold W. Donald

Professional Highlights: • Mr. Donald is an investor at AWDPLC, LLC, a private investment firm that he founded. • Mr. Donald previously served as President and Chief Executive Officer from November 2010 to June 2012 of The Executive Leadership Council, a not-for-profit organization providing a professional network and business forum to African-American executives at major U.S. companies. • From 2000 to 2003, Mr. Donald served as Chairman and Chief Executive Officer of Merisant Company, a privately held global manufacturer of tabletop sweeteners, and he remained Chairman until 2005. • He joined Monsanto Company in 1977, where over his 20-year tenure he held several senior leadership positions with global responsibilities including President of its Agricultural Group and President of its Nutrition and Consumer Sector. • Mr. Donald is a prior President and Chief Executive Officer of the Juvenile Diabetes Research Foundation International where he served from January 2006 to February 2008. Other Leadership Experience and Service: • Mr. Donald serves on the not-for-profit boards of Carleton College, Washington University in St. Louis and BJC HealthCare. • Mr. Donald was appointed by President Clinton and re-appointed by President Bush to the President’s Export Council. Qualifications, Attributes and Skills: As a former senior executive at Monsanto Company and as a former Chairman and Chief Executive Officer of Merisant Company, Mr. Donald has extensive experience in strategic planning and operations in retail and distribution businesses. In addition, his board service with public companies gives him experience with risk management, global operations and regulated businesses. His service as a former President and Chief Executive Officer of The Executive Leadership Council and the Juvenile Diabetes Research Foundation International give him a unique perspective on governance matters, social responsibility and diversity. 11. R. David Yost

Professional Highlights: • Mr. Yost served as Chief Executive Officer of AmerisourceBergen Corporation (AmerisourceBergen), a pharmaceutical services company providing drug distribution and related services to healthcare providers and pharmaceutical manufacturers, from 2001 until his retirement in July 2011 and as President from 2001 to 2002 and again from September 2007 to November 2010. • He has held various positions at AmerisourceBergen and predecessor companies, including Chief Executive Officer of Amerisource Health Corporation, during a nearly 40-year career. Qualifications, Attributes and Skills: As Chief Executive Officer of AmerisourceBergen and its predecessor company, Mr. Yost has broad experience in strategic planning, risk management and operational risk. Mr. Yost has experience leading a large, complex business. And, through his experience on public company boards, he has board- level experience overseeing large, complex public companies in various industries, which provides him with valuable insights on corporate governance and risk management.

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Exhibit C: CitiGroup

Name Age Independent Director Since Other Board Commitments Experience

Michael L. Corbat 52 No N/A -

Franz B. Humer 66 Yes 1. Roche Holding ltd (Chairman) 2. Diageo plc (Chairman) 3. Friends of Phelophepa Foundation (Chairman) 4. INSEAD (Chairman) 5. International Centre for Missing and Exploited Childeren (Chairman) 6. Salzburg University (Member of the Board) 7. Jacobs Holding AG (Member of the Board)

No

Robert L. Joss 71 No N/A -

Michael E. O’Neill

66 Yes 1. FT Ventures (Advisory Board) 2. The Honolulu Museum of Arts (Trustee) 3. University of Virginia, Darden Fraduate School of Business Foundation (Trustee) 4. The Export-Import Bank of the Unites States (Member Advisory Board)

Yes

Gary M. Reiner No N/A -

Judith Rodin

68 Yes 1. Rockerfeller Foundation (President) 2. University of Pennsylvania (President Emerita) 3. Comcast Corporation 4. AMR Corporation 5. World Trade Memorial Foundation (Director) 6. Carnegie Hall (director) 7. White House Project (Member) 8. Council on Foreign Relations (Member) 9. National Academy of Sciences Institute of Medice (member)

No

Robert L. Ryan 69 Yes 1. General Mills

2. Stanley Black & Decker 3. Cornell University (trustee)

No

Anthony M. Santomero

66 Yes 1. RenaissanceRe Holdings, Ltd 2. Penn Mutal Life Insurance Company 3. Colombia Funds 4. Ben Franklin Technology Partners of Southeast Pennsylvania (Director)

Yes

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Joan E. Spero

68 Yes 1. Colombia University School of International and Public Affairs (Senior Research Scholar) 2. IBM 3. International Paper 4. Council of American Ambassadors (member) 5. Academy of Doplomacy (member) 6. American Philosophical Society (member) 7. Wisconsin Alumni Research Foundation (trustee) 8. International Center for Transitional Justice (trustee) 9. Colombia University (trustee emeritus) 10. Amherst College (trustee emeritus) 11. Council of Foreign Relations (trustee emeritus) 12. Brookings Institution (trustee emeritus)

Yes

Diana L. Taylor

58 Yes 1. Wikfensohn Fund Management, L.P. (Managing Director_ 2. Brookfield Asset Management 3. Sotheby’s 4. Accion International (Chair) 5. AMFAR (secretary) 6. Colombia Business School (Board of Overseers) 7.Darthmouth College (trustee) 8. GEMs Hudson River Park Trust (chair) 9. International Women’s Health Coalition (Treasurer) 10. Mailman School of Public Health (Board of Overseers) 11. New York Women’s Foundaton (Chair) 12. The After School Corporation (member) 13. Economic Club of New York, Council on Foreign Relations (member) 14. YMCA of Greater New York (Chair)

Yes

William S. Thompson, Jr

67 Yes 1. Pacific Life Corporation 2. Pacific Symphony Orchestra (Life Director) 3. Thompson Foundation for Autism (Chair) 4. Thompson Family Foundation (President) 5. University of Missouri (President’s Financial Advisory Council) 6. Orange County Community Foundation (Advisory Director)

No (not current)

James S. Turley No N/A -

Ernesto Zedillo

61 Yes 1. Center for the Study of Globalization (Director) 2. Professor in the Field of International Economics and Politics at Yale University 3.Alcoa Inc

No (not current)

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Independent Director Experience Profiles

1. Franz B. Humer

Mr. Humer is an experienced executive and has been nominated to serve on the Board because of his extensive experience in the areas of International and Consumer Business, Risk Management, Financial Reporting, Compensation, Regulatory Compliance and Corporate Governance. Mr. Humer gained extensive experience in international and consumer business, risk management, compensation, regulatory compliance, financial reporting and corporate governance in his roles as CEO and Chair of Roche Holding and other executive positions at Roche, his roles as an executive at GlaxoSmithKline Plc and Schering Plough as well as in his service as Chair of Diageo plc. With his many years of experience leading large complex organizations in the U.S. and in Europe in an extensively regulated industry, Mr. Humer is able to offer insights in the implementation of business strategies in major global markets, advice on regulatory compliance, and to provide strategic guidance on the development and expansion of important franchises and brands. As a member of the International Advisory Board of Allianz, and as a member of several philanthropic organizations he is able to provide important perspectives on international and consumer business and corporate affairs. 2. Michael E. O’Neill

154

Chairman, Citigroup Inc. – 2012 to Present Chairman, Chief Executive Officer and Director, Bank of Hawaii Corporation — 2000 to 2004 Elected Chief Executive Officer, Barclay’s PLC — 1999 Vice Chairman and Chief Financial Officer, Bank of America — 1995 to 1998 Chief Financial Officer, Continental Bank — 1993 to 1995 Director of Citigroup since 2009 Director of Citibank, N.A. from 2009 to April 2012

Mr. O’Neill is an experienced financial services executive and has been nominated to serve on the Board because of his extensive experience in the areas of Financial Services, International Business, Corporate and Consumer Business, Regulatory Compliance, Risk Management and Financial Reporting. As the former Chairman and Chief Executive Officer of the Bank of Hawaii, Vice Chairman and Chief Financial Officer at Bank of America and Chief Financial Officer of Continental Bank, Mr. O’Neill has had extensive experience and developed his expertise in the areas of financial services, international, corporate and consumer business, regulatory compliance, risk management

154 Information gathered from company website and www.forbes.com

4. Proter & Gamble Company 5. Grupo Prisa 6. Rolls Royce (member of International Advisory Board) 7. BP (member of International Advisory Board) 8. Credit Suisse Research Institute (Advisor) 9. Economic Forum (Foundation Board) 10. The Group of Thirty (member) 11. Inter-American Dialogue (member)

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and financial reporting. Under his leadership, Bank of Hawaii executed a successful three-year strategic turnaround and risk management procedures were overhauled. Furthering his regulatory compliance expertise, while at the Bank of Hawaii, Mr. O’Neill served as district member of the Federal Reserve Advisory Council. During his tenure at Continental Bank and while he was an independent financial consultant, Mr. O’Neill gained extensive international financial services experience. 3. Judith Rodin

Dr. Rodin is an experienced leader in the not-for-profit sector and has been nominated to serve on the Board because of her skills and experience in the areas of Corporate Affairs, Corporate Governance, Compensation, Financial Reporting, Risk Management and Legal Matters. Through her current role as the President of the Rockefeller Foundation, and her previous positions as President of the University of Pennsylvania from 1994 until her retirement in 2004, and as Provost of Yale University from 1992 to 1994, together with her previous service on Citi’s Audit and Risk Management Committee and her service as a member of the Comcast Audit Committee, Dr. Rodin has had extensive experience in the areas of corporate affairs, financial reporting, risk management and legal matters. As the President of the University of Pennsylvania, which was the largest private employer in Philadelphia, as a member of the compensation committees of both AMR Corporation and Comcast Corporation and as a Director of Comcast Corporation, AMR Corporation and Aetna Inc., Dr. Rodin has had extensive experience with compensation matters. Her service as a Director of the World Trade Memorial Foundation, and of Carnegie Hall, as an honorary Director of the Brookings Institution, a member of the Council on Foreign Relations, a member of the Institute of Medicine and a member of the New York City Commission for Economic Opportunity have deepened her understanding of corporate affairs issues. 4. Robert L. Ryan

Mr. Ryan is an experienced finance executive and has been nominated to serve on the Board because of his extensive skills and experience in the areas of Financial Reporting, Risk Management and Corporate Affairs. Mr. Ryan has developed extensive expertise in financial reporting and risk management through his roles as Senior Vice President and Chief Financial Officer of Medtronic from 1993 to 2005, Vice President, Finance and Chief Financial Officer of Union Texas Petroleum Corporation from 1984 to 1993, its Controller from 1983 to 1984, and its Treasurer from 1982 to 1983, as well as through his service on Citi’s Audit Committee, and his service on the Audit Committees of General Mills and Hewlett-Packard. Through his service on the Boards of Citi, Stanley Black & Decker, General Mills, and Hewlett-Packard and his roles as a Trustee of Cornell University and a member of the Visiting Committee of Harvard Business School, Mr. Ryan has gained valuable corporate affairs expertise and experience. 5. Anthony M. Santomero

Senior Advisor, McKinsey & Company — 2006 to 2008 President, Federal Reserve Bank of Philadelphia — 2000 to 2006 Richard K. Mellon Professor, Finance, The Wharton School at the University of Pennsylvania — 1984 to 2002

Dr. Santomero is a seasoned economist and economic policy adviser and has been nominated to serve on the Board of Directors because of his extensive experience in the areas of Risk Management, Regulatory Compliance, and Financial Reporting. Among many other distinguished positions at which he had wide-ranging risk and regulatory experience, Dr. Santomero was most recently a Senior Advisor at McKinsey & Company, served as the President of the Federal Reserve Bank of Philadelphia from 2000 to 2006, and was Chair of the System’s Committee on Credit and Risk Management, and was a member of the Financial Services Policy Committee and the Payments System Policy Advisory Committee. As the Richard K. Mellon Professor of Finance at The Wharton School of the University of Pennsylvania and Deputy Dean of the School, Dr. Santomero’s particular focus was on issues related to managing risk at the firm level as well as ways to improve productivity and performance, while working closely with industry executives and practitioners to ensure that the research was informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. Through his service on Citi’s Risk Management and Finance and Audit Committees as well as the Investment and Risk Management Committee of RennaissanceRe Holdings, he has deepened his risk management experience.

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6. Joan E. Spero

Senior Research Scholar, Columbia University School of International and Public Affairs - 2010 to present Visiting Fellow at the Foundation Center – 2009 to 2010 President and CEO, Doris Duke Charitable Foundation – 1997 to 2008 Under Secretary of State, Economics, Business and Agricultural Affairs – 1993 to 1996 Executive Vice President, American Express Company, Corporate Affairs and Communications – 1991 to 1993 Senior Vice President and Treasurer – 1989 to 1991 Vice President, Corporate Affairs – 1983 to 1989 Vice President, Corporate Strategic Planning – 1981 to 1983 Ambassador to the United Nations for Economic and Social Affairs – 1980 to 1981 Assistant Professor, Columbia University – 1973 to 1979

Ms. Spero is a person of wide ranging experience, having served as a senior Government official, a financial services executive, an academic, a seasoned Board member and as a leader in the not-for-profit sector. She has been nominated to serve on the Board because of her Corporate Governance, Regulatory Compliance, International and Consumer Business, Financial Services, Corporate Affairs, Compensation and Financial Reporting experience. Ms. Spero gained extensive regulatory compliance and international business experience during her tenure as U.S. Under Secretary of State for Economic, Business and Agricultural Affairs and U.S. Ambassador to the United Nations for Economic and Social Affairs. As an executive at American Express Company, including her roles as Executive Vice President of Corporate Affairs and Communications and as Senior Vice President and Treasurer, she developed expertise in financial services, consumer business and corporate affairs. As a current or former member of the Boards of Directors of IBM, International Paper, ING

155, Delta Airlines and First Data Corporation, including her service on the Compensation and Audit

Committees of IBM, the Governance Committee of International Paper and the Public Policy and Environment Committee of International Paper, she gained extensive experience in corporate governance, consumer business, financial reporting, compensation, and corporate affairs. Her roles as the former President of the Doris Duke Foundation; her former position as the visiting fellow at the Foundation Center, where she conducted research on the role of American Private Foundations in U.S. foreign policy and in the global system; and her current role as senior research scholar at Columbia University School of International and Public Affairs where she researches and writes about international philanthropy and its role in the global system; as well as her other service in the non-profit sector, have given her extensive insights into corporate affairs matters. 7. Diana L. Taylor

Managing Director, Wolfensohn Fund Management, L.P. — 2007 to present Superintendent of Banks, State of New York — 2003 to 2007 Deputy Secretary, Governor Pataki, State of New York — 2002 to 2003 Chief Financial Officer, Long Island Power Authority — 2001 to 2002 Vice President, KeySpan Energy — 1999 to 2001 Assistant Secretary, Governor Pataki, State of New York — 1996 to 1999 Executive Vice President, Muriel Siebert & Company — 1993 to 1994 President, M.R. Beal & Company — 1988 to 1993 and 1995 to 1996 Senior Vice President, Donaldson Lufkin & Jenrette — 1984 to 1988

155 She served on the supervisory board of ING from 27 april 2008 till June 2011. See ING, ING announces change in supervisory board, Amsterdam, 27 May 2011

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Vice President, Lehman Brothers Kuhn Loeb — 1982 to 1984 Associate, Smith Barney Harris Upham — 1980 to 1982

