JPMorgan Responds to Critics, Shakes Up Board

NEW YORK ( TheStreet) -- JPMorgan Chase ( JPM) announced Monday that it had elected two new directors, Linda Bamman and Michael Neal, to its board and taken more steps towards ensuring the board's independence in the wake of criticism of its corporate governance practices earlier this year.

Linda Bammann, an old JPMorgan hand, will join the board in September. Bammann served as chief of risk management at Bank One, prior to its acquisition by JPMorgan, and as deputy head of risk management at JPMorgan before her retirement in 2005. She also joined the board of Freddie Mac after it entered conservatorship and served as Chair of the mortgage giant's risk committee till July this year.

Bammann will join JPMorgan's Risk Policy Committee.

Michael Neal is currently vice chairman of GE ( GE), having servied as chairman and CEO of GE Capital until June, will join JPMorgan's board in January 2014, after retiring from GE.

The bank emphasized the risk management and financial services experience of the appointees in its press release. "Linda and Mike are proven leaders and will bring outstanding risk, finance and management experience to our Board and to our firm," JPMorgan CEO James Dimon said.

Earlier this year, the company announced the David Cote and Ellen Futter from its risk committee, after they received tepid support from shareholders at the JPMorgan's annual meeting in May.

Shareholder activists voted against them, arguing that they had insufficient risk management experience.

The bank also established a new Lead Independent Director role, in response to criticism that the board lacked an independent chairman. Dimon was re-elected as chairman and CEO of JPMorgan Chase this year, despite activist calls to separate the two roles.

Lee Raymond, the board's "Presiding Director" will serve as Lead Independent Director. In his new capacity, Raymond will have additional powers.

For instance, he will preside over meetings where CEO Dimon is conflicted, not just the ones where he is absent.

He will also guide annual performance evaluation of the chairman and CEO roles, the board's consideration of the CEO's compensation and CEO succession plans.

The bank also said it would not rotate the Lead Independent Director's role on an annual basis and that it would make its directors available for consultation with major shareholders.

-- Written by Shanthi Bharatwaj New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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