Ms. Taylor is an experienced financial services executive and regulator and has been nominated to serve on the Board of Directors because of her wide-ranging experience in the areas of Financial Services, Corporate Business, Regulatory Compliance, Risk Management, Corporate Affairs, Compensation, Corporate Governance, Financial Reporting and Legal Matters. Ms. Taylor has extensive bank regulatory and risk management experience having served as the Superintendent of Banks for the New York State Banking Department. Her financial services and corporate business experience includes in-depth private equity, fund management and investment banking experience as a Managing Director of Wolfensohn Fund Management, L.P., a fund manager, Founding Partner and President of M.R. Beal & Company, a full service investment banking firm, and through various executive positions with Donaldson, Lufkin & Jenrette, Lehman Brothers Kuhn Loeb, Inc., and Smith Barney, Harris Upham & Co. Earlier in her career, Ms. Taylor served as Chief Financial Officer of the Long Island Power Authority. In addition, through her work on the Sotheby’s Compensation Committee, the Brookfield Properties Governance Committee, on the Compensation Committee of, and as a member of the Audit Committee of, the Dartmouth Board of Trustees, and as chair of Accion International, the New York Women’s Foundation, the YMCA of Greater New York and the Hudson River Park Trust, Ms. Taylor has gained additional experience in corporate affairs, corporate governance, financial reporting, compensation and legal matters. 8. William S. Thompson, Jr

Chief Executive Officer, PIMCO — 1993 to 2009 Salomon Brothers Inc. — 1975 to 1993 Chairman, Salomon Brothers Asia Ltd. — 1991 to 1993 Head of Corporate Finance, Western Region — 1988 to 1991 Managing Director and Head of Institutional Sales, Western Region — 1981 to 1988

Mr. Thompson is an experienced financial services executive and has been nominated to serve on the Board of Directors because of his extensive experience in the areas of Financial Services, Corporate Governance, Financial Reporting, Compensation, Legal Matters, International Business, Corporate and Consumer Business and Risk Management. As Chief Executive Officer of PIMCO from 1993 to 2009, Chairman of Salomon Brothers Asia Ltd. in Tokyo from 1991 to 1993, and head of Corporate Finance, Western Region and Head of Institutional Sales, Western Region, at Salomon Brothers, Mr. Thompson gained extensive financial services, and corporate, consumer and international business, skills and experience. As a Chief Executive Officer, and through his service as Chairman of the Risk and Finance Committee, member of the Compensation and Personnel Committee and Lead Director of Pacific Life Corporation, Mr. Thompson developed extensive skills and experience in corporate governance, financial reporting, compensation and legal matters. 9. Ernesto Zedillo

Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University — 2002 to present President of Mexico — 1994 to 2000 Secretary of Education, Government of Mexico — 1992 to 1993 Secretary of Economic Programming and the Budget, Government of Mexico — 1988 to 1992 Undersecretary of the Budget, Government of Mexico — 1987 to 1988 Banco de Mexico — Economist, Deputy Manager of Economic Research, Director General of FICORCA, Deputy Director — 1978 to 1987

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Mr. Zedillo Ponce de Leon is the former President of Mexico, a seasoned economist and academic expert and has been nominated to serve on the Board of Directors because of his extensive experience in the areas of International Business, Financial Services, Regulatory Compliance, Corporate Affairs, Financial Reporting, Risk Management and Corporate Governance. Through his extensive governmental experience, including his service from 1978 to 1987 at the Central Bank of Mexico, as Undersecretary of Budget for the Mexican government from 1987 to 1988, as Secretary of Economic Programming and the Budget from 1988 to 1992 and as President of Mexico from 1994 to 2000, as well as his academic experience, including his roles as the Director of the Center for the Study of Globalization at Yale and as Professor in the Field of International Economics and Politics and Professor of International and Area Studies at Yale, he has had extensive experience in the areas of international business, financial services, regulatory compliance and risk management. His service as Chair of the Global Development Network, Chair of the High Level Commission on Modernization of World Bank Group Governance; on the Group of Thirty, and on the International Advisory Boards of ACE Limited, Rolls-Royce, BP and the Coca-Cola Company have given him extensive international business, financial services and corporate affairs experience. As a member of the Boards of Alcoa Inc., where he is on the Audit Committee and Public Issues Committee, and Procter & Gamble Company, where he is Chair of the Governance and Public Responsibility Committee, a member of the Innovation and Technology Committee and a past member of that Board’s finance committee, Grupo Prisa of Spain and as a past Director of the Union Pacific Corporation, where he served on the Audit and Finance Committees, and as a Director of EDS, where he served on the Governance Committee, Mr. Zedillo Ponce de Leon has gained experience in financial reporting, risk management, corporate governance and corporate affairs.

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Exhibit D: Wells Fargo

Name Age Independent Director Since Other Board Commitments Experience

John D. Baker 64 Yes 2009 1. Patriot Transportation Holding, Inc. (Exec. Chairman and Director) 2. Panadero Affregates Holdings LLC (Chairman) 3. Texas Industries Inc 4. KIPP Schools Jacksonville (chairman of the board) 5 Tiger Academy (Chairman of the board) 6. YMCA of Florida’s First Coast (Trustee) 7. Woodberry Forest School (Trustee)

No

Elaine L. Chao 59 Yes 2011 1. Heritage Foundation (Distinguished Fellow) 2. Dole Food Company, Inc 3. News Corporation 4. Protective Life Corporation 5. Institute of Politcs (board member) 6. Harvard Kennedy School of Government (board member) 7. Harvard Business School Board of Deans Advisors and Board of Global Advisors (board member) 8. New York-Presbyterian Hospital (trsutee)

Yes

John S. Chen

57 Yes 2006 1. Silver Lake Partners (Senior Advisor) 2. The Walt Disney Company (director) 3. San Fransisco Symphony (trustee) 4. Califoria Institute of Technology (trustee)

No

Lloyd H. Dean

62 Yes 2005 1. Dignity Health (President, CEO and Director) 2. Cytori Therapeutics (non-executive chairman) 3. Mercy Housing California (Member of the board) 4. McKessons Advisory Board (member) 5. Health Research and Dvelopment Institute (member of the board) 6.San Fransisco Commitee on JOBS (chairman)

No

Susan E.Engel 66 Yes 1998 1. Portero, Inc

2. Coolibar, Inc (Director) 3. Supervalu Inc

No

Enrique Hernandez, Jr,

57 Yes 2003 1. Inter-Con Security Systems, Inc (Chairman, President, CEO and Director) 2. Corporation 3. McDonald’s Corporation 4. Nordstrom Inc (chairman of the board) 5. University of Notre Dame (member of the board of trustees)

Yes

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6. Harvard College Visiting Committee (member) 7. Harvard University Resources Committee (member) 8.The John Randolph Haynes and Dora Haynes Foundation (member)

Donald M. James

64 Yes 2009 1. Vulcan Materials Company (Chairman, CEO and Director) 2. Southern Company 3. UAB Health Systems 4. Economic Development Partnership of Alabama (board member) 5. Birmingham Business Alliance (Executive Committee / Volunteer Leadership) 6. Birmingham Museum of Art (advisory board) 7. U.S. Chamber of Commerce (member of the board) 8. Childeren’s hospital Alabama (trustee) (it is not clear how many other boards mr. James serves on, the company website is vague about this)

Yes

Cynthia H. Milligan

66 Yes 1992 1. University of Nebraska-Lincoln, Collega of Business Administration (Dean Emeritus) 2. Calvert Funds (director) 3. Kllogg Company (director) 4. Raven Industries (director) 5. The Gallup Organization (member of the board). 6.Prison Fellowship Foundation (member of the board) 7. W.K. Kellog Foundation (member of the board) 8. Colonial Williamsburg Foundation (trustee). 9. University of Nebraska Foundation (trustee)

Yes

Frederico F. Pena

66 Yes 2011 1. Vestar Capital Partners (Senior Advisor) 2. Sonic Corporation (member of the board) 3. Toyota North American Advisory Board (memberof the board) 4. COMPETE coalition (member)

Yes

Howard V. Richardson 62 Yes 2013 1. American Institue of Certified Public Accountants (member)

2. Strategic Planning Committee of the Ronald McDonald House New York (senior advisor and member)

No

Judith M. Runstad

68 Yes 1998 1. Foster Pepper PLLC (Of Counsel) 2. Greater Seattle Chamber of Commerce (member of the board) 3. Downtown Seattle Association (emeritus board member) 4. Washington Women’s Foundation (emeritus board member)

Yes

Stephan W. Sanger 66 Yes 2003 1. Pfizer Inc

2. Target Corporation 3. Guthrie Theather Foundation (director)

No

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Independent Director Experience Profiles 1. John D. Baker

Mr. Baker has served as Executive Chairman and a director of Patriot Transportation Holding, Inc., Jacksonville, Florida (motor carrier and real estate company) since October 2010. He served as President and Chief Executive Officer of Patriot from February 2008 until October 2010. He served as President from May 1989, and Chief Executive Officer from February 1997 of Florida Rock Industries, Inc., Jacksonville, Florida (construction materials) until November 2007. Mr. Baker also currently serves as Chairman of Panadero Aggregates Holdings LLC, a construction aggregates company located in Jacksonville, Florida. As the CEO or chairman of two public companies during the past 16 years, including a company involved in real estate activities, Mr. Baker brings leadership and executive management experience to the Board. Mr. Baker has led or founded several public and private companies doing business in the Southeast, including recently as the lead investor and senior advisor for a start-up private equity firm, and his entrepreneurial skills and deep knowledge of the business climate in the Southeast provide unique insight into the operating environment of some of the Company’s largest banking markets. Mr. Baker has extensive financial management expertise that he gained as a CEO or chairman, and as a past member of the audit committees of two other public companies and a current member of the Company’s Audit and Examination and Credit Committees. Mr. Baker has a law degree from the University of Florida School of Law, and his experience as a lawyer and former member of the board of a large public utility company also contribute important risk management and regulatory oversight skills to the Board. 2. Elaine L. Chao

Ms. Chao served as the 24th U.S. Secretary of Labor from January 2001 until January 2009. She has been a Distinguished Fellow at the Heritage Foundation, Washington, D.C. (educational and research organization) since January 2009 and from August 1996 until January 2001. She was President and Chief Executive Officer of United Way of America from November 1992 until August 1996. Ms. Chao’s previous government experience also includes serving as Director of the Peace Corps from December 1991 until November 1992 and Deputy Secretary of the U.S. Department of Transportation from April 1989 until December 1991. As the first Asian Pacific American woman in U.S. history to be appointed to a President’s cabinet and a leader of large high-profile organizations operating in complex regulatory and public policy environments, Ms. Chao has extensive leadership, executive management, and governmental experience, which provide the Board with important expertise as it oversees the Company’s interaction with a wide variety of outside groups in a rapidly changing external environment. Ms. Chao’s skills in building constructive working relationships with diverse stakeholders also provide useful insight for the Company in various social responsibility and community affairs areas as it strives to enhance its relationships in the communities where it does business. Her experience as Secretary of Labor provides the Board with a valuable perspective on workforce issues important for the Company and its over 265,000 team members, and her previous work at two large financial services companies

156 contributes relevant industry experience to

the Board. As a current and former board member of a number of prominent public companies, including as the current chair of the governance committee of Dole Food Company and a member of the nominating and corporate governance committee of News Corporation, she also brings additional corporate governance experience to the

156 www.forbes.com states that these financial institutions are BankAmerica Capital Markets Group and Citigroup. However, it is also stated that she worked for those institutions prior to working as Deputy Secretary of Transportation from 1989 to 1991. Meaning that this expertise is not deemed current.

John G. Stumpf 59 No 2006 N/A -

Susan G. Swenson

64 Yes 1994 1. Harmonic Inc 2. Novatel Wireless Inc 3. Spirent Communications Plc 4. First Responder Network Authority

No

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Board. Ms. Chao has a Master of Business Administration from Harvard Business School. 3. John S. Chen

Mr. Chen served as Chairman and Chief Executive Officer of Sybase, Inc., Dublin, California (computer software) from July 2010 until he retired in November 2012. Sybase is a wholly-owned subsidiary of SAP AG, Walldorf, Germany. He also served as Chairman, Chief Executive Officer, President, and as a director of Sybase from November 1998 until July 2010 when Sybase was acquired by SAP AG. Mr. Chen currently serves as a Senior Advisor of Silver Lake, Menlo Park, California (a private investment firm). Mr. Chen has leadership and executive management experience gained from his 14 years as the CEO of Sybase, one of three highly successful technology companies that he has led during his business career. Mr. Chen also served as president of the Open Enterprise Computing Division of Siemens Nixdorf, and president and chief operating officer of Pyramid Technology Corporation. Mr. Chen’s experience and perspective on information technology, information security, and software matters are particularly important to the Company, which uses numerous complex information technology applications and systems and frequently is involved in system integrations. Mr. Chen also brings to the Board finance experience and, as a result of his work with Sybase and several public sector organizations, an important focus on international relations and business and community affairs. His experience serving on the board of a large well-known entertainment company also provides valuable insight into the importance of developing and maintaining an internationally recognized brand, since the Company’s brand and reputation are recognized as one of the most valuable in the financial services business. Mr. Chen holds a Master of Science from California Institute of Technology. 4. Lloyd H. Dean

Mr. Dean has served as President, Chief Executive Officer, and a director of Dignity Health, San Francisco, California (health care) since April 2000. As the president and CEO of Dignity Health, a large multi-state healthcare organization that is the fifth largest hospital provider in the nation, and as a former executive vice president and chief operating officer of Advocate Health Care and officer of The Upjohn Company, Mr. Dean brings over 21 years of leadership, executive management, and business strategy experience to the Board. Similar to the Company, Dignity Health is subject to significant regulatory oversight, which provides Mr. Dean with additional insight in analyzing and advising on complex regulatory issues affecting the Company. The Board also benefits from Mr. Dean’s substantial finance, systems operations, service quality, human resources, and community affairs expertise, which he gained as a result of his responsibilities with Dignity Health, and from his extensive banking and related financial management expertise acquired as a former member of the Company’s Audit and Examination Committee and Credit Committee. Mr. Dean’s current service as the non-executive chairman of Cytori Therapeutics provides an additional corporate governance perspective to the Board and its Human Resources and Governance and Nominating Committees where he serves as a member. Mr. Dean holds a Master’s Degree in Education from Western Michigan University and also is a graduate of PennsylvaniaState University’s Executive Management Program. 5. Susan E.Engel

Ms. Engel serves as Chief Executive Officer of Portero, Inc., New York, New York (an online retailer of luxury pre-owned and vintage personal accessories) since July 2009. She served as Chairwoman, Chief Executive Officer, and a director of Lenox Group Inc., Eden Prairie, Minnesota (a tabletop, collectibles and giftware marketer, manufacturer and wholesaler) from November 1996 until she retired in January 2007. Ms. Engel has extensive executive management, leadership, and sales and marketing experience, which she has acquired as the CEO of several public and private companies over the past 20 years. In addition to her current executive position with Portero and her previous leadership positions with Lenox Group, Ms. Engel served as the president and chief executive officer of Champion Products, Inc., the athletic apparel division of Sara Lee Corporation for approximately three years and was a consultant with Booz Allen Hamilton, a large management consulting firm, for over 14 years. She has served on several public and private boards, and provides

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entrepreneurial, retail, and online sales experience to the Board, which is important to our many consumer businesses. Ms. Engel has extensive knowledge and experience regarding the Company’s businesses, which she gained as a result of over 14 years of service on the Company’s Board, including as a director of the former Norwest, and she has been a member of the Company’s Credit and Finance Committees for the past 14 years and its Human Resources Committee for over 11 years. Ms. Engel has a Master ofBusinessAdministration from Harvard Business School. 6. Enrique Hernandez, Jr,

Mr. Hernandez has served as Chairman, President, Chief Executive Officer, and a director of Inter-Con Security Systems, Inc., Pasadena, California (security services) since 1986. Mr. Hernandez brings leadership and executive management experience to the Board as the chairman, president and CEO of Inter-Con Security Systems, Inc., a global security services provider, and as the non-executive chairman of the board of Nordstrom, Inc., a large publicly traded retail company. The Board benefits from the valuable corporate governance and board leadership experience and expertise that Mr. Hernandez has acquired, including as chairman of Nordstrom, particularly in areas such as business strategy, risk assessment and succession planning. Mr. Hernandez also has extensive experience in the banking and financial services industry, as well as banking and related financial management expertise as a former member of the boards and audit committees of two other large financial institutions, Great Western Financial Corporation from 1993 to 1997 and Washington Mutual, Inc. from 1997 to 2002. Mr. Hernandez has served as chair of the audit committees of Nordstrom and McDonald’s, currently serves on the Company’s Audit and Examination Committee, and chairs the Finance Committee and Risk Committee, all of which have further enhanced his finance experience and contributions to the Board. Mr. Hernandez has a law degree from Harvard Law School and practiced as a litigation attorney for four years with a large law firm in California, which provides him with additional insight on risk management and litigation issues relevant to the Company’s operations. 7. Donald M. James

Mr. James has served as Chairman, Chief Executive Officer, and a director of Vulcan Materials Company, Birmingham, Alabama (construction materials) since May 1997 Mr. James brings extensive leadership and executive management experience to the Board as the chairman and CEO of Vulcan Materials Company where he also served in various senior management positions since 1992, including as president and chief operating officer. Before joining Vulcan, Mr. James practiced law as a partner in a large law firm in Alabama and was chairman of the firm’s litigation practice group, which also provides him with additional perspective in dealing with complex legal, regulatory, and risk matters affecting the Company. As a former board member of Wachovia, South Trust Corporation (1998-2004) (which was acquired by Wachovia), and Protective Life Corporation (1997-2006), Mr. James has substantial knowledge and experience in the banking and financial services industry, and his prior service as the presiding director of the Southern Company, a large public utility company, also brings important corporate governance, regulatory oversight, succession planning, and business strategy experience to the Board. Mr. James holds a Master of Business Administration from the University of Alabama and a law degree from the University of Virginia. 8. Cynthia H. Milligan

Ms. Milligan served as Dean of the College of Business Administration at the University of Nebraska-Lincoln, Lincoln, Nebraska (higher education) from June 1998 to May 2009, when shewas named Dean Emeritus of the College of Business Administration Ms. Milligan has extensive experience in the financial services industry, including as a bank regulator and lawyer, which provides valuable insight to the Board on banking, regulatory, and risk assessment and management issues. Ms. Milligan served as the Director of Banking and Finance for the State of Nebraska from 1987 until 1991, responsible for supervising several hundred banks and other financial institutions, and she also served as a Director, Omaha Branch, of the Kansas City Federal Reserve for approximately six years. In addition, she was president of her own consulting firm for financial institutions for approximately seven years (1991-1998) and acquired significant banking and related financial management expertise in this role, as well as during her service as a bank regulator and as Dean of the College of Business Administration for the University of Nebraska-Lincoln. She has substantial knowledge and experience about the Company’s businesses and has served on many of the Board’s committees,

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including its Audit and Examination Committee for over 17 years andcurrently as chair of the Credit Committee and member of the Risk Committee. Ms. Milligan has a law degree from George Washington University National Law Center and was a senior partner at a law firm in Nebraska, as well as an Adjunct Professor of Law in taxation at Georgetown University Law Center and in banking at the University of Nebraska College of Law. 9. Frederico F. Pena

Mr. Peña has served as a Senior Advisor of Vestar Capital Partners, Denver, Colorado (private equity firm) since January 2009 and previously served as a Managing Director of Vestar from January 2000 to January 2009. He served as the U.S. Secretary of Energy from March 1997 until June 1998 and as the U.S. Secretary of Transportation from January 1993 until February 1997. As the former U.S. Secretary of Energy and U.S. Secretary of Transportation, as well as Mayor of the City and County of Denver, Colorado for eight years and member of the Colorado House of Representatives for four years, Mr. Peña brings substantial leadership, executive management, regulatory, public policy, and community affairs expertise to the Board, which provide invaluable insight as the Company operates in the rapidly changing regulatory,political, and social environment for financial services companies. Mr. Peña’s service with Vestar, including his work analyzing complex financial transactions and advising senior management teams, as well as his experience founding and leading his own investment management firm, contribute important financial management, investment, business strategy, and entrepreneurial skills to the Board, which are useful in its oversight of the Company’s capital markets and investment advisory businesses. He holds a law degree from the University of Texas, which enhances his understanding of legal and regulatory issues affecting the Company. 10. Howard V. Richardson

Mr. Richardson served as a partner of PricewaterhouseCoopers LLP, New York, New York (accounting, auditing, and consulting firm) from 1988 until June 2011. He joined PricewaterhouseCoopers in June 1976 and held a variety of positions with the firm, including U.S. Financial Services and Banking leader from 1996 to 2000 and Global Banking/Capital Markets leader from 1998 to 2002. Mr. Richardson brings extensive accounting, financial reporting, risk management, bank regulatory, and financial services experience to the Board. He served PricewaterhouseCoopers for over 35 years in a wide range of leadership, audit and business advisory positions, and was the lead engagement partner or advisory partner for some of PricewaterhouseCoopers’ largest financial services clients, including large bank holding companies, investment management firms, broker-dealers, and insurance companies. During his career at PricewaterhouseCoopers, Mr. Richardson worked closely with the senior management teams, boards of directors, and audit committees of large U.S. and international financial services firms, and his work at PricewaterhouseCoopers provides him with a unique perspective on the complex issues facing large financial services firms such as the Company. Mr. Richardson is a member of the American Institute of Certified Public Accountants and holds a Master of Science from Boston University (London Program). He is also a graduate of Tuck’s Executive Management Program at Dartmouth College’s Graduate School of Business. 11. Judith M. Runstad

Ms. Runstad is a former partner of, and has been of counsel since January 1997 to the law firm of Foster Pepper PLLC, Seattle, Washington. She is a former Chairwoman of the Board of the Federal Reserve Bank of San Francisco (1995-1997). As a former director and Chairwoman of the Board of the Federal Reserve Bank of San Francisco, as well as a former director and Chairwoman of the Federal Reserve’s Seattle branch (1989-1991), Ms. Runstad has substantial banking and finance experience, as well as strong leadership and corporate governance skills. She has been practicing law in the areas of real estate development and land use and environmental law for over 38 years with a large law firm, and her legal background and experience provide her with additional insight in dealing with complex legal, regulatory, and risk matters affecting the Company, as well as real estate-related issues. Ms. Runstad serves as a member of the board of Wright Runstad & Company, a privately held commercial real estate developer/owner. Ms. Runstad has a broad understanding of the Company’s

82

businesses, which she has acquired during the past 14 years as a director, and she has been a member of the Company’s Finance Committee for over 13 years and was a past member of the Company’s Audit and Examination Committee for eight years. Ms. Runstad’s participation in a variety of civic activities in the Northwest, where the Company has significant business operations, also contributes important community affairs experience to the Board. Ms. Runstad received her law degree from the University of Washington. 12. Stephan W. Sanger

Mr. Sanger served as Chairman of General Mills, Inc., Minneapolis, Minnesota (packaged food producer and distributor) from May 1995, and as a director since 1992, until he retired in May 2008. He also served as Chief ExecutiveOfficerofGeneral Mills from May 1995 to September 2007. Mr. Sanger brings leadership, executive management, and sales and marketing experience to the Board, as well as valuable experience in corporate strategy and mergers and acquisitions. Mr. Sanger joined General Mills in 1974 and held various management positions at General Mills before becoming chairman and CEO in 1995. Mr. Sanger led General Mills through the complex acquisition and integration of Pillsbury, and his extensive experience gained from leading a company responsible for developing and marketing some of the world’s best known consumer brands is beneficial to the Company and the Board. He has served on the audit, compensation, and governance committees of several large public companies, including the audit and governance committees of Pfizer and the compensation and governance committees of Target, where he enhanced his human resources and corporate governance skills. His service on the Company’s Human Resources Committee for over eight years, including five years during which he served as the chair of the committee, and as a member and current Chair of the Company’s Governance and Nominating Committee, provides valuable experience for his current role as Lead Director. Mr. Sanger holds a Master of Business Administration from the University of Michigan. 13. Susan G. Swenson

Ms. Swenson served as President and Chief Executive Officer of Sage Software-North America, the North American operations of The Sage Group PLC located in the United Kingdom (business management software and services supplier) from March 2008 until April 2011. Ms. Swenson held positions as the Chief Operating Officer of Atrinsic, Inc. (formerly known as New Motion, Inc.) from August 2007 to March 2008, Amp’d Mobile, Inc. from October 2006 to July 2007, and T-Mobile USA from February 2004 to October 2005, and as President and Chief Operating Officer and a director of Leap Wireless International, Inc. from July 1999 to January 2004. Ms. Swenson brings extensive leadership, executive management, and information technology experience to the Board, as well as substantial knowledge and experience regarding the Company, which she acquired during her 18 years as a director. Ms. Swenson has over 30 years’ experience in the telecommunications industry, including as the CEO or COO of several public and private companies, and was recently appointed by the U.S. Commerce Secretary to serve as one of the initial board members of the First Responder Network Authority, an independent U.S. governmental entity created to establish a nationwide, public safety broadband network. Ms. Swenson’s experience and management responsibilities during her business career has included information technology, engineering, software research and development, marketing and sales, business operations and customer care and loyalty, each of which is important to the Company, particularly in its retail, online, and mobile banking businesses. She has served on several public and private boards, including as chair of the audit committee for Palm, Inc. from 1999 to 2004. She has extensive financial management expertise, and has been a member of the Company’s Audit and Examination Committee since 1996.

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Exhibit E: Goldman Sachs

Name Age Independent Director Since Other Board Commitments Experience

1. Lloyd C. Blankfein 58 No April 2003 N/A -

2. Gary D. Cohn 52 No June 2006 N/A -

3. William. W. George

70 Yes December 2002 1. Exxon Mobil Corporation (director) 2. Harvard Business School (Professor of Management Practice) 3. World Economic Forum USA (board member) 4. Guthrie Theater (board member) 5. Mayo Clinic (trustee)

No

4 Lakshmi N. Mittal

62 Yes June 2008 1. ArcelorMittal S.A. (director) 2. European Areonautic Defence and Space Company EADS N.V. (director) 3. International Business Council of the World Economic Forum (member) 4. Kellogg School of Management, Northwestern University (advisory board) 5. Cleveland Clinic (Board of Trustees) 6. World Steel Association (member executive committee) 7. Indian School of Business (executive board

No

5. James J. Schiro

67 Yes May 2009 1. PepsiCo Inc (director) 2. Reva Medical Inc (director) 3. Royal Philips Electronics (director) 4. CVC Partners (senior advisor) 5. St. John’s University (Trustee Emeritus) 6. Institute for Advanced Study (Trustee) 7. American Friends of the Lucerne Festival (Vice-Chairman) 8. St. Michaels Special School (board member)

Yes

6. Mark Edward Tucker 55 Yes November 2012 1. AIA Group Limited (Executive Director, Group CEO and President)

2. International Center for Financial Regulation (member international Advisory Council)

Yes

7. M. Michelle Burns

54 Yes October 2011 1. Cisco Systems, Inc. (director) 2. Wal Mart Stores, Inc. (Director) 3. Retirement Policy Center, sponsored by Marsh & McLennan Companies Inc.(CEO) 4. Standford University on Longevity (Center Fellow and Strategic

No

84

Advisor ) 5. Elthon John AIDS Foundation (Board member and Treasurer)

8. Claes Dahlback

65 Yes June 2003 1. Investor AB (Senior Advisor) 2. Foundation Asset Managament (Senior Advisor) 3. Royal Swedish Academy of Engineering Sciences (member) 4. Royal Swedish Society of Naval Sciences (member) 5. Stockholm School of Economics (Jonorary Doctor and Director) 6. Stockholm School of Economics Foundation (Chair) 7. Leader of the Year Award (chair)

Yes

9. James A. Johnson

69 Yes May 1999 1. Forestrat Group Inc (director) 2. Target Corporation (director) 3. John F. Kennedy Center for the Performing Arts (Chairman Emeritus)

4 Council on Foreign Relations (Member) 5 American Academy of Arts and Sciences (Member) 6 American Friends of Bilderberg (Member and Treasurer) 7 The Brookings Institution (Chairman Emeritus and Executive Committee Member) 8 Smithsonian Museum of African American History and Culture (Council Member, ) 9 Advisory Council, Stanford University Center on Longevity (chair)

Yes

10. Adebayo. O. Ogunlesi

59 Yes October 2012 1. Callaway Golf Company (director) 2. Kosmos Energy Ltd (director) 3. Global Infrastructure Partners (Chairman and managing partner) 4. Africa Finance Corporation (Chairman) 5. NewYork-Presbuterian Hospital (member board of trustees) 6. The NAACP Legal Defence and Educational Fund, Inc (member national board of directors) 7. Smithsonian National Museaum of African Art (member advisory board) 8. Americans for Oxford (member board of directors)

Yes

11. Debora L. Spar

49 Yes June 2011 1. Barnard College (president) 2. Council on Foreign relations (member) 3. The Nightingale-Bamford School (member board of trustees) 4. American Academy of Arts Sciences (member)

No

12. David A. Viniar 57 No January 2013 N/A

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Independent Director Experience Profiles 1. William. W. George

Professor of Management Practice, Harvard Business School (January 2004 – Present)

Medtronic, Inc., a medical technology company o Chairman (April 1996 – April 2002)

o Chief Executive Officer (May 1991 – May 2001) o President and Chief Operating Officer (1989 – 1991)

Executive Vice President, Honeywell International Inc., a diversified technology and manufacturing company (1978 – 1989)

President, Litton Microwave Cooking; Vice President, Litton Industries, a diversified manufacturing company (1969 – 1978)

A professor of management practice at Harvard Business School and author of books on leadership, Mr. George brings academic expertise in business management and corporate governance to our Board, along with significant practical experience in management, technology and governance developed during his career as Chief Executive Officer and Chairman of Medtronic, Inc. and as a senior executive at Honeywell International Inc. and Litton Industries. Mr. George’s current and prior service on the boards of directors and board committees of several other public companies and not-for-profit entities has given him additional perspective on management and corporate governance. 2 Lakshmi N. Mittal

ArcelorMittal S.A., a steel and mining company

o Chairman and Chief Executive Officer (May 2008 – Present) o President and Chief Executive Officer (November 2006 – May 2008)

Chief Executive Officer, Mittal Steel Company N.V. (formerly the LNM Group) (1976 – November 2006)

Mr. Mittal is the founder of Mittal Steel Company and is now Chairman and Chief Executive Officer of ArcelorMittal S.A., the world’s leading integrated steel and mining company. He brings significant experience in business development and operations to our Board, along with substantial expertise in international business and growth markets. Mr. Mittal’s current and prior service on the boards of directors of other international public companies and not-for-profit entities also provides him with knowledge of corporate governance, and international governance in particular. 3. James J. Schiro

Zurich Insurance Group Ltd., an insurance-based finance group o Chairman of the Group Management Board and Chief Executive Officer (May 2002 – December 2009)

o Chief Operating Officer – Finance (March 2002 – May 2002)

Chief Executive Officer, PricewaterhouseCoopers LLP, a provider of assurance, tax, and business consulting services (1998 – 2002)

Chairman and Chief Executive Officer, Price Waterhouse LLP, an accounting firm (1995 – 1998)

Mr. Schiro has experience in international business, and in particular, global capital markets, developed during his tenure at the helm of Zurich Insurance Group Ltd., one of the world’s largest insurance groups. As Chief Executive Officer and Chief Operating Officer – Finance at Zurich Insurance Group Ltd., Mr. Schiro developed both managerial

86

capabilities as well as experience in the review and preparation of financial statements. He also brings solid financial and banking acumen gained from his role as Chief Executive Officer and other positions held at PricewaterhouseCoopers LLP. Through his service on the boards of directors and board committees of other public companies and not-for-profit entities, Mr. Schiro has also developed corporate governance expertise, which he draws upon in his roles as our Lead Director and Corporate Governance, Nominating and Public Responsibilities Committee Chair. 4. Mark Edward Tucker

AIA Group Limited (AIA Group), a life insurance group in the Asia Pacific region

o Executive Director, Group Chief Executive Officer and President, AIA Group (January 2011 – Present) o Chairman, American International Assurance Company, Limited (February 2011 – Present) o Chairman, American International Assurance Company (Bermuda) Limited (February 2011 – Present) o Group Executive Chairman and Group Chief Executive Officer, AIA Group (October 2010 – December 2010) o Executive Chairman, American International Assurance Company, Limited (July 2010 – October 2010)

Group Chief Executive, Prudential plc, an international financial services group (2005-2009, and various other positions 1986-2003)

Group Finance Director, HBOS plc, a banking and insurance company in the United Kingdom (2004-2005)

Through his executive positions at AIA Group, Prudential plc and HBOS plc, Mr. Tucker brings to our Board substantial experience in the financial services industry, international business and global capital markets, particularly the Asia-Pacific region. This experience, along with his prior experience as a non-executive director on The Court of The Bank of England and member of its Audit and Risk and Financial Stability Committees, provides Mr. Tucker with a seasoned perspective on risk management and the stability of the financial system. 5. M. Michelle Burns

Chief Executive Officer, Retirement Policy Center, sponsored by Marsh & McLennan Companies, Inc. (MMC); Center focuses on retirement public policy issues (October 2011 - Present); Center Fellow and Strategic Advisor, Stanford University Center on Longevity (August 2012 - Present)

Chairman and Chief Executive Officer, Mercer LLC, a subsidiary of MMC and a global leader in human resource consulting, outsourcing and investment services (September 2006 – early October 2011)

Chief Financial Officer, MMC, a global professional services and consulting firm (March 2006 – September 2006)

Chief Financial Officer, Chief Restructuring Officer and Executive Vice President, Mirant Corporation, a competitive energy company (May 2004 – January 2006)

Executive Vice President and Chief Financial Officer, Delta Air Lines, Inc., an air carrier, which filed for protection under Chapter 11 of the United States Bankruptcy Code in September 2005 (including various other positions, 1999 – April 2004)

Senior Partner and Leader, Southern Regional Tax Practice, Arthur Andersen LLP, an accounting firm (including various other positions, 1981 –1999)

As the former Chief Financial Officer of several global public companies, Ms. Burns brings to our Board substantial expertise in accounting and the review and preparation of financial statements, which she draws upon as our Audit Committee Chair. In addition, as the former CEO of Mercer LLC, Ms. Burns brings to our Board her experience in human capital management and strategic consulting, which assists our Board in its oversight of our firm’s strategy. Through her service on the boards of directors and board committees of other public companies and not-for-profit entities, Ms. Burns has developed additional leadership and corporate governance expertise. 6. Claes Dahlback

Investor AB, a Sweden-based investment company

87

o Senior Advisor (April 2005 – Present) o Chairman (April 2002 – April 2005) o Vice-Chairman (April 1999 – April 2002) o President and Chief Executive Officer (1978 – 1999)

Senior Advisor, Foundation Asset Management, which is owned by three Wallenberg Foundations and acts as advisor to the Foundations with respect to their holdings (November 2007 – Present)

During his more than 30 years at Investor AB, Mr. Dahlbäck developed extensive experience in investment banking (through his involvement in Investor AB’s numerous mergers and acquisitions) and in investment management. Mr. Dahlbäck’s critical insight in these areas, along with his substantial experience in international business, assists our Board in its oversight of the firm’s global investment banking and asset management businesses. Through his current and prior service on the boards of directors and board committees of companies and not-for-profit entities, Mr. Dahlbäck has also developed expertise in corporate governance. 7. James A. Johnson

Chairman, Johnson Capital Partners, a private consulting company (Present)

Vice Chairman, Perseus L.L.C., a merchant banking and private equity firm (April 2001 – June 2012)

Fannie Mae o Chairman of the Executive Committee (1999) o Chairman and Chief Executive Officer (February 1991 – 1998) o Vice Chairman (1990 – February 1991)

Through his professional experience in financial services, Mr. Johnson brings extensive knowledge of the financial services and investment management industries to our Board. In addition, Mr. Johnson offers deep insight into governmental affairs and the regulatory process, gained from, among other things, his tenure at Fannie Mae and his work with Vice President Walter F. Mondale, including as the Vice President’s Executive Assistant. Since our initial public offering, Mr. Johnson’s commitment and service to our Board have been exemplary. His many years of service have provided him with a deep institutional knowledge base that helps provide perspective to our Board and guidance to our management. Further, he has extensive expertise in compensation matters at our firm and, as a result, has been an effective leader as Chair of our Compensation Committee. Through his service on the boards of directors of not-for-profit entities, Mr. Johnson has developed additional corporate governance expertise. 8. Adebayo. O. Ogunlesi

Chairman and Managing Partner, Global Infrastructure Partners, a private equity firm that invests worldwide in infrastructure assets in the energy, transport, and water and waste industry sectors (July 2006 – Present)

Credit Suisse, a financial services company o Executive Vice Chairman and Chief Client Officer (2004-2006) o Member of Executive Board and Management Committee (2002-2006)

o Head of Global Investment Banking Department (2002-2004) o Head of Global Energy Group (1997-2002) o Various positions (1983-1993)

Attorney, Cravath, Swaine & Moore LLP, a law firm headquartered in New York (1981-1983)

88

As Chairman and Managing Partner of Global Infrastructure Partners and a former executive of Credit Suisse with over 20 years of experience in the financial services industry, Mr. Ogunlesi has extensive knowledge of the global investment banking and private equity sectors. Mr. Ogunlesi provides our Board with an experienced outlook on international business and global capital markets, including emerging markets. Through his service on the boards of directors and board committees of other public companies and not-for-profit entities, and in particular as Chair of the Nominating and Corporate Governance Committees at Callaway Golf and Kosmos Energy, Mr. Ogunlesi has developed an in-depth knowledge of current corporate governance trends and best practices. 9. Debora L. Spar

President, Barnard College (July 2008 – Present)

Harvard Business School o Spangler Family Professor of Business Administration (2005 – 2008) o Senior Associate Dean; Director, Division of Research and Faculty Development (2005 – 2007) o Senior Associate Dean, Recruiting (2004 – 2005)

o Professor of Business, Government and Competition; Chair, Business, Government and the International Economy Unit (1999 – 2004) o Associate Professor of Business, Government and Competition (1995 – 1999) o Assistant Professor of Business, Government and Competition (1991 – 1995)

As the President of Barnard College and an author of numerous books, as well as by virtue of her previous experience as a professor at Harvard Business School, Dr. Spar

brings to our Board an academic perspective on government and public policy and, in particular, the international political economy and growth markets. Through her service on the boards of directors of not-for-profit entities, Dr. Spar has developed additional leadership and corporate governance expertise.

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Exhibit F: HSBC Holdings

Name Age Independent Director Since Other Board Commitments Experience

1. Douglas Flint 57 No 1995 n/a -

2. Stuart Gulliver 53 No n/a -

3. Iain MacKay 51 No n/a -

4. Safra Catz 51 Yes 2008 1. Oracle Corporation No

5. Laura Cha, GBS

63 Yes 2011 1. The Hongkong and Shanghai Banking Corporation Limited (non-executive Deputy Chairman) 2. Executive Council of Hong Kong SAR (non-official member) 3. Hong Kong Exchanges and Clearing Limited (director) 4. Tata Consultancy Services Limited (director) 5. ICAC Advisory Commission on Corruption (Chairman) 6. Yale School of Management Millstein Center of Corporate Governance and Performance (member of the advisory board) 7. Foundation Asset Management Sweden AB (Senior International Adviser) 8. State Bar of California (member) 9. Bank Communications Co. Ltd (non-executive director) 10. Baoshan Iron and Steel Co. Limited (non-executive director) 11. China Telecom Corporation (non-executive director)

Yes

6. Marvin Cheung, GBS, OBE

65 Yes 2009 1. Hang Seng Bank Limited (non-executive director) 2. Airport Authority Hong Kon (non-executive director) 3. HKR International Limited (non-executive director) 4. Hong Kong University of Science and Technology (non-executive chairman) 5. The Association of Former Council Members of the Stock Exchanve of Hong Kong Limited (director) 6. Hong Kong International Film Festival Society ltd (director)

No

7. James Comey 51 Yes 2013 1. Colombia University Law School New York (Senior Research

Fellow). Yes

8. John Coombe 68 Yes 2005 1. Hogg Robinson Group plc (non-executive chairman)

2. Home Retail Group plc (chairman) 3. Royal Academy of the Arts (trustee emeritus)*

No

9. Joachim Faber 63 Yes 2012 1. Coty Inc (independent director)

2. Allianz France SA (independent director) Yes

90

3. Allianz Investment managament GmBH (independent director) 4. Joh A Benckiser SARL (chairman of the board) 5. Deutsche Boerse AG (member of the supervisory board) 6. European School for Management and Technology (member of the supervisory board) 7. Siemens Group Pension Board ( member of the advisory board) 8. German Council for Sustainable Development ( member

10. Rona Fairhead, CBE 51 Yes 2004 1. UK Government;s Cabinet Office (non-executive board member)

2. The Economist Group (board member)* No

11. Renato Fassbind

58 Yes 2013 1. Swiss Reinsurance Company (Vice Chairman Supervisory Board and member of the audit and compensation committee) 2. Kuhne + Nagel International AG (member of the supervisory board and audit commitee) 3. Swiss Federal Oversight Authority (member of the supervisory board) 4. Oanda Corp. (board member)*

Yes

12. James Hughes-Hallet, CMG, SBS

63 Yes 2005 1. John Swire & Sons Limited (chairman) 2. Cathay Pacific Airways Limited (non-executive director) 3. Swire Pacific Limited (non-executive director) 4. Esmee Fairbairn Foundation (trustee) 5. Hong Kong Association (member) 6. Courtaild Institute of Art (Governing Board)

No

13. Sam Laidlaw 57 Yes 2008 1. Centrica plc (CEO)

2. Uk Department of Transport (lead non-executive board member) No

14. John Lipsky

66 Yes 2012 1. International Economics Program at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University (Distinguised Visiting Scholar) 2. Aspen Institute Program on the World Economy (co-director) 3. National Bureau of Economic Research (director) 4. Standford Institute for Economic Policy Research (member of the advisory board) 5. Council on Foreign Relations (member of the advisory board)

Yes

15. Rachel Lomax

67 Yes 2008 1. The Scottish American Investment Company PLC (non-executive director) 2. Reinsurance Group of America Inc (non-executive director) 3. Arcus European Infrastructure Fund GP LLP (non-executive director) 4. Heathrow Airport Holdings Limited (non-executive director) 5. Council of Imperial College (director) 6. Institute of Fiscal Studies (President)

Yes

16. Sir Simon Robertson 72 Yes 2006 1. Rolls-Royce Holdings plc (non-executive chairman) Yes

91

* these commitments were not mentioned on company website or in the related reports

Independent Director Experience Profiles 1. Safra Catz

Safra Catz was appointed to the Board in 2008. She has a background in international business leadership, having helped transform Oracle into the largest producer of business management software and the world's leading supplier of software for information management. Ms Catz is President and Chief Financial Officer of Oracle Corporation. She joined Oracle in 1999 and was appointed to the board of directors in 2001. She was formerly Managing Director of Donaldson, Lufkin & Jenrette. 2. Laura Cha, GBS

Laura Cha was appointed to the Board on 1 March 2011. She has extensive regulatory and policymaking experience in the finance and securities sector in Hong Kong and mainland China.

She was formerly Vice Chairman of the China Securities Regulatory Commission (2001-2004), being the first person outside mainland China to join the Central Government of the People's Republic of China at vice-ministerial rank. The Hong Kong Government has awarded her Gold and Silver Bauhinia Stars for public service. Ms Cha is a former Deputy Chairman of the Securities and Futures Commission in Hong Kong (1991-2001); and has worked in the USA and Asia. She is a non-executive Deputy Chairman of The Hongkong and Shanghai Banking Corporation Limited; a Non-Official Member of the Executive Council of Hong Kong SAR; a director of Hong Kong Exchanges and Clearing Limited and Tata Consultancy Services Limited; Chairman of the ICAC Advisory Committee on Corruption; a Hong Kong Deputy to the 12th National People's Congress of China; a member of the Advisory Board of the Yale School of Management Millstein Center of Corporate Governance and Performance; a Senior International Advisor for Foundation Asset Management Sweden AB; and a member of the State Bar of California. She earned a BA degree from the University of Wisconsin and a JD degree from the Santa Clara University in California. She is a non-executive director of the Bank of Communications Co., Ltd., Baoshan Iron and Steel Co. Limited, Johnson Electric Holdings Limited, and China Telecom Corporation Limited; and was Chairman of the University Grants Committee in Hongkong from 2007 to 2011. 3. Marvin Cheung, GBS, OBE

Marvin K T Cheung has a background in international business and financial accounting, particularly in Greater China and the wider Asian economy.

He retired from KPMG Hong Kong in 2003 after more than 30 years and became a member of the HSBC Board of Directors in 2009. He was awarded the Gold Bauhinia Star by the Hong Kong Special Administrative Region Government in 2005 and is a Fellow of the Institute of Chartered Accountants in England and Wales. Mr Cheung is a non-executive director of Hang Seng Bank Limited; non-executive chairman of the Airport Authority Hong Kong; non-executive director of HKR International Limited; non-executive chairman of the Council of the Hong Kong University of Science and Technology; and a director of The Association of Former Council Members of The Stock Exchange of Hong Kong Limited and The Hong Kong International Film Festival Society Ltd.

2. Robey Associates LLP (founding member) 3. Berry Bros & Rudd Limited (non-executive director) 4. The Economist Newspaper Limited (non-executive director_ 5. Troy Asset Management (non-executive director) 6. NewShore Partners LLP (partner) 7. Eden Project (trustee) 8. Royal Opera House Endowment Fund (trustee)

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Previous appointments include non-executive director of Sun Hung Kai Properties Limited and Hong Kong Exchanges and Clearing Limited; Chairman and Chief Executive Officer of KPMG Hong Kong; and a council member of the Open University of Hong Kong. 4. James Comey

James Brien Comey Jr was appointed to the Board on 4 March 2013. He is an independent non-executive Director and a member of the Financial System Vulnerabilities Committee. Mr Comey is a Senior Research Scholar and Hertog Fellow on National Security Law at Columbia University Law School in New York. He recently stepped down as General Counsel of Bridgewater Associates, LP and was, from 2005 to 2010, Senior Vice President and General Counsel of the Lockheed Martin Corporation. From 2003 to 2005, Mr Comey served as United States Deputy Attorney General and was responsible for supervising the operations of the Department of Justice and chaired the President’s Corporate Fraud Task Force.

Prior to becoming United States Deputy Attorney General, Mr Comey was United States Attorney for the Southern District of New York. From 1996 to 2001, Mr Comey served as Managing Assistant United States Attorney in charge of the Richmond Division of the United States Attorney’s office for the Eastern District of Virginia. 5. John Coombe

John Coombe has a background in international business, financial accounting and the pharmaceutical industry. He joined HSBC as a non-executive Director in 2005.

He was Chief Financial Officer of GlaxoSmithKline with responsibility for the group's financial operations globally, and is a Fellow of the Institute of Chartered Accountants in England and Wales.

He is a non-executive Chairman of Hogg Robinson Group plc and Chairman of Home Retail Group plc. Mr Coombe was previously Executive Director and Chief Financial Officer of GlaxoSmithKline plc; non-executive director of GUS plc; a member of the Supervisory Board of Siemens AG; Chairman of The Hundred Group of Finance Directors; and a member of the Accounting Standards Board. 6. Joachim Faber

Joachim Faber was appointed to the Board on 1 March 2012. He has a background in banking and asset management with significant international experience, having worked in Germany, Tokyo, New York and London. Mr Faber was formerly Chief Executive Officer of Allianz Global Investors AG and a member of the management board of Allianz SE from October 2006 until 31 December 2011. He is an independent director of Coty Inc, Allianz France SA and Allianz Investment Management GmbH, as well as the Chairman of the board of Joh A Benckiser SARL and the supervisory board of Deutsche Boerse AG. He is a member of the supervisory board of the European School for Management and Technology, the advisory board of the Siemens Group Pension Board and a member of The German Council for Sustainable Development. He has 14 years’ experience with Citicorp, holding positions in Trading and Project Finance and as Head of Capital Markets for Europe, North America and Japan. He holds a law degree from Bonn University and has a doctorate from the German University of Administrative Sciences in Speyer. 7. Rona Fairhead, CBE

Rona Fairhead joined the Board in December 2004. She has a background in international industry, publishing, finance and general management.

She was formerly Finance Director of Pearson plc with responsibility for overseeing the day-to-day running of the finance function and directly responsible for global financial reporting and control, tax and treasury. Ms Fairhead has a Master's degree in Business Administration from the Harvard Business School. She is currently a non-executive member of the board of the UK Government's Cabinet Office.

Formerly, Ms Fairhead was executive vice president, Strategy and Group Control of Imperial Chemical Industries plc; chief financial officer and a director of Pearson plc; chairman and a director of Interactive Data Corporation; and chairman, chief executive officer and a director of the Financial Times Group Limited

93

8. Renato Fassbind

Renato Fassbind was appointed to the Board on 1 January 2013. He was Chief Financial Officer and member of the Executive Board of Credit Suisse Group AG from June 2004 until September 2010. He is Vice Chairman of the Supervisory Board and a member of the audit and the compensation committee of Swiss Reinsurance Company, a member of the Supervisory Board and audit committee of Kühne + Nagel International AG and a member of the Supervisory Board of the Swiss Federal Audit Oversight Authority. Before joining Credit Suisse, Mr Fassbind was the Chief Executive Officer of Diethelm Keller Group from 2002 to 2004. Between 1997 and 2002, he was the Chief Financial Officer at ABB AG. Mr Fassbind has a PhD in Economics from the University of Zurich. He is married with two children and lives in Switzerland. 9. James Hughes-Hallet, CMG, SBS

James Hughes-Hallett was appointed to the Board in 2005. He has a background in financial accounting and management experience in aviation, insurance, property, shipping, manufacturing and trading businesses in the Far East, UK, USA and Australia. The Hong Kong Special Administrative Region Government awarded him the Silver Bauhinia Star in 2004. He is a Fellow of the Institute of Chartered Accountants in England and Wales. Mr Hughes-Hallett is chairman of John Swire & Sons Limited; a non-executive director of Cathay Pacific Airways Limited and Swire Pacific Limited; a trustee of the Esmée Fairbairn Foundation; and a member of The Hong Kong Association and the Governing Board of the Courtauld Institute of Art. He was previously a non-executive Director of The Hongkong and Shanghai Banking Corporation Limited. 10. Sam Laidlaw

Sam Laidlaw was appointed to the Board in 2008. He has significant international experience, particularly in the energy sector, having had responsibility for businesses in four continents.

He is a qualified solicitor and has a Master's degree in Business Administration from INSEAD. He is currently Chief Executive Officer of Centrica plc and the lead non-executive Board Member of the UK Department for Transport. His previous roles include Executive Vice President of Chevron Corporation; a non-executive director of Hanson PLC; Chief Executive Officer of Enterprise Oil plc; and President and Chief Operating Officer of Amerada Hess Corporation. 11. John Lipsky

John Lipsky was appointed to the Board in March 2012. He served at the International Monetary Fund as First Deputy Managing Director from september 2006 till august 2011, Acting Managing Director from May 2011, and as Special Advisor from September 2011, until retirement in November 2011. Mr Lipsky’s international experience includes having worked in Chile, New York, Washington and London. He has interacted with financial institutions, central banks and governments in many countries. He is currently Distinguished Visiting Scholar, International Economics Program at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University; a co-director of the Aspen Institute Program on the World Economy; a director of the National Bureau of Economic Research; and a member of the advisory board of the Stanford Institute for Economic Policy Research and the Council on Foreign Relations.

Previously he was Vice Chairman of the J P Morgan Investment Bank; a director of the American Council on Germany and the Japan Society; and a trustee of the Economic Club of New York.

94

12. Rachel Lomax

Rachel Lomax joined the HSBC Board of Directors in 2008. She has experience in the public and private sectors, plus a deep knowledge of the operations of the UK government and financial system. Her previous appointments include Deputy Governor, Monetary Stability, at the Bank of England (2003-2008)and a member of the BoE’s Monetary Policy Committee; Permanent Secretary at the UK Government Departments for Transport and Work and Pensions and the Welsh Office; and Vice President and Chief of Staff to the President of the World Bank. Currently, she is a non-executive director of The Scottish American Investment Company PLC, Reinsurance Group of America Inc., Arcus European Infrastructure Fund GP LLP and Heathrow Airport Holdings Limited (formerly BAA Limited); a director of the Council of Imperial College, London; and President of the Institute of Fiscal Studies. 13. Sir Simon Robertson

Sir Simon Robertson has a background in international corporate advisory with a wealth of experience in mergers and acquisitions, merchant banking, investment banking and financial markets. He was honoured with a knighthood in recognition of his services to business. Sir Simon joined the Board in 2006. His extensive international experience included working in France, Germany, the UK and the USA.

Since 23 February 2011, he has been non-executive Chairman of Rolls-Royce Holdings plc, which became the holding company of the Rolls-Royce group of companies on 23 May 2011 as part of a group restructuring. He was Chairman of Rolls-Royce Group plc, formerly the holding company of the Rolls-Royce group of companies, until 23 May 2011. He is the founding member of Robertson Robey Associates LLP (formerly Simon Robertson Associates LLP); a non-executive director of Berry Bros & Rudd Limited, The Economist Newspaper Limited and Troy Asset Management; a partner of NewShore Partners LLP; and a trustee of the Eden Project Trust and of the Royal Opera House Endowment Fund. His previous roles included Managing Director of Goldman Sachs (1997-2005) International and chairman of Dresdner Kleinwort Benson.

95

Exhibit G: Credit Agricole Group

Name Age Independent Director Since Other Board Commitments Experience

1. Jean-Marie Sander 63 No May 2010 N/A -

2. Lefebvre Dominique 51 No May 2010 N/A -

3. Philippe Brassac 53 No January 2010 N/A -

4. Pascale Berger No May 2013 N/A -

5. Caroline Catoire

57 Yes May 2011 1. Groupe Saur (CFO & Executive Commitee Member)

2. Société Coved (director)

3. Société Saurea (director)

No

6. Patrick Clavelou 62 No January 2009 N/A -

7 Jean-Louis Delorme 63 No February 2012 N/A -

8. Laurence Dors

57 Yes May 2009 1. Cap Gemini (non-executive independent director)

2. Egis S.A. (non-executive independent director)

3. Cabinet Anthenor Partners (senior partner)

4. Institut Français des Administrateurs (director)

5. INHESJ (director)

No

9. Veronique Flachaire 55 No February 2010 N/A -

10. Francoise Gri

55 Yes May 2012 1. Pierre & Vacances-Center Parcs Group (CEO)

2. Institut de l'Entreprise (Deputy Chairwoman)

3. Edenred S.A. (non-executive independent director)

4. MEDEF Ethics Committee (member)

5. Conseil économique, social et environnemental (member)

No

11. Bernard Lepot 61 No February 2010 N/A -

12. Monica Mondarini

52 Yes May 2010 1. Gruppo Editoriale L’Espresso (Deputy Director)

2. SCOR SE (director)

3. Atlantia S.p.A. (director)

4. Trevi Group S.p.A. (director)

5. Save the Children Italy (director)

No

13. Marc Pouzet 61 No May 2012 N/A -

14. Jean-Claude Rigaud 64 No May 2012 N/A -

96

Independent Director Experience Profiles157 1. Caroline Catoire

She is on the Board of Directors at Crédit Agricole SA, Eaux de Royan SA, Collectes Valorisation Energie Dechets SA, and Société Saurea.

Ms. Catoire was previously employed as Chief Financial Officer by SITA France SA and a Member-Supervisory Board by Saur Polska Sp zoo. She also served on the board at BRL Exploitation SA and Société des Eaux du District Urbain de Dinan. She received her undergraduate degree from Ecole Polytechnique and a graduate degree from Ecole Nationale des Ponts et Chaussées.

157 All background informatoion is gathered from investing.businessweek.com, markets.ft.com and/or qoutes.wsj.com. The Credit Agricole Group website and Corporate Governance reports did not give extensive background information about these directors.

15. Jean Louis Roveyaz 62 No May 2012 N/A -

16. Christian Streiff

58 Yes May 2011 1. C.S. Conseils (chairman)

2. ThyssenKrupp AG (director)

3. Finmeccanica SpA (director)

4. TI-Automotive (director)

5. Bridgepoint (director)

No

17. Christian Talgorn 64 No May 2010 N/A -

18. Fracois Veverka

61 Yes May 2008 1. CACIF (director)

2. Sofiproteol ( chairman)

3. Copa (deputy Chairman)

4. FNSEA (chairman)

5. Conseil économique et social régional du Centre (chairman)

6. Chambre départementale d’agriculture du Loiret (chairman)

7. EOA (European oilseeds alliance) (chairman)

8. Grand Port Maritime de la Rochelle (chairman)

9. Chambre régionale d’agriculture du Centre (first deputy chairman)

10. Department Federation of Farmer’s Unions (deputy Chairman)

11. Foundation for World Agriculture and Rural Life (FARM) (director)

Yes

19. Xavier Beulin 55 No September 2011 N/A -

20.Fracois Heyman 54 No June 2012 N/A -

21. Chistian Moueza 56 No June 2012 N/A -

97

2. Laurence Dors

Ms. Laurence Dors has been a Senior Executive Vice President of Global Development and Resources of Dassault Systèmes since April 2008. Ms. Dors served as Corporate Secretary General at Renault Société Anonym (also known as Renault SA) until April 2011. She served as General Secretary of European Aeronautic Defence and Space Company EADS N.V. since February 1, 2003. She served as General Secretary of EADS International from 2000 to 2003. She was responsible for the follow-up of major export deals and supervising the appropriate EADS International support to the Business Units as well as managing the EADS International organization. She served as General Secretary of the Lagardère Directorate for International Affairs and the Aerospatiale Matra Lagardère International organization. From 1994 to 1995, Ms. Dors served as Advisor for Economic International Affairs to the former French Prime Minister Alain Juppé and the former Minister of Economy Edmond Alphandéry. She started her career in the international services of the French Ministry of Economy and Finance where she held several executive management positions. In April 1998, she joined Lagardère Group at the International division. She has been a Director of Credit Agricole SA since May 19, 2009 and Cap Gemini S.A since 2010. Ms. Dors serves as a Director of Egis S.A. and Vigeo SAS. She served as a Director of RCI Banque S.A. In 1997, she was appointed Deputy Director at Direction des Relations Economiques Extérieures. 3. Francoise Gri

rs. Françoise Gri has been the Chief Executive Officer of Pierre & Vacances SA at Centers Parcs Group since January 1, 2013. Mrs. Gri served as an Executive Vice President at Manpower Inc. from February 2007 to December 31, 2012 and its President of Southern Europe from January 10, 2011 to December 31, 2012. She served as the President at Manpower France SAS, a subsidiary of Manpower Inc. from February 2007 to December 2010. She held various leadership roles with IBM from 1981 to February 2007 including, Regional General Manager of France, Belgium and Luxembourg. She served as an Executive Vice President at ManpowerGroup Inc. from February 2007 to December 31, 2012 and also served as its President of Southern Europe Operations from January 10, 2011 to December 31, 2012 and President of France Operations from February 2007 to December 2010. She served as an Executive Vice President at ManpowerGroup Inc. from February 2007 to December 31, 2012 and also served as its President of Southern Europe Operations from January 10, 2011 to December 31, 2012 and President of France Operations from February 2007 to December 2010. She served as the President and Director General of France and North Africa division for International Business Machines Corp.(IBM), where she spent there for 26 years. She served at IBM where she successively held the positions of Sales Representative, Account Manager and Sales Manager from 1982 to 1989, Executive Assistant to the President of IBM France since 1990, Vice President of Government and Public Sector at IBM France from 1991 to 1997, Vice President of e- Business Solutions division, Vice President of Sales Support & Operations division and Vice President of Marketing & Channels division at IBM EMEA from 1996 to 2000, Vice President of Sales Operations division at IBM EMEA from 2000 to 2001 and President of IBM France from 2001 to 2007. She has been a Director of Credit Agricole S.A. since May 2012 and Pierre & Vacances SA since December 3, 2012. She has been an Independent Director at Edenred SA since June 29, 2010. She serves as a Director of Ecole Centrale, Paris and Institut de l'Entreprise. She served as a Member of the Supervisory Board at Rexel SA since May 20, 2010. She served as a Director of Aker Yards ASA. (renamed STX Europe, a South Korean shipbuilding company) from 2007 to 2008. She served as a Director of STX Europe ASA from May 21, 2008 to March 12, 2009. She holds a number of leadership positions in business and academic circles. In 2005, 2006 and 2009, she was named to Fortune's 50 Most Powerful Women in Business - International. She received the title of Chevalier de l'Ordre National de la Legion d'Honneur and the title of Chevalier de l'Ordre National du Merite. Mrs. Gri earned a Master of Science in Computer Engineering from Ecole Nationale Superieure d'Informatique et Mathematiques Appliquees ENSIMAG) in Grenoble, France. 4. Monica Mondarini

Ms. Monica Mondardini has been the Chief Executive Officer of Compagnie Industriali Riunite Società per Azioni since April 2013. Ms. Mondardini has been the Chief Executive Officer of Gruppo Editoriale L' Espresso SpA since January 1, 2009 and has been its Managing Director since 2008. Ms. Mondardini served as Director General of Gruppo Editoriale L' Espresso SpA since January 1, 2009. Ms. Mondardini's first professional experience was in publishing, first with the Fabbri group, then with Hachette, where served as Director of the "High-quality illustrated books" division based in Paris. In 1998, she joined the Generali group as Managing Director of Europ Assistance in Paris. Ms. Mondardini joined the headquarters of the Generali group and was responsible for the Planning and Control department. Since 2001, she served as Managing Director of Generali Espana. She serves as an Executive Director of Compagnie Industriali Riunite Società per Azioni. She serves as a Director of Sogefi SpA. She has been a

98

Director of Atlantia SpA since January 20, 2012. She has been a Director of Gruppo Editoriale L' Espresso SpA since January 1, 2009 and Credit Agricole SA since May 18, 2010. She served as a Director of SCOR SE from April 28, 2010 to April 25, 2013. Ms. Mondardini holds a Degree in Economic and Statistical Sciences from the University of Bologna. 5. Christian Streiff

He served as the Chief Executive Officer and Member of Managing Board at PSA Peugeot Citroën S.A. and Peugeot S.A. since November 7, 2006. Special Advisor to the Chairman of the Managing Board of PSA Peugeot Citroen since November 7, 2006 and Chairman of Managing Board since February 6, 2007. The President and Chief Executive Officer at Airbus S.A.S at European European Aeronautic Defence and Space Company EADS N.V from July 2006 to October 9, 2006. Senior Vice President of CSG and Head of Abrasives and Ceramics & Plastics Divisions of Grindwell Norton Ltd. Chief Operating Officer of Compagnie de Saint-Gobain from April 1, 2004 to April 5, 2005, Deputy Chief Executive Officer from 2004 to May 2005 and served as its Senior Vice President. President of the Abrasives and Ceramics & Plastics Divisions of Saint Gobain. President and Chief Executive Officer of High-Performance Materials Division, Paris of Saint-gobain from 2001 to 2003. President of the Pipe Division and Chief Executive Officer of Pont-à-Mousson SA, Nancy from 1996 to 2000. He served as the Chief Executive Officer of Saint-Gobain Emballage since 1994. He served as a General Manager of Vetrerie Italaine Spa in Italy from 1991 to 1993. General Manager of Gevetex GmbH from 1988 to 1991. After joining Saint Gobain in 1979, he held several positions in manufacturing and as Corporate Planning Manager. He served as the Vice President of Planning and Strategy of Fiber Reinforcements Division of Saint-gobain from 1982 to 1985. He served as a General Manager of Saint-Gobain Emballage, Paris from 1994 to 1996. General Manager of Vetri SpA, Italy (packaging) of Saint-gobain from 1991 to 1994. He served as a Production Manager of Halbergerhütte foundry, Germany of Saint-gobain from 1979 to 1982. Having occupied several posts in Germany with Halbergerhutte (Pipe Division) and Vetrotex Deutschland (Reinforcements), he served in Italy with Vetr.I. (Containers). He joined CSG in 1979 and gained rich experience in various fields. He has management experience in many different countries, including placements in Germany, Italy and the US, as well as France. He served as an Executive Chairman of Airbus S.A.S. from February 6, 2007 to October 9, 2006. He served as the Chairman of Pont-a-Mousson SA. since October 15, 2001. He served as Chairman of Grindwell Norton Ltd. from December 4, 2002 to July 27, 2005. He served as the Chairman of Société Européenne des Produits Réfractaires-SEPR. He serves as a Non-Executive Director of Thyssen-kruppand, Banque PSA Finance and Peugeot Citroën Automobiles. He serves as a Director of ThyssenKrupp Services AG. He has been a Non-Executive Director of Credit Agricole SA since May 18, 2011 and Finmeccanica SpA since December 1, 2011. He has been a Member of the Supervisory Board of ThyssenKrupp AG and Prysmian SpA (Italy) since 2005. He serves as a Member of European Advisory Board of Bridgepoint Advisers Limited. He has been a Member of the Supervisory Board of ThyssenKrupp Services AG since 2005. He served as an Independent Director of Prysmian Cables and Systems. He served as a Director of Faurecia SA since February 2, 2007. He served as a Member of Supervisory Board and Member of Board of Directors from October 14, 2005 to February 3, 2009. He served as a Director of Grindwell Norton Ltd. until July 27, 2005. He served as a Director of Saint-Gobain Advanced Ceramics Corp., PAM Colombia S.A. and Carborundum Ventures Inc. He served as a Director of Airbus S.A.S. until October 9, 2006. He served as a Director of Gevetex Plant of Saint-gobain since 1985 to 1988. He served as a Director of Société Européenne des Produits Réfractaires-SEPR and Continental AG. He served as a Director of Saint-Gobain Ceramics & Plastics Inc., Saint-Gobain Performance Plastics Corp., Saint-Gobain Abrasivos S.A. He served as an Independent Director of Prysmian SpA. He served as Director of Saint-Gobain KK. He served as a Member of Supervisory Board at Continental AG from October 14, 2005 to February 3, 2009. Mr. Streiff is a Civil Engineering Graduate of the Ecole Nationale Supérieure de Mines de Paris. 6. Francoise Ververka

Mr. Véverka served as the Chief Executive Officer of Compagnie de Financement Foncier from February 2007 to November 13, 2007. He served as an Executive Managing Director of Standard and Poor's - Institutional affairs for European operations since December 2006 and Executive Managing Director of Standard & Poor's Europe - Credit Market Services since December 2004. He has been a Director of Calyon Bank Czech Republic A.S. since 2009. He has been Director of Credit Agricole Corporate and Investment Bank since May 13, 2009. He serves as a Director of Credit Agricole SA., LCL, and Crédit Agricole Corporate and Investment Bank. He has been an Independent Director of Credit Agricole SA since May 30, 2008. Mr. Veverka serves as a Member of Supervisory Board of Octofinances. He served as Teacher of ESCP-EAP - É cole Polytechnique Fédéralede!Lausanne.

99

Exhibit H: BNP Paribas

Name Age Independent Director Since Other Board Commitments Experience

1. Boudouin Prot NO March 2000 N/A -

2. Michael Pebereau NO May 1993 N/A -

3. Jean-Laurent Bonnafe NO May 2010 N/A -

4. Pierre-Andre de Chalendar

Yes May 2012 1. Verallia (Chairman) 2. Veolia Environnement (Director) 3. Saint-Gobain Corporation (director) 4. GIE SGPM Recherches (director)

No

5. Christophe de Margerie

Yes May 2013 1. Groupe Total S.A. (director) 2. Vivendi (director) 3. Shtokman Developmen AG (director) 4. Institut du Monde Arabe (director)

No

6. Marion Guillou

Yes May 2013 1. Areva (director) 2. Imerys (director) 3. Veolia (director) 4. Apave (director)

No

7. Denis Kessler

Yes May 2000 1. Yam Invest N.V. (member of the supervisory board) 2. Commission Economique de la Nation (member) 3. Association de Geneve (member of the board) 4. Association du Siecle (board member) 5. Global Reinsurance Forum (member) 6. Reinsurance Advisory Board (member) 7. Laboratoire d’Exellence Finance et Croissance Durable (member)

No

8. Jean-Francois Lepetit

Yes May 2004 1. Smart Trade Technologies SA (director 2. Shan SA (director( 3. Qatar Financial Centre Regulatory Authority (board member_ 4. Consell de regulation financiere et du risque systemique (member)

Yes

9. Nicole Misson No July 2011 N/A -

10. Thierry Mouchard No February 2012 N/A -

11. Laurence Pasirot Yes May 2006 1. Mouvement des Enterprises de France (chairman)

2. Coface SA (director) 3. SCA (member supervisory board)

No

12. Helene Ploix Yes March 2003 1. Pechel Industries Partenaires SAS (permanent representative)

2. Goemar Holding (permanent representative) 3. Store Electronic Systems (permanent representative)

Yes

100

Independent Director Experience Profiles 1. Pierre-Andre de Chalendar

158

Mr. Pierre-André de Chalendar has been the Chairman and Chief Executive Officer at Compagnie De Saint-Gobain Zweigniederlassung Deutschland since June 3, 2010. Mr. de Chalendar serves as Head of Saint-Gobain's UK Delegation of Saint-Gobain Abrasives Ltd. He has been Chief Executive Officer of Saint-Gobain since June 7, 2007 and has been its Chairman since June 3, 2010. He serves as Chairman of the Board and Chief Executive Officer of Saint-Gobain Corporation. He serves as the Chief Executive

158 Background informatoion from investing.businessweek.com. BNP Paribas website and Corporate Governance reports did not give extensive background information about this director.

4. Publicis Groupe (member of the supervisory board) 5. Goermar Developpement (member of the supervisory board) 6. Laboratories Goemar (member of the supervisory board) 7. Helene Ploix SARL (manager) 8. Helene Marie Joseph SARL (manager) 9. Sorepe Societe Civile (manager) 10. Institut Francais de Administrateurs (member_ 11. OMM (member)

13. Michael Tilmant

Yes May 2010 1. Guardian Holdings Limited (chairman) 2. Guardian Acquisitions Limited (chairman) 3. Sofina SA (director) 4. Groupe Lhoist SA (director) 5. Foyer Assurances SA (director) 6. CapitalatWork Foyer Group SA (director) 7.Université Catholique de Louvain (director) 8 Royal Automobile Club of Belgium (director) 9. Cinven ltd (senior advisor)

Yes

14. Emiel van Broekhoven Yes May 2010 - NONE No

15. Daniela Weber-Rey

Yes May 2008 1. German Government’s Code of Corporate Governance Commission (member) 2. Stakeholder Group of the European Insurance and Occupational Pensions Authority (EIOPA) (member) 3. Clifford Chance Partnership Council (member) 4. European Corporate Governance Institute (ECGI) (board member) 5. International Institute for Insurance Regulation (ICIR (Advisory Board member )

No

16. Fields Wicker-Miurin Yes May 2011 1. CDC Group Plc (director)

2. Ballarpur International Graphic Paper Holdings (director) 3. Battex School of Leadership - University of Virginia (board member)

101

Officer of Saint Gobain Global of Saint-Gobain Corporation. He served as the Managing Director and Chief Operating Officer of Saint-Gobain since June 7, 2007 and May 4, 2005, respectively. He served as Senior Vice President of Saint Gobain and President of the Building Distribution Sector since 2003. He joined Saint Gobain Group in 1989 as Vice President of Corporate Planning and served as its Head and Director of the Abrasives Division, Europe from 1992 to 1996, and also as its President of the Abrasives Division from 1996 to 2000. Mr. de Chalendar served as Director of the worldwide Abrasives Division of Saint Gobain from 1996 to 2000. From 2000 to 2002, he worked at Saint Gobain's General Delegate to the United Kingdom and the Republic of Ireland, as well as President-Delegate of the Building Distribution Division for the United Kingdom and the United States. He served as President of CertainTeed Corporation. He has been Chairman of Verallia SA since March 29, 2011. He serves as the Chairman of Groupe Lapeyre. He has been the Chairman of the Board at BPB Plc since December 7, 2005. He serves as the Chairman of Saint-Gobain. He served as Chairman of Saint-Gobain Oberland AG. He has been an Independent Director of Veolia Environnement S.A. since May 2010. He has been a Director of BNP Paribas SA since May 23, 2012. He serves as Director of Saint-Gobain Distribution Nordic AB, SG Aldwych, Saint-Gobain Corporation, SG Nordic AB and Dahl International AB. He has been an Executive Director of Saint-Gobain of Saint-Gobain Vidros S.A. since June 2006. He served as a Director of Veolia Environnement SA since May 2009. He served as Director of Grindwell Norton Limited from July 27, 2005 to March 6, 2006. Mr. de Chalendar is a graduate of ESSEC Business School and also studied at the National Administration School (ENA). 2. Christophe de Margerie

159

Mr. Christophe de Margerie is an Independent Director of BNP Paribas SA as of May 15, 2013. He is Chairman and Chief Executive Officer of the TOTAL Group, where he has spent his entire career. He held various roles within the financial management and the exploration and production division of the group, before being appointed as Managing Director of Exploration and Production. He then became a Member of the Board of Directors of Total on May 12, 2006, Chief Executive Officer on February 14, 2007 and Chairman of the Board in May 2010. He graduated from Ecole Superieure de Commerce de Paris in 1974. 3. Marion Guillou

160

Ms. Marion Guillou is an Independent Director of BNP Paribas SA as of May 15, 2013. Ms. Guillou, former student of the Ecole Polytechnique and Chief Engineer of Genie Rural, also holds a Doctorate degree in Food Science. She spent her career in the Ministry of Agriculture and also run the Institut National de la Recherche Agronomique (INRA). She has been the Chairman of the Board of Ecole Polytechnique since 2008. 4. Denis Kessler

161

Mr. Denis Kessler has been the Chairman and Chief Executive Officer of SCOR SE since November 4, 2002. Mr. Kessler serves as the Chairman and Chief Executive Officer of SCOR Holding (Switzerland) Ltd. He served as the Chairman and Chief Executive Officer of SCOR Global Life since November 4, 2002. He served as the President of SCOR Life US Reinsurance (USA) and SCOR Reinsurance Company Corporate (United States). He has been the Chairman of SCOR VIE since June 9, 2004. He serves as the Chairman of SCOR Life US Reinsurance (United States), SCOR Reinsurance Company (United States), Scor Italia Riassicurazioni S.p.a. (Italy), SCOR US Corporation (United States), Commercial Risk Partners (Bermuda), Commercial Risk reinsurance Company Ltd (United States), General Security Indemnity Company (United States), General Security National Insurance Company (United States), General Security Indemnity of Arizona (United States), Investors Insurance Corporation (United States), Investors Marketing Group Inc. (United States) and Republic Vanguard Life Insurance Company (United States). He serves as the Chairman of SICAV ABF Moyen Terme and of SICAV Orsay 1re. Mr. Kessler serves as the Vice-Chairman of Société d'Économie Politique. He serves as the Executive Vice Chairman of the French Business Confederation (MEDEF) and the Vice Chairman of the Comité Européen des Assurances (CEA). He has been a Director of BNP Paribas Hungaria Bank Rt. since May 23, 2000. He has been a Non Executive Director of Invesco Ltd. since March 2002. He has been a Director of SCOR since November 4, 2002. He serves as a Director of SCOR Life US Reinsurance. He has been a Director of SCOR VIE since June 9, 2004. He has been an Independent Director of Dexia S.A. since 1999. He serves as a Director at Dassault Aviation. He has been a Director of Bolloré and Bolloré Investissement SA since October 14, 1999. He has been an Independent Director of Dexia Bank Belgium N.V.

159 Background informatoion from markets.ft.com. BNP Paribas website and Corporate Governance reports did not give extensive background information about this director. 160 Background informatoion from markets.ft.com. BNP Paribas website and Corporate Governance reports did not give extensive background information about this director. 161 Background informatoion from investing.businessweek.com, BNP Paribas website and Corporate Governance reports

102

since 1999. He serves as a Director of COGEDIM SAS and Non-Voting Director of FDC S.A. He serves as a Director of Gimar Finance Sca. He serves as a Director of SCOR Italia Riassicurazioni S.P.A., Amvescap Plc (United Kingdom), British legal company, SCOR Canada Reinsurance Company (Canada), Commercial Risk Re-Insurance Company (United States) and Vendome Rome Group. He serves as a Member of the Supervisory Board of Cetelem, Scor Deutschland, Yam Invest N.V. and COGEDIM SAS. He served as a Director of Scor Global Life. He is a Member of Conseil économique et social, Conseil National des Assurances and Commission économique de la Nation. He serves as the Chairman of the Scientific Council of the Association de Genève. He is a Member of Comité des Entreprises d'Assurance and Global Counsellor of the Conference Board. He serves as a Director of Fonds Stratégique d'Investissement SA. He is a noted Economist. Mr. Kessler is a Graduate from Ecole des Hautes Etudes Commerciales (Business School), France. He holds a Diploma from HEC (Paris Business School), France, and a Doctorate in Economics from the University of Paris, France. He studied Postgraduate Degrees in Political Science, Applied Economics and Philosophy. 5. Jean-Francois Lepetit

162

Mr. Lepetit served as an Adviser to the Chairman and Chief Executive Officer of BNP from 1997 to 2000. Mr. Lepetit served as Senior Manager, Assistant Director, Deputy Director, Managing Director and Vice-President of Banque Indosuez at Indosuez Group until 1996. He served Banque de Paris et des Pays-Bas from 1963 to 1969. He serves as the Chairman of Advisory Board of EDHEC Desk and Asset Management Research Center. Mr. Lepetit served as the Chairman of the Commission des Opérations de Bourse (COB) from October 2002 to November 2003. Mr. Lepetit served as Chairman of the French stock market and financial markets authorities, Commission des Operations de Bourse and Conseil des Marches Financiers. He served as Chairman of Conseil des Marchés Financiers (CMF) since 1998. He has been a Director of Bnp Paribas and BNP Paribas Hungaria Bank Rt. since May 18, 2005. He has been a Director of BNP Paribas North America, Incorporated since May 2005. He serves as a Director of Smart Trade Technologies S.A, QFC Regulatory Authority and Shan SA. He serves as a Member of QFCRA (Qatar Financial Center Regulatory Authority, Doha. He served as a Member of the Conseil des Marchés Financiers (CMF) since 1996. He served as Director of Banque Indosuez at Indosuez Group until 1996. He joined the Collège de la Commission des Opérations de Bourse (COB) in 1998, and served as its Member of the Comité des Établissements de Crédit et des Entreprises d’Investissement (CECEI) and the Comité de la Réglementation Bancaire et Financière (CRBF). Mr. Lepetit is a graduate of HEC Paris Business School and has an Undergraduate Degree in Law. 6. Laurence Parisot

163

Mrs. Parisot served as the Chairperson and Chief Executive Officer of Optimum SA until March 2006. She served as Head of MEDEF since July 2005. In 1986, she became Chief Executive Officer of the Institut Louis Harris France, a survey institute. She began her career as a Researcher. She has been Chairman of the French Business Confederation (Mouvement des Entreprises de France - MEDEF) since July 2005. She serves as Vice Chairman of IFOP S.A. She has been an Independent Director of Coface SA. since February 20, 2007 and Director of BNP Paribas North America, Inc. since May 2006. She has been a Director of BNP Paribas Hungaria Bank Rt., since May 23, 2006. She has been a Member of the Supervisory Board of Michelin SCA since 2005. She has been a Member of the Supervisory Board at Compagnie Generale Des Etablissements Michelin SCA since May 20, 2005. She served as a Director of Bnp Paribas from May 23, 2006 to June 2006. She served as a Director of Havas SA., from June 9, 2005 to June 2006. She served as a Member of the Supervisory Board of Euro Disney SCA from 2000 to January 2006. Mrs. Parisot is a member of the Executive Committee and of the Office of the Executive Committee of the MEDEF (Mouvement des Entreprises de France), a confederation of French businesses; of the Economic and Social Committee, a constitutional assembly and serves as a Member of the Advisory Board of Ernst and Young. She is a Member of the French Economic and Social Council (Conseil Economique et Social - CES). Mrs. Parisot is a graduate of the Institut dEtudes Politiques de Paris and holds a Masters in Public Law and a DEA (equivalent to an M-Phil) in Politics. She has a Maîtrise de Droit Publique from the University of Nancy 11 and a DEA d'Etudes Politiques from the Institute d'Etudes Politiques, Paris.

162 Background informatoion from investing.businessweek.com, BNP Paribas website and Corporate Governance reports 163 Background informatoion from investing.businessweek.com, BNP Paribas website and Corporate Governance reports

103

7. Helene Ploix164

Mrs. Helene Ploix serves as the Chairman and Managing Director of Pechel Industries Partenaires and Pechel Industrie, SCR. Mrs. Ploix joined Pechel Industries Partenaires in 1997.She served as the President and a Deputy Managing Director of Caisse Autonome de Refinancement (CDC) from November 1989 to July 1995, where she was in charge of finance and banking. She served as Managing Director of CDC Entreprises Capital Investissement. She served as President and Deputy Managing Director of Caisse des Dépôts et Consignations. She was the Special Monetary Advisor at KPMG Peat Marwick. She served as the Chief Executive Officer at Banque Industrielle et Mobiliere Privee ; Banque Industrielle et Mobilière Privée and Dexia Crédit Local Société Anonyme. She served as a Management Consultant at McKinsey & Company, Inc. from 1968 to 1978 where she began her professional career. Mrs. Ploix served as the President of BIMP where she created the first LBO fund in France. She served as a Shareholder Representative of Epimmune Inc. She is a Director of Store Electronic Systems Société Anonyme, Altice SA, Goëmar S.A. and CAE International SA. She serves as a Member of Advisory Board at Publicis Groupe SA. Mrs. She serves as the Chairperson of Pechel Services SAS and Pechel Industrie, SCR. She served as the Chairman of Banque Industrielle et Mobiliere Privee. She serves as Vice-Chairperson of HRF6 SA. She has been a Director of Boots Company PLC since September 2000. Mrs. Ploix has been a Non-Executive Director of BNP Paribas SA since March 1, 2003. She serves as a Non Executive Director of Sofina Société Anonyme. She serves as a Director of Ferring Holding SA. She served as a Director of Cospirit, and Est Videocommunication S.A.S. She served as an Independent Director of Lafarge S.A. since 1999. She served as a Member of the Supervisory Board at Publicis Groupe SA since June 25, 1998 and Saatchi & Saatchi Group Ltd. since June 1998. She served as a Member of supervisory board at CompleTel Europe N.V. Ploix served as a Member of Strategic Advisory Board at Generis Capital Partners. She served as a Director of CEP from 1978 to 1982. Mrs. Ploix served as the Chairperson of CDC Participations and Banque Industrielle et Mobilière Privée. She served as the Chairperson of BIMP. She served as an Executive Director of the International Monetary Fund and The World Bank Group (1986-1989). She served as a Director of McKinsey & Company, Inc.; and Banque Industrielle et Mobiliere Privee. She served as a Non Executive Director of Alliance Boots GMBH and Alliance Boots Holdings Limited from September 2000 to July 2007. Mrs. Ploix served as Adviser to the Prime Minister on economic and financial affairs. She served as the President and Chairman of A.F.I.C (Association Française des Investisseurs pour la Croissance) and the French Venture Capital Association from 2001 to 2002. She served as a Director of Genesis Emerging Markets Fund since November 2, 2012. She is a Member of Investment Committee at United Nations Joint Staff Pension Fund. 8. Michael Tilmant

165

Mr. Michel J. Tilmant has been Managing Director of CapitalatWork Foyer Group, S.A at Foyer S.A. since June 2011. Mr. Tilmant serves as an Advisor of Verlinvest S.A. He focuses on investments in the financial sector and provides it with operational and strategic advice. He also focuses on consumer and operational efficiencies. He has been an Independent Advisor since September 2009. He has been Chairman of the Executive Board at ING (U.S.) Capital LLC since April 2004 and has been its Member of the Executive Board since 1998. He served as the Chief Executive Officer of ING Groep NV until August 2009. Mr. Tilmant was an Advisor of ING Groep NV from January 26, 2009 to August 1, 2009. Mr. Tilmant served as the Chairman of Executive Board of ING Groep N.V. from June 2004 to January 26, 2009 and the Member of the Executive Board from May 8, 1998 to January 26, 2009. He also served as the Chairman and Member of The Executive Board of ING Verzekeringen N.V. until January 26, 2009. He served as the Chairman and Member of the Exeucitve Board at ING Bank N.V. until January 2009. Mr. Tilmant served as Vice-Chairman of Executive Board of ING Groep NV since May 8, 1998. He served as the Chairman of the Executive Committee of ING Belgium. In 1992 he joined the Executive Committee of Bank Brussels Lambert and served as its Chief Executive Officer since 1997. Since 1991, he served as the Chief Operating Officer of Banque Internationale in Luxembourg. He began his career in finance with Morgan Guaranty Trust Company New York, as the Head of European Investor Services in Paris and London, Head of Operations Services in New York and General Manager of the Brussels branch. He has been an Executive Director of Foyer S.A. since April 2010, where he previously served as its Non Executive Director. He has been a Director of BNP Paribas SA since May 12, 2010 and served as its Non Voting Director from November 4, 2009 to May 11, 2010. He serves as a Director of CapitalatWork Foyer Group,

164 Background informatoion from investing.businessweek.com, BNP Paribas website and Corporate Governance reports 165 Background informatoion from investing.businessweek.com, BNP Paribas website and Corporate Governance reports

104

S.A. He serves as a Non-Executive Chairman of Guardian Financial Services Limited. He serves as a Director of Sofina Société Anonyme. He serves as a Director of Institute Of International Finance, Inc. He serves as a Member of the Supervisory Board of University of Louvain. 9. Emiel van Broekhoven

166

Prof. Van Broekhoven has been a Director of BNP Paribas SA since May 12, 2010 and served as its Non Voting Director from November 4, 2009 to May 11, 2010. Prof. Van Broekhovenserved in a number of Belgian ministerial cabinets and is specialized in investment and finance for private persons. Prof. Van Broekhoven serves as the President of the Flemish Association of Investors and Investment Clubs. He serves as a Member of the Lippens Commission on Corporate Governance and of the Conseil Supérieur des Finances. Prof. Van Broekhoven is an economics professor at the University of Antwerp. He previously taught at the UCL and KUL in Leuven, the University of Amsterdam, and Northwestern University. Prof. Van Broekhoven holds a degree in Business and Finance from the University of Antwerp and a Doctorate (D.Phil.) in Economics from Oxford University. He studied at the Universities of Antwerp, Oxford, Harvard, and Chicago. 10. Daniela Weber-Rey

167

Ms. Daniela Weber-Rey has served as an Independent Member of the Board of Directors of BNP Paribas SA since May 21, 2008 and is also a Member of the Bank's Governance and Nominating Committee. She works as Partner at Clifford Chance, Frankfurt, where she is in charge of the German sector of the Group, Financial Institutions as well as the Franco-German team. Ms. Weber-Rey also serves as a Member of the German Commission of Corporate Governance, a Member of the Stakeholder Group of the European Insurance and Occupational Pensions Authority (EIOPA), a Member of the Partnership Council of Clifford Chance, Board Member of the European Corporate Governance Institute (ECGI), and Advisory Board Member of the International Institute for Insurance Regulation (ICIR). 11. Fields Wicker-Miurin

168

Ms. Wicker-Miurin was Senior Partner of A.T. Kearney, Inc. Ms. Wicker-Miurin holds both executive and non-executive positions in business, European Union financial services policy, U.K. business policy, education, and the arts. Ms. Wicker-Miurin is an International Business Executive with more than 20 years experience in the global financial services industry. She is one of ten members of the Panel of Experts selected to advise the European Union Parliament on the harmonization of financial services sector reform across the European Union. Ms. Wicker-Miurin was the Chief Operating Officer and Partner of Vesta Group Limited. She served as Chief Financial Officer of Vesta Capital Partners. She began her career in banking, before joining Strategic Planning Associates (Mercer Management Consulting) as a senior partner where she was the main advisor to Lloyd's of London. From 1994 to 1997, she was the Chief Financial Officer and Director of Strategy of the London Stock Exchange Group Plc. Ms. Wicker-Miurin was a Managing Director of Vesta Capital Advisors. She is a Co-Founder, Partner, and Executive Director of Leaders Quest. She serves as Director of FPDSavills. She has been Director of SCOR SE since April 21, 2013. Ms. Wicker-Miurin has been Non-Executive Director at CDC Group plc since November 2004. She serves as a Non-Executive Director of Ballapur Graphic Paper. She has been a Non-Executive Director of BNP Paribas SA since May 11, 2011. Ms. Wicker-Miurin served as Non-Executive Director of Savills PLC from June 27, 2002 to May 2010. She served as Director of Financial Industry Regulatory Authority, Inc. She served as Non-Executive Director of D. Carnegie & Co AB from March 13, 2003 to April 2008 and previously served on the Boards of The Royal London Mutual Insurance Society Limited since January 2003. Ms. Wicker-Miurin was a Non-Executive Director of UBM plc (United Business Media PLC) from 1998 to May 6, 2004. She served on the DTI’s Board of Directors for s ix years advising on all government subsidies to business. She was a member of the Nasdaq Technology Advisory Council and advised the European parliament on financial markets harmonisation. Ms. Wicker-Miurin is on the Executive and Strategy Boards of the Department of Trade and Industry. She is a Governor of King’s College, London. Ms. Wicker-Miurin was awarded an OBE - Officer of the British Empire in 2007 for services to international business and was made a Fellow of King's College London in 2010.

166 Background informatoion from investing.businessweek.com. BNP Paribas website and Corporate Governance reports did not give extensive background information about this director. 167 Background informatoion from markets.ft.com. BNP Paribas website and Corporate Governance reports did not give extensive background information about this director. 168 Background informatoion from investing.businessweek.com, BNP Paribas website and Corporate Governance reports

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Exhibit I: Barclays Plc

Name Age Independent Director Since Other Board Commitments Current and Relevant Experience

1. Sir David Walker Yes (Chairman)

September 2012 1. Group of 30 (member and trustee) 2. Cicely Saunders Foundation (trustee)

Yes

2. Anthony Jenkins No N/A -

3. David Booth Yes May 2007 1. East Ferry Investors (President) Yes

4. Tim Breedon CBE Yes November 2012 1. Ministry of Justice (non-executive director) Yes

5. Chris Lucas No N/A -

6. Fulvio Conti

Yes April 2006 1. Enel SpA (CEO and General Manager) 2. ENDESA SA (Director) 3. AON PLC (Director) 4. Italian Institute of Technology (Director) 5. Eurelectric (President) 6. RCS Media Group S.p.A. (Independent Director) 7. Confindustria (Vice President)

No

7. Simon Fraser

Yes March 2009 1. Fidelity European Values PLC (Director) 2. Fidelity Japanese Values PLC (Director) 3. Foreign and Clonial Investment Trust PLC (Chairman) 4. Merchants Trust PLC (Chairman) 5. Ashmore Group Plc (non-executive director)

Yes

8. Sir Michael Rake

Yes January 2008 1. Easyjet PLC (Chairman 2010-2013) 2. BT Group (Chairman)* 3. McGraw Hill Financial (board member)* 4. Majid Al Futtain Holding LLC*

Yes

9. DIane de Saint Victor Yes March 2013 1. ABB Limited (General Counsel, Company Secretary and member)

No

10. Dambisa Moyo Yes May 2010 1. SABMiller PLC (non-executive director)

2. Barrick Gold Corporation (non-executive director) Yes

11. Sir John Sunderland

Yes June 2005 1. Merlin Entertainments Limited (Chairman) 2. CVC Capital Partners (adviser) 3. BUPA (association member) 4. Reading University Council (Govenor) 5. Aston University (Chancellor) 6. AFC Energy plc (non-executive director)

No

12. Reuben Jeffery III Yes July 2009 1. International Advisory Council of the China Securities Regulation

Commission (member) Yes

106

* these commitments were not mentioned on company website or in the related reports

* Sir Andrew Likierman will retire from the board at the 2013 AGM, having completed nine year’s service on the Board this year.

Independent Director Experience Profiles 1, Sir David Walker

Sir David joined the Board as a non-executive Director on 1 September 2012, and was appointed as Chairman on 1 November 2012. He began his career in 1961 with Her Majesty’s Treasury, where, with a period on secondment to the International Monetary Fund in Washington (1969-1973), he served until 1977. From 1977-1993, Sir David held several key positions at the Bank of England where, in 1981, he became one of four Executive Directors of the Bank. From 1988-92 he was Chairman of the Securities & Investment Board and, ex officio, a nominated member of the Council of Lloyd’s over the same period. He was a non-executive member of the Court of the Bank of England from 1988-1993. Sir David was a non-executive board member of the former CEGB and subsequently of National Power plc between 1984 and 1994. He was formerly Chairman of Reuters Venture Capital, Vice-Chairman of the Legal and General Group and was Chairman of the London Investment Bankers’ Association for four years until June 2004. Sir David joined Morgan Stanley in 1994, where he was Chairman and CEO, Morgan Stanley International, and subsequently Chairman. At the end of 2005, he retired as Chairman but remained a Senior Advisor until the end of August 2012. Since 2007 Sir David has completed two reports and made recommendations in respect of the private equity industry and corporate governance at financial institutions. He also co-led the independent review of the report that the FSA produced into the failure of Royal Bank of Scotland and was a member of the four-person Committee chaired by Lord Woolf (former Lord Chief Justice) into ethical business conduct in BAE Systems plc, which reported in May 2008.

2. David Booth

David joined the Board in May 2007 as a non-executive Director. David has extensive banking industry knowledge and experience, having previously been employed by Morgan Stanley from 1982 to 1992, and again from 1995 to 1997. David held various key positions within the company, including Head of Government Bond Trading, Head of Mortgage Trading, Sales and Finance and Head of Global Operations and Technology. Having retired from the Management Committee of Morgan Stanley in 1997, David now manages his own venture capital investments. 3. Tim Breedon CBE

Tim was appointed to the Board as a non-executive Director with effect from 1 November 2012. He was Group Chief Executive of Legal & General Group plc (L&G), until June 2012. Tim joined L&G in 1987, holding a number of roles before joining the board as Group Director (Investments) in 2002 and becoming Group Chief Executive in 2006. He remained an adviser to L&G, primarily with responsibilities in connection with Solvency II, until 31 December 2012. 4. Fulvio Conti

Fulvio joined the Board in April 2006 as a non-executive Director. Fulvio has significant financial and business experience from a career spanning over 35 years, and is currently CEO and General Manager of Enel SpA, the Italian energy company, where he was previously Chief Financial Officer from 1999 to 2005. During his career, Fulvio held the role of General Manager and CFO of Telecom Italia SpA from 1996-1998 and CFO for various private and government owned entities in Italy, was in charge of finance

2. Advisory Board of Towerbrook Capital Partners LP (member) 3. Board of Directors of the Financial Services Volunteer Corps (member).

13. Sir Andrew Likierman** Yes September 2004 1. London Business School (Dean)

2. National Audit Office (chairman) 3. Institute of Government (trustee)

Yes

107

at Montedison-Compart, and was CFO of Montecatini. He has also held positions in finance and operations in various affiliates of Mobil Oil Corporation in Italy and Europe, where he spent his initial career spanning over 20 years. 5. Simon Fraser

Simon joined the Board in March 2009 as a non-executive Director. He has extensive experience of the fund management industry, having started his career at Fidelity International where he spent 27 years. During this time, Simon was President of the Investment Solutions Group and President of the Retirement Institute. He held a number of other positions during his time at Fidelity International, including President, European & UK Institutional Business, Global Chief Investment Officer, Chief Investment Officer for Asia Pacific and Chief Investment Officer of the European Investment Group. 6. Sir Michael Rake

Sir Michael joined the Board in January 2008 as a non-executive Director, and was appointed Senior Independent Director in October 2011 and Deputy Chairman in July 2012. Sir Michael has significant non-executive experience, both as a chairman and board member of listed companies. With over 30 years spent with KPMG, Sir Michael has substantial financial and commercial experience gained in Continental Europe and the Middle East. He was Senior Partner of the UK firm from 1998-2002 and Chairman of KPMG International from 2002-2007. 7. DIane de Saint Victor

Diane was appointed as a non-executive Director with effect from 1 March 2013. She is currently General Counsel and Company Secretary and a member of the Group Executive Committee of ABB Limited (ABB), the publicly listed international power and automation technologies company based in Switzerland, where her responsibilities include Head of Legal and Integrity Group. She was formerly Senior Vice President and General Counsel of EADS, the European aerospace and defence company. 8. Dambisa Moyo

Dambisa joined the Board in May 2010 as a non-executive Director. She is an international economist and commentator on the global economy, with a background in financial services. Dambisa worked for the World Bank from 1993 to 1995. After completing a PhD in Economics, she worked for Goldman Sachs for eight years until November 2008 in the debt capital markets, hedge funds coverage and global macroeconomics teams. 9. Sir John Sunderland

Sir John joined the Board in June 2005 as a non-executive Director. He has extensive business and Board level experience, having spent forty years with Cadbury Schweppes PLC, where he became Chief Executive in 1996 and subsequently Chairman in 2003. Sir John has significant experience as a Director of UK listed companies, and has also held a number of similar positions in trade and professional bodies, including the Confederation of British Industry and the Chartered Management Institute. 10. Reuben Jeffery III

Reuben joined the Board in July 2009 as a non-executive Director. Reuben has been CEO of Rockefeller & Co., Inc. since 2010 and has a broad range of banking and government experience. He previously served in the US government as Under Secretary of State for Economic, Energy and Agricultural Affairs (2007-2009), as Chairman of the Commodity Futures Trading Commission (2005-2007); and as a Special assistant to the President on the staff of the National Security Council (2004-2005). Previous to his government service, Reuben spent eighteen years at Goldman, Sachs & Co. (1983-2001) where he was managing partner of Goldman Sachs in Paris (1997-2001) and led the firm’s European Financial Institutions Group in London (1992-1997). Prior to joining Goldman Sachs, Reuben was a corporate attorney with Davis Polk & Wardwell.

108

11. Sir Andrew Likierman

Sir Andrew joined the Board in September 2004 as a non-executive Director. He has wide ranging experience within both public and private sectors and academia, and is currently Dean of the London Business School. He served as Professor of Management Practice in Accounting at the London Business School since 2004 and previously served from 1974 to 1976 and from 1979 to 1993.

169

He also served as Chairman of the National Audit Office. Sir Andrew has held a number of high-profile roles, including 10 years spent as Managing Director, Financial Management, Reporting and Audit and Head of the Government Accountancy Service at HM Treasury. Sir Andrew also has a wealth of non-executive experience that includes serving as a non-executive Director of the Bank of England (2004-2008). In his professional capacity, Andrew has held the presidency of the Chartered Institute of Management Accountants, served as a member of the Financial Reporting Council for several years and was a member of the “Cadbury Committee” on UK Corporate Governance.

169 Information from investing.businessweek.com

109

Exhibit J: Royal Bank of Scotland

Name Age Independent Director Since Other Board Commitments Experience

1. Sir Philip Hampton 59 No 2009 N/A -

2. Stephen Hester 53 No 2008 N/A -

3. Bruce van Saun 55 No 2009 N/A -

4. Sir Sandy Cromble

64 Yes 2009 1. Creative Scotland (chairman) 2. Royal Conservatoire of Scotland (Member and Vice Chairman of the board of Governors) 3. Cockburn Association (President)

Yes

5. Alison Davis

51 Yes 2011 1. Unisys Corporation (non-executive director) 2. Diamond Foods Inc (non-executive director, chair of compensation committee and member of audit committee) 3. Xoom Corporation (non-executive director, chair of audit committee and member of compliance committee) 4. Women’s Initiative for Self Employment (Chair of the Governing Board)

Yes

6. Tony Di Iorio 69 Yes 2011 None Yes

7. Penny Hughes CBE

53 Yes 2010 1. WM Morrison Supermarkets plc (Non-executive director, chair of corporate compliance and responsibility committee, and member of audit, nomination and remuneration committees) 2. British Museum (trustee)

No

8. Aileen Taylor 40 No 2010 N/A -

9. Brendan Nelson

63 Yes 2010 1. BP plc (non-executive director and chairman of the audit committee) 2. Financial Skills Partnership (board member) 3. Financial Reporting Review Panel (member) 4. Insitiute of Chartered Accountants of Scotland (Deputy President)

Yes

10. Baroness Noakes DBE

63 Yes 2011 1. Severn Trent Plc (non-executive director and chairman of the audit committee) 2. Carpetright Plc (Deputy chairman and senior independent director and chairman of the nominations committee) 3.Thomas Reuters Founders Share Company ltd. (Trustee)

Yes

11. Arthur Ryan

70 Yes 2008 1. Regeneron Pharmaceuticals Inc (non-executive director) 2.Newyork-presbyterian Hospital (life trustee)* 3. National Math & Science Initiative, Inc. (board member)* 4. New Jersey Performing Arts Center (Chair Emeritus)*

Yes

12. Phillip Scott 59 Yes 2009 1. Diageo plc (non-executive director&chairman of the audit committee) Yes

110

* these commitments were not mentioned on company website or in the related reports

Independent Director Experience Profiles 1. Sir Sandy Crombie

Previously group chief executive of Standard Life plc He retired from Standard Life on 31st December 2009 after 43 years service, having been Group Chief Executive since January 2004 and Chief Executive of Standard Life Investments Limited from its launch in 1998 He was also previously a director of the Association of British Insurers, a member of the former Chancellor of the Exchequer’s High Level Group on Financial Services and Chairman of the Edinburgh World City of Literature Trust November 2006-20 June 2011). . In 2007 he was the Prince of Wales’ Ambassador for Corporate Social Responsibility in Scotland. 2. Alison Davis

Former director of City National Bank, First Data Corporation and chair of the board of LECG Corporation. She previously worked at McKinsey & Company (1984-1993), AT Kearney (1993-2000), as chief financial officer at Barclays Global Investors (now BlackRock) (2000-2003) and managing partner of Belvedere Capital (2004-2010), a private equity firm focused on buy-outs in the financial services sector. 3. Tony di Iorio

Has worked for a variety of financial institutions starting with Peat Marwick (now KPMG) and then Goldman Sachs, ultimately as controller of the global firm. He was chief financial officer of the investment bank of NationsBank (now Bank of America) before joining Paine Webber and then Deutsche Bank where he became chief financial officer in 2006 (till 2008). After retiring in 2008 he served as senior adviser to Ernst & Young working with the firm’s financial services partners in the UK, Europe, the Middle East and Africa. 4. Penny Hughes

Previously a director and chairman of the Remuneration Committee of Skandinaviska Enskilda Banken AB and a non-executive director of Home Retail Group plc and chairman of its Remuneration Committee. She spent the majority of her executive career at Coca-Cola where she held a number of leadership positions, latterly as President, Coca-Cola Great Britain and Ireland. Former non-executive directorships include Vodafone Group plc, Cable & Wireless Worldwide plc, Reuters Group PLC and The Gap Inc. 5. Brendan Nelson

Former global chairman, financial services for KPMG. Previously held senior leadership roles within KPMG including as a member of the KPMG UK board from 1999 to 2006 and as vice chairman from 2006. Chairman of the Audit Committee of the Institute of Chartered Accountants of Scotland from 2005 to 2008. 6. Baroness Noakes

An experienced director on UK listed company boards with extensive and varied political and public sector experience. A qualified chartered accountant, she previously headed KPMG’s European and International Government practices (1970-2000) and has been President of the Institute of Chartered Accountants in England and Wales. She was appointed to the House of Lords in 2000 and has served on the Conservative front bench in various roles including as shadow treasury minister between 2003 and May 2010. Previously held nonexecutive roles on the Court of the Bank of England (1994-2001), Hanson, ICI, John Laing and SThree. 7. Arthur Ryan

Former chairman, chief executive officer and president of Prudential Financial Inc (till 2008). Previously he held senior positions with Chase Manhattan Bank N.A. (1990-1994) and was a founding member of the Financial Services Forum. He is a non-executive director of RBS Citizens Financial Group, Inc. 8. Phillip Scott

Wide-ranging experience of financial services and risk management, including previous responsibility for Aviva’s continental European and International life and long-term savings businesses. He held a number of senior executive positions during his career at Aviva including his role as group finance director until January 2010. He is the former President of the Institute and Faculty of Actuaries and is a Fellow of the Association of Certified Public Accountants.